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.