Week 18 Accomplishments

This has been a busy week. 
I have received my first offer on the bathroom hole house.  The asking price was $148,000 and the offer was $140,000, with me paying $3,000 towards closing.  I must alse put appliances (stove and dishwasher) in both kitchens.  This would net me about $127,000 after commissions, and I have invested less than $65k.  I countered at $142k and have not had a response.  The $140k is OK with me, but I think a little negotiation makes people feel like they got a good deal.  I am still not sure if it was the correct approach.

The EON house is still being renovated.  I took my first construction draw this week.  Most of the inside is complete and the crew is moving to the exterior.  I am still trying to find a drop-in stove that will fit in the cut-out I have.  We should be finished in two more weeks.

I am looking for another house and made many offers on bank owned properties.  I made offers on 9 houses.  All were bank owned and I offered about half of the asking price.  My intent is to get a counter and then I will go check out the house.  I received two counters and I am now negotiating the prices on these two – the rest had offers rejected and I may re-offer in a few months.  Here are the ones I am negotiating.

1. 1,900 sq/ft house in an OK neighborhood.  The list price was only $39k and I think the house is worth about $60k after repairs.  This house needs about $8,000 in repairs.  Due to the neighborhood it will probably be a rental and I could rent if for $750 per month.  I would not want to spend more than $45k on this house which tops out my offer at about $35k (including closing costs).  We have negotiated and I am now was $29k and the seller is at $34k.  However, I am trying to stay away from rentals and I am not sure I want another one unless the deal is great.  One of my tenants has given a notice because she has a lizard problem we cannot fix.  I asked her to look at this house – if she wants it I will try to buy it.

2.  1,360 sq/ft house in a nice neighborhood.  The ARV (after repair value) is about $90,000 but the house has structural damage.  Erosion has caused the slab to crack and the entire house it shifting.  This is a listed house that is offered as a short sale.  I have to get an estimate for the structural repair and included it with my offer.  The estimate was $20k and I offered $26,750.  I would like to be in this house for about $55k so that leaves about $8k for other minor repairs and closing.  I am waiting on a response now.

Landlord Duties
All my houses a rented and all rent was received on time.  One tenant informed me she is moving at the end of the month because she has a problem with lizards that we cannot resolve.  I am trying to find another house for her.

I am continuing to get leads from my website.  This week I received 4 leads.
1. Left contact info by no information on the house.  I did not call them back.

2. Inherited house in bad neighborhood

Asking price: $15,000.
Amount Owed: $0
Repairs: moderate
After Repaired Value: $35,000
Max Offer: $15,000 – repairs
I don’t want to invest in this neighborhood.  Also, it is in another town that I try to stay away from due to crime.

3. Moved due to health problems

Asking price: $40,000.
Amount Owed: $14,000
Repairs: $28,000
After Repaired Value: $70,000
Max Offer: $17,000
Owner is currently under chapter 11 bankruptcy and owes another$14k.  She wants to pay that off and have some money left over.  She does not want to take less than $35k, and I offered her $17k.  She turned me down, but I will follow up by email next week.

4. Inherited house in not so good neighborhood.

This person called and only left an address and contact info.  I called back but cannot get in touch with them.  I drove by the house and saw a competitor there.  I don’t really want to get into a bidding war so I dropped this one.  I would pay $35k minus repairs, but I don’t know what he is asking.




2 thoughts on “Week 18 Accomplishments

  1. I’m be interested in seeing how the house with the owner in bankruptcy goes. Never dealt with a seller in bankruptcy before, but I think once someone is in bankruptcy a judge has to approve all sales. Not sure though.

    Did the people who offered $140K for your house specify the type of appliances to install? As a buyer, I’d be worried the seller would put in the cheapest ones he could find. As a seller, that’s exactly what I’d do 🙂

  2. I spoke with my attorney about the house in bankruptcy and he confirmed that the court will need to approve the deal. He tells me I need to work through the seller’s attorney to work this out. She is already having trouble paying the monthly payments to the court, so it seems in everyone’s best interest to let her sell the house and pay off the bankruptcy in full. But when government is involved you never know what will happen.

    I am not optimistic about this becoming a deal. I offered her $17k, but she wants $35k – we are too far away. She needs $14k to pay off the bankruptcy. I will follow-up in a few weeks.

    I now have a contract on the bathroom hole house for $142k. They only specified the appliance color – black. The request was for a stove in dishwasher, not a refrigerator, and the house has two kitchens. My listing offered a $2k allowance for appliances and I will make it work within that budget. I don’t want to get the cheapest and run them off. I will probably spend about $600 on each stove and I need to price the dishwashers. I am waiting until their 15 day inspection period passes before I purchase.

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