The “First Buy Bungalow” has a special place in my heart because it was the very first rental property we purchased in Detroit. We closed on this cute little bungalow on June 4th, 2019. Reading back on that post I was clearly a bit overly optimistic regarding the existing tenant.
Ultimately, we had to go through our first, and so far ONLY, eviction, put ~$15,000 into a cosmetic rehab, and finally re-rent the home. It took us about 8 months to get through all of that, but much of it was because this was all new to us. Insane!
We paid $40,000 cash for the house and did delayed financing right after the purchase, but after the eviction and initial rehab we had $24,000 locked up in the home.
The good news is we rented the house for $950/mo which was up from the $700/mo it was rented at when we bought it.
You can see this progress on the chart below where I track our total cash invested and total debt:
By late 2020 the house was chugging along nicely for us. We were going through a couple refinances on two rehabs and I figured why not try and refinance the First Buy Bungalow as well. Prices had gone up in the area and our cosmetic updates should help push value.
But the appraisal came in at only $54,000 and while I tried disputing it, they wouldn’t budge. That’s where you see our debt carry on the home increase in November 2020 in the chart above.
That said, the house has been extremely good to us. We had our $950/mo tenant leave in June 2021 and then we were able to bump the rent to $1,200/mo without doing any additional work to the home.
We’re now in the process of transferring the house to a property management company as of late 2022 and that’s why you’re seeing the cash invested line tick a bit higher for now. We’ve also had two thefts with this property over the years, losing the furnace and water heater both times. The first instance occurred in January 2020 as we were readying the house post-eviction. The cost was part of the $15,000 rehab we put into the home. The last theft was just recently and we’ve yet to spend the cash to put the new ones in yet but it’s coming.
But I’m confident we’ll have the house stabilized soon and starting to work for us again.