Should you start your own ‘Monopoly Project’? Should you start acquiring rental properties? In this series we examine ways to start your own “Monopoly Project”.

In our first post of this series, we explained by the first thing you should do is to get into shape – Financial Shape. We explained how and why we started in ‘Start Your Own Monopoly Project – Step 2: Our Way’. Then we explained a method you should never use: Step 3: OPM – Other People’s Money. In “Start Your Own Monopoly Project – Step 4: House Hacking – Joey Sleeps in the Sink” we took a side street and looked at “House Hacking”. Then we looked at ‘Step 5: Get A Partner’ and we did get a partner! In “Start Your Own Monopoly Project – Step 6: Get Back to Reality” we talked about the benefits of owner occupied financing: low or no down payment; lowest interest rates, easiest qualifying for a loan.

Now we are going to go back to Step 5 to define our philosophy of “The Perfect Monopoly House” (TPMH). We listed our six criteria as:

  1. 3 bedroom, 2 bathroom (3br2ba)
  2. Great neighborhood
  3. Good in-metro area location with excellent freeway access
  4. Small lot size, minimal landscaping, no swimming pool
  5. Move in condition
  6. Low (cost) HOA; with excellent amenities

Note that this is TPMH for the purposes of this project. You could do “TheMonopolyProject” with other real estate types: e.g., AirBnB houses, luxury houses, two bedroom condos.

We chose the six criteria above because they define the comprise the easiest real estate asset. Everyone is familiar with the basic 3 bedroom/2 bath house. Everyone wants to live in a great neighborhood in good metro area with easy access to freeways and the international airport. Most of us want minimal or no landscaping duties and prefer a community pool for the same, minimal work reason. You want the house to be move in ready whether you are living in it yourself or renting it out. And finally, no one likes to pay (high) HOA fees. The basic 3br2ba single family home (3bd2ba SFH) is real estate that everyone understands and has experience with it. You have literally lived it. That is why we consider the 3bd2ba SFH “The Perfect Monopoly” house.

Why is this TPMH?

  1. A 3 bedroom, 2 bath house is the most versatile. Big enough for a 2-3 child family, usable for a couple with extra rooms as offices or hobby rooms.
  2. Everyone wants to live in a great neighborhood.
  3. In real estate the mantra is ‘Location, Location, Location’: Excellent freeway access allows access to work and play. Being in the metro area, as opposed to being on the periphery, enhances access to work and play opportunities.
  4. Small lot size means minimal or no landscaping work or fees. A low maintenance yard is a big plus. No swimming pool reduces costs and risks. Even better is there is a community pool in item #6.
  5. ‘Move in’ condition means you don’t have to take the time and expense to get the house ready to rent. It just makes it so much easier.
  6. Finally, you want a low cost “Homeowners Association” (HOA) with excellent amenities. You DON’T want no HOA. HOAs have an important function in keeping the great neighborhood ‘great’. They keep the ‘crazies’ in check. And it helps a lot if the HOA offers useful amenities like playgrounds, community swimming pool(s), a clubhouse, sports facilities (tennis, racquetball, volleyball and more).

Lets use the recently purchased 29th Avenue house in Apache Junction as an example. 29th Avenue scores perfect on criteria 1, 2, 3, 4, and 6. The only imperfection was that it was not in ‘move in ‘ condition:

  1. Perfect: 3 bedroom, 2 bath house with 1,219 sq ft on a ‘small’ 4,020 sq ft lot.
  2. Perfect: This is a great neighborhood. You can tell just by driving around. You see children playing in the three playgrounds; biking on the street.
  3. Perfect: The 202 freeway is well within a mile. As bonus, this house is located at the foot of the Superstition Mountains. The view is spectacular.

4. Perfect: The 4,020 sq ft lot is finished with rock and a few trees/bushes. It is surrounded by a low maintenance cinderblock wall.

 

Don’t worry. Jeff fixed the ugly gate on the left-hand side of the photo. It looks better than new now.

5.Below Average: We had to paint the exterior and make several repairs inside and out. The net cost was more than $5,000. You can see more details in our previous posts and upcoming post on the repair work.
6. Perfect: Actually, better than perfect. For $115/month “…the HOA amenities are amazing – a swimming pool, workout room, game room, playground, and your monthly association fee includes cable tv, internet, and trash pickup.” The only better deal I have ever seen on an HOA is our own Val Vista Lakes house at $92/month that includes a grand clubhouse, 7 tennis courts, racquetball courts, weighlifting room, pickleball courts, a wedding venue, a junior Olympic swimming pool, and a sandy lagoon pool with waterfalls on the mountain and more.

Next, Jim, Jeff and son Christian do some manual labor fixing up the house. It builds character and gets paint on your pants.