How to Buy a House for 100 Dollars
My name is Kaynea “Kay” Bingham, a licensed real estate agent and full-time investor. I have been a CFRI member since 2017.
I currently flip houses in Central Florida and have a few rental homes in Orange County.
Kaynea, how did you find a house to buy for $100?
The house I found was brought to me by a real estate colleague who knew that I was an investor. She wasn’t sure that I could help her client who had inherited possession of her deceased father’s real estate portfolio. She would have to come out of pocket at closing to traditionally sell the property and pay off the mortgage. The mortgage balance was $119,000 with an interest rate of 5.125%. The original loan amount was $128,524 back in 2013. Although the seller could have rented out the property, she wasn’t interested in being a landlord. There were also a lot of minor repairs and some updating. The concrete block home is in Orlando, FL.
Are you getting a quality house for $100?
It’s a three bedroom, two bath with a one car garage located on a quiet cul-de-sac. The home was built in 1977 and includes 998 sq. Ft. and has an enclosed sunroom on the back. It had been occupied by a tenant who was paying $800 a month even though the mortgage on
the property was $900 a month, including taxes and insurance. I was able to acquire the home in March of 2018 by legally taking over the payments on the mortgage “subject to” the existing mortgage. I got help from CFRI Business Member and attorney Joseph Seagle with PCS Title to do everything correctly. The trustee on the property was able to work amicably with the tenant so that they would move out of the home. They had a month-to-month lease. The tenant left peacefully.
What did you do to add value to the home?
After I acquired the property, I cleaned up the outside, refreshed the kitchen by repairing kitchen cabinets, installing granite countertops and new appliances, remodeled the entire guest bathroom, restored the master bath, and painted the whole inside of the house and replaced the outlets and fixtures. It was important to me to ensure that we were renting out a clean, safe, updated home that could provide maximum rental income. The rehab took a little less than a month, including finding a new tenant. We decided to ask for rent at market value for the area at $1,300. This price point was a $400 increase from what the previous renter was paying. We were overwhelmed with many people wanting to rent the home. We were able to rent the house in 8 days.
Here are how the numbers break down for the property:
Editor’s Note: You can read the full newsletter here to learn more about how to buy a house for 100 dollars.