You can read my original post about the theft here…

Apparently this guy stole A LOT of A/C units. I guess there is a big market for selling stolen A/C units on the black market. It seems like there would be much better things to steal for the amount of work you have to go through, but I am not a thief so I am not qualified to speak on such things.

After the original unit was stolen we began securing the A/C units to the piers below the home using a thick cable that cannot be cut with bolt cutters. This precaution is very inexpensive so even though this guy is off the street, we are going to continue using it.

These are three 1,800 square foot starter homes, that my goal will be to rent and possibly sell. I figured I can use the cash flow and if I find the right tenant who wants to own, I can sell and build a replacement. I am still working on the Duplex concept, apparently not a lot of people have done this. Finding the right lot that is zoned for multi-family is difficult as well.

These homes should be done in a few months.

I was able to obtain a tenant on a Lease with Option to buy. They made a non refundable deposit of $3,000 that I will apply as down payment if they are able to purchase the home within 12 months. If they are not able to purchase, they forfeit the deposit, I figure this money will cover any possible damage that may be done to the home in the event they do not buy it. Any losses over $3,000 and I will file an insurance claim and it will mean they went pretty wild destroying the home! Lets hope that doesn’t happen, they seem like really good people.

I am getting $1,225 per month in rent and my payment is only around $1,000 so I will get to enjoy $200 per month in POSITIVE CASH FLOW for the next 12 months. They lease option also calls for a sales price that is around $20,000 more than I paid for the home. If I can make $22,000 in 12 months on a $5,000 investment I will be very happy!

After getting this unit leased I have decided to proceed with 3 more homes. I will keep you posted. I am also looking into the possibility of doing a MODULAR DUPLEX! If I do I will keep if for years, after looking at the initial numbers it could create significant cash flow for me. My plan would be to apply all of the cash flow to paying off the note and owning the Duplex free and clear one day. In the right area the Duplex can bring in around $1800 per month in rent, so if I one day own it free and clear thats a nice chunk of change. Of course there is not telling how high rents will be by the time I own it free and clear. I can’t help but do the math on owning 10 Duplexes free and clear one day, I could have a nice six figure income just off of my Duplexes one day. This is what Modular Cash Flow is all about!

I am trying to look at the credit to make sure they will be eligible for financing in 12 months. I am shooting for FHA mortgage financing at the end of the 12 months. Most FHA lenders are looking for around a 580 credit score and allow some credit blemishes. I am putting the applicants in contact with a loan officer so have their credit pulled and get an opinion on the ability to finance them in 12 months. The potential buyers have been very willing to work with the lender and feel safer about entering into the lease option knowing a lender has reviewed their credit and feels they have the potential for financing if they pay their bills on time for 12 months.

I am going with a 5 year Fixed Rate mortgage, so it will go adjustable after 5 years. The initial interest rate is 7.5% which isn’t too bad considering I only put $5,000 down and this is an investment property. My payment is around $800.00 per month without taxes an insurance. It appears my taxes are going to remain based on the raw land for the next year, so I am going to save some money their. My insurance is around $90.00 per month, so at a total payment of around $950.00 I am going to have great POSITIVE CASH FLOW if i get tenants at the $1,200 per month I am looking for. Based on the rental market in my area I am pretty sure I can.

I didn’t have to bring any additional money to the modification, I just had to pay for my first year of homeowners insurance. So all in all I have around $6,000 of my cash tied up in this project and the rest of the funds came from the mortgage. I had to modify the loan amount upward to cover the stolen A/C unit, but i had plenty of equity so it wasn’t a problem. The modular home appraised considerably higher than what I paid for it!

The lender was great, the title company was great, I am now in my permanent mortgage with a fixed payment and rate for 5 years. Now its time to find a tenant!

The perimeter enclosure is in, we went with a reinforce vinyl siding that is durable, lets the crawl space remain accessible and easy to maintain. At this point we just went with some basic steps on the front and back of the home, I will probably end up putting in some porches in the future, we’ll see.

As soon as we get the C/O I can modify into my end loan and start looking for tenants!

I hope they catch the guy.

The A/C company did the A/C unit and the power box all at once. They installed a circuit breaker on the side of the home and wired in the whole house and the A/C unit. It only took them 1 day to get all of the electrical and A/C in.

The plumber came and had to run a number of pipes under the home. The drains had to be run from each bathroom and the kitchen out to the septic tank. The water tap was put in by the county and the plumber connected the incoming fresh water to the home. Seeing how easily accessible the pipes are under the house makes me feel good as an investor. If there are ever any plumbing problems down the road it won’t be very difficult to get underneath. Most homes in Florida are built on a slab so correcting plumbing problems can be very very expensive.

The interior drywall work looks good, it only took about a day for the drywall sub to finish up and have the inside looking perfect. We still have to get someone in to seam the carpet where the sides meet but the inside is pretty close to being finished.