I took a detour on the way to the office this morning. It was reported, yesterday, that two vacant homes had fires on the same block as the duplex we own (“other rental unit” on Net Worth Tracker). Thankfully, those houses were across the street, so the duplex seems fine. We are in the midst of selling the duplex on a land contract for $29,675 over 5 years. We are just under a year into it. Basically, the duplex is still in the name of our real estate LLC, but the buyers are paying off the purchase price, plus interest. When they finish paying, we give them the deed. They also pay the real estate taxes, insurance, and for any maintenance issues or repairs. If they stop paying, I can take back the property, either through an eviction or a foreclosure, depending on how much they have paid.
The duplex is our first investment property that we bought for $13,900 in cash in the summer of 2010. It was a REO property listed on HomePath. Someone had completed most of a rehab, so it was almost ready for tenants. I used public records to look at all of the houses around it; this property was sandwiched between two homes that were part of a $200,000 purchase of about 10 properties by one investor (which I assumed meant he would do his best to take care of his investment). The block looked like it had hit rock bottom, and could only go up. I had always been a clean and respectful tenant, and expected everyone acted that way. I was very wrong.
I’d have to look back at the tax returns to be sure, but I think we always at least broke even on this property. There’s no way we would have made any profit if we had a mortgage payment. I’m not sure how many stoves and fridges we’ve gone through due to defects and stealing. The house on one side has already been torn down and the one on the other side is on the chopping block as well.
Ultimately, I’m glad to be getting rid of this property. The lessons learned and confidence gained has been invaluable. But it isn’t fun to think your house might have burned down.