This falls into the slightly silly category, but for 2009 I may roll out a bit of a challenge for myself, which is to see if I can buy an investment property with the income generated from this blog.
A few days back I wrote a big honking post on the subject which WordPress somehow managed to eat, but the short version is that I’ve been running at about $500/month in income from flipthyhouse.com and a few other spin-off sites I maintain. That comes from a mix of private ad sales, text link ad sales, Google Adsense revenue, and sales generated through various affiliate programs.
I’ve been involved with affiliate marketing/SEO/SEM for many moons now, and it’s something I wax and wane on from time to time, as far as actively building out sites, getting involved in other projects, actively working at it again, etc. It’s a nice, easy way to make some passive income, but it’s hard to keep the nose to the grindstone, especially with other projects sucking up time and energy.
One of my resolutions for 2009, though, is to get more serious about developing this site, so the silly challenge is designed to help with that. I’m going to start reporting each month the income generated by this site (along with some tips along the way for anyone with a REI-related site looking to make a few extra bucks), and keep a running total of the income generated. If I can hit paydirt with any of the letters I’ve been firing off to owners of abandoned homes, it might be possible to eventually buy one of them using only the proceeds from my assorted REI websites. Which isn’t necessary, really (and kind of silly, as I’m not keeping the income generated in a coffee can buried in the back yard, with funds completely segregated), but I like the symmetry and challenge of trying to make enough money babbling on about real estate investing to actually, you know, invest in real estate.
Twiddling our thumbs a bit with House #3 at the moment as we’re waiting for the inspection for all of the rough plumbing and rough electrical before we can insulate and sheetrock, and we’re waiting on the surveyors to do their thing so we can finalize the addition part of the building permit, and get started on that. It’s a little frustrating when you live in the boondocks and there’s only one surveying company within three counties (and they fully know that and work on their own glacial schedule), but them’s the break sometimes. We’re still slightly ahead of where I thought we’d be at this point, and still looking good to finish up by the end of the month.
The county finally published the list of tax deed sale properties for February and the abandoned house next door was on it, with a minimum bid of $6,770. I’m conflicted as to whether to go after it or not, as it still has multiple liens on it from the city for mowing and securing the property (which I need to investigate at the court house), so the minimum price to pick it up is probably more like $7,500-$8,000.
That’s pushing it, as it’s in worse shape than House #3, and it may simply need to be bulldozed. I need to, umm, be strategically located next to the door tomorrow when the plywood it’s boarded up with, umm, magically somehow becomes unscrewed from the house, allowing me to get a better idea of what the interior looks like. If it can’t be salvaged, with the clean-up I’d be into it for close to $10,000, and the lot is maybe worth $5,000.
That’s obviously not an attractive deal, but getting rid of it would easily tack on $5,000 to the value of House #3, so in the long run it’d be a break-even proposition, and I’d have a lot to possibly build on in the future if I do ever take a stab at new construction.
Another way to play it is to go to the tax deed sale with the funds to buy it, if necessary, but not bid on it as long as no one else does, either. If no one bids on it, it goes back to the county and is put on the struck off list, which means that the county can then take any offer for it that they deem acceptable, even if it’s less than the back taxes owed on it.
Or I could simply let someone else buy it, assuming they plan to renovate or knock it down themselves, as they’ll likely check out the property and see I’m fixing up the house next door. Depending on who buys it, there might even be room to somehow work with them on renovating it or splitting the costs to demo it, as my main motivation is to see it gone, more than anything.
Regardless, though, it’d be at least 6 months before I could do anything with it, as the owners legally have that long to scrounge up the back taxes plus interest and penalty payments and get the deed back, so you really can’t start any renovations or demolish it until 6 months have passed.
Assuming the liens on it aren’t too pricey, I’m leaning on trying to buy it myself, as that way I at least control the destiny of it at some point in the near future, as someone else might buy it but have no immediate plans for it, as it can’t really depreciate in value any further than it already has.
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