It seems like a lifetime ago when I initially walked through what would turn out to be one of our first Detroit rental properties.
Reading that old post solidifies how far I’ve come and how much I’ve learned since then. It also takes me back.
I can remember how nervous I was about purchasing that home. In hindsight it was such a great deal I now laugh at my 2019 self.
This was actually the first house we put an offer on but was the second to close behind the First Buy Bungalow. The owners resided in France and the sale was held up for months due to paperwork that had to run through the consulate.
In fact it was nearly three months until we finally closed. I wrote about doing our final walk through and realizing the home had 5 bedrooms and not 4.
Our total cash to close the house was $43,685.04 on July 11, 2019. Here’s a snippet of the actual closing docs sent to me a few days before:
Delayed Financing
Since we weren’t planning to do any renovation work on this property we decided to do delayed financing.
This would allow us to pull a good chunk of our capital out without having to wait the six month seasoning period to refinance.
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The appraisal was done and came through on August 28th, 2019 at $48,000.
While this was higher than our purchase price, I was disappointed. My naive 2019 self though we were going to see a $55k appraisal.
All said and done, on Sept 26th we had a loan of $36,000 at a 4.99% interest rate and received a check for $34,292.20.
That left us just $9,392.84 in the deal. Not bad!
Rental Performance Over Time
The Great Greydale has been nothing but a steady performer.
In fact, in the last couple years we’ve pulled out more than $20,000 in net cash flow.
In 2022 we booked net cash flow of $7,364 which comes out to nearly $614/mo.
That’s a more than 78% ROI from our initial $9,393 investment… in one year!
Here’s a look at the performance over the years:
The Future for this Rental
I expect 2023 to be our best year yet for the Great Greydale.
Why?
Simply put, we raised the rent from $900 to $1,200 but it didn’t go into effect until July 2022. So we’ll be capturing a full year of $1,200/mo rent.
We don’t plan to raise the rent again this year because our tenant is fantastic and I’d love for her to continue living in the home.
Deferred CapEx
At some point we are going to need to put a new roof on this house.
It’s inevitable, and I knew that going into the purchase.
I’m actually shocked we haven’t had to do it already. But I’m hoping to delay it as long as possible since it will be a large expense.
That said, with the roof done we should have decades of strong performance ahead.
I will continue monitoring the performance of this property and update this post in the future. I hope you enjoyed another rental performance write up.