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.
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
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
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.