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.




Weeks 15, 16, and 17 accomplishments

Things have been pretty hectic the last 3 week and I have not been able to update as much as I would have liked. I have been trying to get my tax information ready, and things are pretty busy at my real JOB as a software developer.

I did a little more work on the bathroom hole house. I changed out some light fixture on the advice of my agent. She noticed that the fixtures did not have a consistent finish. This never mattered on the rentals but she says it is important when selling a house.

Work has been progressing on the EON house and I expect to be finished within the next 3 weeks. I have replaced all the windows and plan on adding a metal roof.

Landlord Duties
All of my properties are now rented. I have one tenant who has not paid February rent and I have just sent her a late letter. We spoke in early February and agreed she was going to pay in the middle of the month. I forgot to check on it until today and I see she did not pay. I had another tenant give notice, but then her son wanted to rent the house. I just signed the lease with him at lunch today.

I followed up with lead #6 from last week. This was lead in which the house had been sold with the seller holding the mortgage. The mortgage is not being paid and the seller wants the house back. The numbers seem to work and I agreed to buy the house after they get it back, or buy the mortgage. The seller is still waiting on the buyer to sign the house back over to him. If this is not done next week, I will call back with some number. Continue reading