Category Archives: Investment Homes

Long time coming

It’s taken me a bit of time in planning – But I’d like everyone’s ideas on the two plans attached.  I have designed these to be built on one of the lots I have purchased.  The lot size is just barely larger than the footprint of this house, so expansion is not an option.

The ONLY difference in these two houses is the second floor.  I’d like opinions on which you like best.

Please note that this house was designed as a rental unit using minimal kitchen and bath cabinets.  So, be kind when you notice that there aren’t ample cabinets… there is a HUGE pantry (for those of you who rent and hate the fact that there are never enough cabinets).

My main question is, would you prefer the master bedroom on the front of the house, or on the rear.  What about the laundry location? Which do you prefer? Linen closet location?1500 - C15-003-01 1500 - C15-003-02

Thanks in advance, Janne

Skin in the Game

Well, I’ve finally got some skin in the game.

I began attending Memphis Investors Group  (MIG) meetings in January of 2012.   (MIG is a group of property investors put together to help educate people on better ways to own, manage and make money at investment properties, commercial buildings, and rental units).  I originally began going because my father is aging and I wanted to help him manage his property portfolio, (big word for one office building and a rent house), but I wanted to make sure that leases and policies were up to date and legal, etc.  He had not done any type of updates to his leases in many years and was losing interest in the day-to-day operations of the office building and always had a hard time getting his house tenant to pay rent on time.  I needed to help him, paybacks for all those favors he did for me while I was growing up.  Now I keep his books as far as his properties are concerned, which really isn’t hard, I receive the rent checks, send invoices, go to the bank each month, nothing that is too time consuming, but I feel better knowing that he is getting his money.  I don’t ask for money, I’m not a real estate agent and by law I can’t be a “Property Manager” so, I just take care of my dad by helping him.

All that said, I became very interested in owning my own properties because of attending the MIG meetings.  The meetings are quite interesting and there seem to be easy ways to get into the game.  I have learned so much that I now want to get myself into the game.

A question that is commonly asked at MIG is “How many offers did you make last week (month, year, etc)?”  If not, why now?  For me this question has been a no-brainer as of late.  I was not fully educated and needed to do a lot more study and prep work before I jumped in with both feet and all my money.  Don’t get me wrong, I’ve WANTED to just jump in a play with the big boys, but I knew that wasn’t possible.  I’ve never had a lot of money (I was a single parent of 3 for a number of years) and what money I have managed to accumulate, which still isn’t much, was TOO hard to get, so letting it go to some get-rich-quick scheme was not on my list of  “to-dos”.  But I went religiously to the meetings and have listened at every opportunity.  I have gone to training seminars, I have read books, I have listened to national speakers, I have even gone to weekly lunch meetings, which are 100% informal meetings, but given a few questions, those who are experienced teach you one on one.

I have been looking for the perfect situation.  The perfect place to buy to begin my property investment career.  It has not materialized …   yet.  I was looking for a duplex in a particular area of town.  My main reason for a duplex in that area of town was because of one of my kids who wants to live in that area and keeps finding herself with no place to live.  I thought I could buy a duplex and rent one side to my daughter and the other to some random stranger.  The daughter could do all the rent collecting for that unit, she could add her rent and pay the notes, I could teach her some homeowner responsibilities and still be “in the game” myself.  Well, one can only look for so long before one goes crazy and quite frankly, when has buying a place for your own kid ever worked out? EVERYONE I talk to says it’s a horrible idea.  You get stuck with all the bills, HOA fees, lawn mowing, etc., because the kid doesn’t have any skin in the game. SO, suddenly it hit me:  I design homes for a living.  I’ve been concentrating recently on investment type homes (inexpensive to build with very few kitchen cabinets or bathroom cabinets, no frills, just walls, rooms and toilets.  The investor I have been designing for wants 4 bedrooms, 2 bathrooms and 2-car garages all in 13-1400 sq. ft. heated.  No porches to speak of, just a small covered stoop so that they can claim to have a porch, but in all practicality, there really isn’t much porch).  This said, why not look for building lots which have been foreclosed, or are distressed for whatever reason.

So, I changed my way of looking for properties, I began to look for LOTS rather than used houses.  I found some lots.  I actually found some quite affordable subdivision lots, in a great area of town, ready to be built on, and not in a flood zone.  There are some other strings attached at the moment, but I won’t get into that in this epistle of a blog post, but I will say this, others have run away from these lots because the LOOK scary.  They are cove lots, tiny cove lots.  They have easements running through them that would make a grown builder cry…. but mainly because they’d need to have a custom home designed for the lot.  My advantage, I can do that for myself!  I can design a house that will fit on each lot if I have to.  So, after talking to many advisers (my father, not one, but two attorneys, several builders, a title company or two), I have decided to put some skin in the game.

I laid some money on the table and made an offer.  I NOW have skin in the game.  I don’t know if it will go through or not, but I am both hopeful it will and terrified that it will all at the same time.   Needless to say, I’m not ALL THE WAY in the game, but I did leave a few fingernail indentions in the chair and a few bucks on the table.  NOW I can say I have some skin in the game, but only time will tell if I win the bid, or if I’m let off the hook.  I think I will be sad if it doesn’t go through, but if it does, I will be terrified for the next step…. building a house.  Wow!  We shall see……….

Investment Project – Alley Loaded Garage

1300 - C13-002-02

Just so my readers (well, eventual readers) will know what we do, I thought I would start with a few pictures of projects.  Our home plans start at about 400 sq. ft., although with the new Tiny House Movement, well, to tell you what I think about that, I’m obsessed!  But haven’t published any of those … yet.

Here is a recent design I did.  Before you tell me how terrible the kitchen and bathrooms are, this was designed to be built BY Property Investors with the specific goal of renting this house out right off the bat.  Therefore, I was given a specific list of criteria.

1. MINIMAL Bathroom Cabinetry – they tried to talk me into a 24″ – 30″ vanity, but I refused to use anything less than 36″.  Granted a 36″ vanity really isn’t much if you need a little space, but it has that precious extra 6″ to hold at least a curling iron… for the girls.

2. MINIMAL Kitchen Cabinetry – the investors also did not want many kitchen cabinets because they often get destroyed by renters. The fewer cabinets, the better as far as replacements.  Because I have a heart for renters (I was once a renter), I TRIED to give you more cabinets, but was shot down, so, I made a big pantry that will hopefully allow you to forgive me for the lack of cabinets.

3. Four Bedrooms, Two Bathrooms, 1350-1450 sq. ft.

4. Double Garage

There were a few other criteria, like the overall width and depth of the house and of course there were some restrictions regarding the lot size, so the physical footprint trumped some of the above criteria.

If you were buying this property, particularly in this area of the country, this would definitely not be a great choice, yea there are lots of bedrooms and 2 full baths AND a garage, but the cabinets aren’t ideal especially for a homeowner.  However, if this size house is what you are looking for, maybe the “normal version” of this plan would be more appealing.  Notice the expanded bathroom on the first floor, the additional storage room under the stairs, the added cabinets in the kitchen as well, there are doors which close off the washer/dryer (in the plan at the beginning of this post, those are open to the world… not my choice, but to save money for the investors).  Yes, this is a rear loaded garage for use with an alley style subdivision, but we also flipped it over for a front loaded garage where the Master bedroom is on the back of the house.  Works great either way.

In either version of this plan, you could add a bonus room or even a 5th bedroom with minor modifications and that room could be added above the garage.

By the way: I’m told that this house was rented out PRIOR to it being completed for about $1300 per month.  This is pretty good in our market. Nice 4-bedroom/2 bath homes are apparently hard to come by around here… well, located in good neighborhoods.

Your thoughts and comments appreciated. If you are a property investor and build new homes for rent, what criteria would you ask for?

1300 - C13-002-01