The Cherry St house has been on the market for two weeks now. The open house was well attended, but no offers yet. Doesn't help that the realtors are out of town on vacation for a week! Keeping our fingers crossed.
The second house is on track to be finished this week. The air conditioning finally was installed on Friday (much too late for the poor folks who've been working there since early July!). Hope to have it listed before we leave for vacay.
Hubby is working with a friend of his to find the next project. They put in a bid on a single family home on a nice piece of land. It would definitely be the biggest project yet, but he had to bid way under the asking price in order to make any money at it. He has a little room to increase the offer, but not too much.
Meanwhile Hubby has been measuring and documenting all of the improvements made an how long everything took and how much everything costs. This is what he really brings to the game. He is really focused on developing consistent processes so he can more easily predict profits, etc.
Still haven't rented the one unit we still have open. Getting a few calls every couple of days, but the "right" tenant hasn't been found yet. After the previous disaster, he is obviously being a lot more cautious!
Sunday, July 29, 2012
Wednesday, July 18, 2012
Open House Scheduled!
Open house on the Cherry St property is scheduled for Sunday. Hoping to get some traffic through. I don't think it has been shown yet. Realtor's generally don't like open houses, but maybe we'll get lucky! This is probably a good time to give a shout-out to our realtor: John Chernesky from Remax (http://www.johnchernesky.com/). He definitely gets the job done for us.
Still taking electrical and HVAC bids on the 2nd Flipper (Village Lane). That seems to be coming together really really well. Hope to have it on the market by the first week in August.
Hubby starting looking for a third flipper today, but we really need to sell something before we can buy another. Hubby claims we can buy a third one but won't have enough money to fix it up - LOL. He is actually thinking about having a buddy of his invest in number 3 so we can continue moving forward.
Still haven't filled the empty apartment, and decided to at least report the $2100 we are owed from the eviction to the credit agencies. Weirdly the court system seems unable to help us (even though $1800 of it is an official judgement from a case). Hubby is going to look into it a bit more, but it doesn't look promising at all. It really stinks because we know where they work, but apparently we can't put any kind of lien on their paychecks. Hubby is sending a letter telling them to pay in 30 days, but they haven't paid in 6 months so I am obviously not very optimistic.
Still taking electrical and HVAC bids on the 2nd Flipper (Village Lane). That seems to be coming together really really well. Hope to have it on the market by the first week in August.
Hubby starting looking for a third flipper today, but we really need to sell something before we can buy another. Hubby claims we can buy a third one but won't have enough money to fix it up - LOL. He is actually thinking about having a buddy of his invest in number 3 so we can continue moving forward.
Still haven't filled the empty apartment, and decided to at least report the $2100 we are owed from the eviction to the credit agencies. Weirdly the court system seems unable to help us (even though $1800 of it is an official judgement from a case). Hubby is going to look into it a bit more, but it doesn't look promising at all. It really stinks because we know where they work, but apparently we can't put any kind of lien on their paychecks. Hubby is sending a letter telling them to pay in 30 days, but they haven't paid in 6 months so I am obviously not very optimistic.
Sunday, July 15, 2012
Good news and bad news on rentals
Well, I was just getting ready to announce that we had 6 out of 6 apartments fully paid this month (1 is still empty but more on that later), when Hubby told me that one of our tenants had bounced a check. This is a very expensive problem for the tenant, because now they owe a $100 fine. $50 for the bounced check, and $50 because the rent will be late this month!
On the good news front the empty apartment is ready to go and Hubby has already started receiving calls for it, although he hasn't advertised at all yet! One tip that some might find useful, he give existing tenants a "finder's fee" of $50 if the apartment is eventually rented to someone they recommend.
No activity on the first flipper (Cherry Street) this weekend. We were hoping that it would get some showing because it is new to the market. Keeping our fingers crossed for a quick sale!
On the good news front the empty apartment is ready to go and Hubby has already started receiving calls for it, although he hasn't advertised at all yet! One tip that some might find useful, he give existing tenants a "finder's fee" of $50 if the apartment is eventually rented to someone they recommend.
No activity on the first flipper (Cherry Street) this weekend. We were hoping that it would get some showing because it is new to the market. Keeping our fingers crossed for a quick sale!
Thursday, July 12, 2012
HVAC in Flipper 2
Hubby is going to meet with the HVAC guy tomorrow or Saturday to decide what to do about the heating and AC in the new place. It currently has oil heat and a separate Air Conditioning unit. He is thinking about converting to a heat pump for everything. There are pros and cons, of course. The Realtor says that gas heat is best, then a heat pump and last is oil heat. The problem with removing the oil furnace is that the oil tank has to be removed too. The tanks are often put in the basement after the basement is poured and then they build the house over top of it. Getting it out will be tricky (plus there is oil in it!).
Carpet cleaning on Sat for the open rental unit. The remaining stuff has to be stored for a few more weeks and then we'll trash it. There is a bit of drywall damage, but that can be easily fixed. Tenant screening starting next week, hopefully!
Carpet cleaning on Sat for the open rental unit. The remaining stuff has to be stored for a few more weeks and then we'll trash it. There is a bit of drywall damage, but that can be easily fixed. Tenant screening starting next week, hopefully!
Wednesday, July 11, 2012
Some Financials - or "How Profitable Is This Anyway"
Hubby and I discussed the course of the business a bit tonight. Some of his realtor friends want him to start negotiating with banks on their behalf, and he will get a portion of the profit from any sales that result. They also want him to do some property management (for rentals, and housing developments, etc.). He also wanted to discuss maybe bringing in a partner to help fund the next renovation (we have enough to fund about 2.5 projects, but not three full ones).
After much debate we figured out some of the financials. He will make about $15,000 from the first flipper, and he could make as much as $30,000 from the second. If we estimate conservatively, at $15,000 per property, and consider that we can comfortably do 2 properties per quarter. That is a profit of $120,000 per year (before income taxes, of course). This does not even count the income from the rentals. Very lucrative. Of course, we are dependent on the realtor getting the houses sold, but it is really in his best interest to move the properties (because we won't buy a third until one in sold). During the down times (which we might have in August) Hubby can work on the rentals, and also develop the estimating process, and start generating a list of interesting properties for the next round. Even if we miss our estimates in a particular quarter, we should still be just fine financially.
Decision: for right now, Hubby is going to stay focused on the flipping and rentals. It has only been two months. We can always re-evaluate after the first year.
In other news, we finally got the water turned on in flipper number two! Nothing much to discuss on the rentals right now.
After much debate we figured out some of the financials. He will make about $15,000 from the first flipper, and he could make as much as $30,000 from the second. If we estimate conservatively, at $15,000 per property, and consider that we can comfortably do 2 properties per quarter. That is a profit of $120,000 per year (before income taxes, of course). This does not even count the income from the rentals. Very lucrative. Of course, we are dependent on the realtor getting the houses sold, but it is really in his best interest to move the properties (because we won't buy a third until one in sold). During the down times (which we might have in August) Hubby can work on the rentals, and also develop the estimating process, and start generating a list of interesting properties for the next round. Even if we miss our estimates in a particular quarter, we should still be just fine financially.
Decision: for right now, Hubby is going to stay focused on the flipping and rentals. It has only been two months. We can always re-evaluate after the first year.
In other news, we finally got the water turned on in flipper number two! Nothing much to discuss on the rentals right now.
Tuesday, July 10, 2012
Finally listed!
Flipper is finally listed. Looks fantastic! Here is the listing with some great pictures of the property:
http://www.remax.com/property/108472628-60440123/1322-CHERRY-ST-Pottstown-PA-19464/
Bought all of the materials for the 2nd place yesterday morning. Work has already started and because it's a townhouse there is not much to do on the exterior (we needed to fix a drain pipe - already done - and the patio might need to be relaid because it slopes too much toward the house. Doing a minor kitchen remodel (new counter top, new floor, maybe new appliances, but keeping the cabinets). Need a few interior doors, but the exterior ones are already fixed and/or replace. New furnace and AC, of course (that seems to be one of our trademarks - and helps the resell value tremendously!).
Not much news on the rentals this month - definitely a good thing! - have received rents for 5.5 out of the 6 units that are occupied. Expecting the 2nd half of that last one on Friday this week (keep fingers crossed!). Need to get new tenants into the place that ended up being evicted, but really happy to be rid of the old ones. Almost giving up hope of ever seeing any of the money we are owed on that one. The place is clean already and we may move the stove from the new flipper to this apartment, but otherwise it is good to go. Hubby is confident it will be occupied by August 1st. It does feel good to have the rental situation a litter calmer, at least for now.
http://www.remax.com/property/108472628-60440123/1322-CHERRY-ST-Pottstown-PA-19464/
Bought all of the materials for the 2nd place yesterday morning. Work has already started and because it's a townhouse there is not much to do on the exterior (we needed to fix a drain pipe - already done - and the patio might need to be relaid because it slopes too much toward the house. Doing a minor kitchen remodel (new counter top, new floor, maybe new appliances, but keeping the cabinets). Need a few interior doors, but the exterior ones are already fixed and/or replace. New furnace and AC, of course (that seems to be one of our trademarks - and helps the resell value tremendously!).
Not much news on the rentals this month - definitely a good thing! - have received rents for 5.5 out of the 6 units that are occupied. Expecting the 2nd half of that last one on Friday this week (keep fingers crossed!). Need to get new tenants into the place that ended up being evicted, but really happy to be rid of the old ones. Almost giving up hope of ever seeing any of the money we are owed on that one. The place is clean already and we may move the stove from the new flipper to this apartment, but otherwise it is good to go. Hubby is confident it will be occupied by August 1st. It does feel good to have the rental situation a litter calmer, at least for now.
Friday, July 6, 2012
First Flipper Goes On Sale on Monday
I've been neglecting the blog lately - too much going on! - I will try to do better.
The first property hubby has renovated goes on the market on Monday. Quite a transformation (will try to upload pics tomorrow after it is fully cleaned). A lot more work that he originally anticipated, but we should still get a nice profit and certainly have the satisfaction of seeing the transformation before our very eyes!
Hubby has started work (well not personally, but the general contractor has started) on the new townhouse. Finally closed on that property a week ago. Working with the HUD was a major pain in the neck. We ended up closely a full two months after the original date, and the REALLY stupid part was that the listing indicated that they wanted to close in like 10 days! This property seems like it will require less. Contractor has already replaced the front door, fixed the sliding glass doors, removed a section of drywall that had mold behind it, and fixed the plumbing (the copper was stripped). We are deciding how much of a kitchen reno to do, and have to do the paint and carpet (as always!). Also need to replace the furnace and AC. Looking for a nice profit out of this one.
On the rental front, hubby reported that rent for 4.5 out of 7 properties is received for July! Planning to pick up one more payment tomorrow, and the second half from someone next Friday. FINALLY evicted the tenants who were months and months behind on the rent. That is now empty and clean. Hubby is confident he can have it rented by August 1st.
The first property hubby has renovated goes on the market on Monday. Quite a transformation (will try to upload pics tomorrow after it is fully cleaned). A lot more work that he originally anticipated, but we should still get a nice profit and certainly have the satisfaction of seeing the transformation before our very eyes!
Hubby has started work (well not personally, but the general contractor has started) on the new townhouse. Finally closed on that property a week ago. Working with the HUD was a major pain in the neck. We ended up closely a full two months after the original date, and the REALLY stupid part was that the listing indicated that they wanted to close in like 10 days! This property seems like it will require less. Contractor has already replaced the front door, fixed the sliding glass doors, removed a section of drywall that had mold behind it, and fixed the plumbing (the copper was stripped). We are deciding how much of a kitchen reno to do, and have to do the paint and carpet (as always!). Also need to replace the furnace and AC. Looking for a nice profit out of this one.
On the rental front, hubby reported that rent for 4.5 out of 7 properties is received for July! Planning to pick up one more payment tomorrow, and the second half from someone next Friday. FINALLY evicted the tenants who were months and months behind on the rent. That is now empty and clean. Hubby is confident he can have it rented by August 1st.
Thursday, May 31, 2012
Tenants moving out
It seems like we will be losing tenants from at least 3 of our 7 apartments, and maybe as many as 5! We are happy about 2 of the tenants who are definitely leaving. One has struggled to pay the rent on and off from the beginning. The second is the unit we are trying to evict. Unfortunately the other three are all fabulous tenants. One family has lived in their unit for over 4 years. We will certainly miss them, and Hubby will be very busy trying to fill vacancies as they come up. Luckily things seem like they will be spread out a bit, so we won't have 5 empty units at one time.
One of the problems with move-outs and showing is that you have almost the same problems as showing a house, but none of the control. Hubby showed one of the apartments tonight, but the woman who was interested was really turned off by the mess, from both the interior of that unit, and by another tenant who has junk all over the place. We may need to wait until the tenant is completely out, and force the other tenants to clean up their act before even trying to show the place. This definitely means lost rent as the place sits vacant.
The renovations are continuing on the flipper and we are still waiting to close on the 2nd flipper (although the realtor says he has a buyer for the 2nd one. All we have to do is get thru the buy and renovation!). Hubby is continuing to work with folks on craigslist about the wheel chair ramp and I finally finished up with all the eBay stuff. Hubby is enjoying working on the property half days. He may put in some "overtime" this weekend to paint the basement!
One of the problems with move-outs and showing is that you have almost the same problems as showing a house, but none of the control. Hubby showed one of the apartments tonight, but the woman who was interested was really turned off by the mess, from both the interior of that unit, and by another tenant who has junk all over the place. We may need to wait until the tenant is completely out, and force the other tenants to clean up their act before even trying to show the place. This definitely means lost rent as the place sits vacant.
The renovations are continuing on the flipper and we are still waiting to close on the 2nd flipper (although the realtor says he has a buyer for the 2nd one. All we have to do is get thru the buy and renovation!). Hubby is continuing to work with folks on craigslist about the wheel chair ramp and I finally finished up with all the eBay stuff. Hubby is enjoying working on the property half days. He may put in some "overtime" this weekend to paint the basement!
Wednesday, May 23, 2012
Wallpaper and wheel chair ramp
Hubby has been learning this week how hard a renovation can be. He has been removing wall paper all week and is finding it both frustrating and satisfying. They work 4 days per week. Hubby works 5 hours and the contractor/handyman is supposed to work 10 hours. Next week, because of the holiday, they will work Tues-Fri instead of Mon-Thurs. I am really excited to see the place. He managed to get the kitchen cost down to about $1300 (cabinets and countertops). Still need floor and appliances (and paint, of course, but that is relatively cheap). Closing on 2nd house is now scheduled for next Friday and can't come a moment too soon. Now that the weather is changing, you are overcome by the mold smell when you walk in there. Son still helping out whenever he can.
Tenant issues are not going so well. These guys are real con-men! Hubby wants to cut a deal with the guy we are trying to evict to just him out of there without the whole court thing. He is giving them a break on the court finding and keeping the deposit and then the guy asks to stay until June 15th! Apparently 5 months of free rent is not enough! Meanwhile the unit on the payment plan sent him a real nasty text message because they were offended about something he said while collecting the rent last week. With anyone else, they would have been out on the street. Some people just feel entitled to everything. Drives me crazy!
Tenant issues are not going so well. These guys are real con-men! Hubby wants to cut a deal with the guy we are trying to evict to just him out of there without the whole court thing. He is giving them a break on the court finding and keeping the deposit and then the guy asks to stay until June 15th! Apparently 5 months of free rent is not enough! Meanwhile the unit on the payment plan sent him a real nasty text message because they were offended about something he said while collecting the rent last week. With anyone else, they would have been out on the street. Some people just feel entitled to everything. Drives me crazy!
Monday, May 21, 2012
Reno continues/court case update
Hubby is trying to get the tenants out of the house as fast as he can. Even offered to forgive a month of rent just to get rid of them. No idea what they are going to do. Strongly suspect they are going to drag it out as long as possible. At least the judge agreed to revise the judgement to include May's rent, and Hubby is going to file for possession as soon as possible.
Reno work is continuing. I saw the new kitchen design today and it looks really really nice. The whole project will take only about $2000 in materials (not counting paint and flooring). That's not really too back for cabinet/countertops/backsplash. Still debating the design a little. I like shelves instead of upper cabinets. I think it will look better and be more modern and versatile. Hubby is having to referee the debate between me and the handyman. Usually we agree, but hubby still insists on asking both of us! Son says the attic looks fantastic now that an old "Beaver board" ceiling has been removed and the place is cleaned up! One room down, 8 to go - lol!
Reno work is continuing. I saw the new kitchen design today and it looks really really nice. The whole project will take only about $2000 in materials (not counting paint and flooring). That's not really too back for cabinet/countertops/backsplash. Still debating the design a little. I like shelves instead of upper cabinets. I think it will look better and be more modern and versatile. Hubby is having to referee the debate between me and the handyman. Usually we agree, but hubby still insists on asking both of us! Son says the attic looks fantastic now that an old "Beaver board" ceiling has been removed and the place is cleaned up! One room down, 8 to go - lol!
Thursday, May 17, 2012
Starting renovation and court decision
Well, it took all week, but Hubby (with help from Son) finally started the renovation for the flipping property. It literally took almost two weeks (and lots and lots of trips to Good Will) to get all of the previous owners belongings out of the house. Some tips: Good Will will take as much as you can give them, but not furniture; many people will recycle scrap metal, and will come pick up unwield objects like stoves and refridgerators; even with all of the above, a lot will need to be thrown out. We ended up completely filling two big dumpsters and we didn't really have a lot of furniture. Hoping to sell a washer/dryer and still have a lot of stuff on Ebay tonight! Also, put a "free stuff" posting on Craigs list about the wheel chair ramp. Many inquiries. We won't make any money directly, but won't have to pay the labor or disposal costs for taking it out (plus I feel better by not throwing it out).
Hubby and son basically did some demolition today. The kitchen cabinets were removed and some weird ceiling tiles were also removed (luckily the ceiling above these tiles is in pretty good shape). Still lots of dust and I'm worried about son's allergies and asthma. He said the biggest problem was the overhead stuff. Hopefully we won't need another dumpster, because there actually was not that much demo on this place. It will be exciting to see it take shape. It already looks bigger because the contents are gone.
Unfortunately the day ended on a sour note when Hubby got the results of his eviction proceedings in the mail. Very frustrating, but the judge did not grant the full amount. It appears as if May's rent was not included. The tenant now has until a certain to pay or we can file for "possession". The possession thing means that they will be given 10 days to move out or we can lock them out. I'm not really crazy about this prospect, and we still aren't sure about the process for collecting on the judgement.
Hubby and son basically did some demolition today. The kitchen cabinets were removed and some weird ceiling tiles were also removed (luckily the ceiling above these tiles is in pretty good shape). Still lots of dust and I'm worried about son's allergies and asthma. He said the biggest problem was the overhead stuff. Hopefully we won't need another dumpster, because there actually was not that much demo on this place. It will be exciting to see it take shape. It already looks bigger because the contents are gone.
Unfortunately the day ended on a sour note when Hubby got the results of his eviction proceedings in the mail. Very frustrating, but the judge did not grant the full amount. It appears as if May's rent was not included. The tenant now has until a certain to pay or we can file for "possession". The possession thing means that they will be given 10 days to move out or we can lock them out. I'm not really crazy about this prospect, and we still aren't sure about the process for collecting on the judgement.
Sunday, May 13, 2012
Yard Sale and more Tenant Issues
So, we did the yard sale for the contents of the flipper. It was a huge bust. Made barely $100. Ugh. I will do a little better because I'll sell some stuff on eBay or Craigs list, but most of it will go into the trash or have to get donated to Good Will or something similar. At least we'll get a tax write off from some of it!
Digging through the contents was a dirty/demoralizing job. Found some old pics that broke my heart. Of course, most of it was just junk (no dead bodies or millions dollars - lol!). Ended up selling a box full for $5 today. Hubby has a scrap metal collector picking up some of the appliances and bigger things tomorrow, but it still feels really wasteful.
The tenant situation is getting bad. Still no judgement from the court, officially, so the tenants who haven't paid in four months are still living there without payment. One other tenant texted Hubby that she isn't going to pay this month and will move out by the end of the month and he can just keep the deposit. These folks don't realize that it doesn't really work that way! He will probably be happy just to get her out! The guy on the payment plan paid on Friday, but came up a little short <sigh>. Our most reliable tenants of three years are having another child and will move out over the summer. Well, at least Hubby can now dedicate full-time to getting good tenants in place.
Digging through the contents was a dirty/demoralizing job. Found some old pics that broke my heart. Of course, most of it was just junk (no dead bodies or millions dollars - lol!). Ended up selling a box full for $5 today. Hubby has a scrap metal collector picking up some of the appliances and bigger things tomorrow, but it still feels really wasteful.
The tenant situation is getting bad. Still no judgement from the court, officially, so the tenants who haven't paid in four months are still living there without payment. One other tenant texted Hubby that she isn't going to pay this month and will move out by the end of the month and he can just keep the deposit. These folks don't realize that it doesn't really work that way! He will probably be happy just to get her out! The guy on the payment plan paid on Friday, but came up a little short <sigh>. Our most reliable tenants of three years are having another child and will move out over the summer. Well, at least Hubby can now dedicate full-time to getting good tenants in place.
Tuesday, May 8, 2012
Court Case Results
So, after all the worrying, the tenant didn't even show up for court this morning. This usually means that we get an automatic judgement. The judge is going to figure out how Kae can manage to get the money we are owed (4 months rent! + court costs). It may involve attaching their paychecks. Of course, this doesn't mean that they are gone from the apartment. In 10 days we file for possession and if they are not gone within 10 days after that, we can change the locks and sell all of their stuff. This is a little scary. We've never actually thrown anyone out before. We really don't feel bad about the guy that we believe is causing all of the trouble, but he lives with his girlfriend and her teenage son, and that does bother me a little. We will have to see how it goes!
Closing on the house that we will be flipping today. Started getting organized for the yard sale, and met with our HVAC guy to get an estimate on the furnace, which will have to be replaced. Also found out that we won't actually be tied into the property for 90 days like we feared. It turns out the 90 clause is just for short sales, not for general sales or foreclosures. That is a big help because we are hoping to turn it around in about 60 days.
Closing on the house that we will be flipping today. Started getting organized for the yard sale, and met with our HVAC guy to get an estimate on the furnace, which will have to be replaced. Also found out that we won't actually be tied into the property for 90 days like we feared. It turns out the 90 clause is just for short sales, not for general sales or foreclosures. That is a big help because we are hoping to turn it around in about 60 days.
Sunday, May 6, 2012
Yard Sale in Our Future
So ... we got into the house that Hubby is closing on, on Tuesday. It is full of crap that we need to get rid of. Much of it is trash, but there is enough useful stuff, that we feel bad just tossing, so we are going to hold a yard sale. Hubby wants the place empty as quickly as possible, so we will have to work every night from Tues thru Friday to get the yard sale organized, and then have the yard sale Sat and Sun!
Never a dull moment. Hopefully the yard sale will pay for the dumpster we will need to get rid of whatever doesn't sell!
Never a dull moment. Hopefully the yard sale will pay for the dumpster we will need to get rid of whatever doesn't sell!
Saturday, May 5, 2012
Sneak preview of court case
As I mentioned before, we have two apartments that are really problematic right now. One is on a payment plan and they are doing great. They should be completely caught up by the end of the month (fingers crossed). The others missed payments in the plan right away and are now 4 months behind on the rent. We have a court date scheduled on Tues to evict them. While hubby was fixing something at the property today, one of the tenants told him that the man that we are trying to evict is going to tell the court that there is a problem that we refuse to fix and that is why he is withholding the rent! This is very frustrating, especially since hubby takes care of every single little problem immediately, and usually at great expense. The tenant never reported the supposed problem to us. Unfortunately, the judge has been very difficult to deal with through out the process, so we are very concerned that he will take this guy's word for it and delay the eviction. Did I mention 4 months without rent!!!!!!!!! The "problem" would cost all of $50 to fix. Don't they think we would have fixed it, if it was true that the rent was withheld because of it? Grrrr!!!! A lot tenants get behind because of job losses, etc. I'm not saying that they are perfect, but we have such a history of working with people to try to help them back on their feet. The folks in this problem apartment both have good jobs, but they just will not pay the rent. It's days like this that we feel like being total slumlords, or throwing in the towel!
The flipping properties seem to be back on track. Hubby will close on one on Tues (busy day!). We are going over tomorrow to take a look around. The house is not empty, so we have to figure out the best way to get rid of the stuff left behind: dumpster, yard sale, or craigs list! Hubby was able to negotiate a deal with the home owners association for the 2nd flipper. They are going to waive a $2000 charge because they can't produce a receipt. The seller has agreed to pay the rest of the amount owed. Hopefully we will close on this property sometime next week.
The flipping properties seem to be back on track. Hubby will close on one on Tues (busy day!). We are going over tomorrow to take a look around. The house is not empty, so we have to figure out the best way to get rid of the stuff left behind: dumpster, yard sale, or craigs list! Hubby was able to negotiate a deal with the home owners association for the 2nd flipper. They are going to waive a $2000 charge because they can't produce a receipt. The seller has agreed to pay the rest of the amount owed. Hopefully we will close on this property sometime next week.
Thursday, May 3, 2012
Big Decision Made and Title Insurance Snafu
Well Hubby official gave notice to his full-time employers last week. We are in it with both feet now!
Still waiting on the closing for the townhouse I mentioned last time. Tonight we have to go bug the Association President at that development. Apparently there is a $2000 charge to the association that the seller (a government agency) is questioning and they won't sign off on the sale until the issue is resolved.
For a second property we are trying to buy, interestingly enough from our realtor, we ran into a problem with title insurance. For the realtor it is a true flipper, he bought it one week and planned to sell it to us the next week. The title insurance companies won't insure it, because they say that the realtor agreement with the bank that he purchased from had an unstated 90 day wait clause. The title insurance company won't take it for 90 days, but that doesn't fit Hubby's time table at all. We are trying to work out a deal with the realtor to have him self-insure the title for the one-week time that he owned the property. This involves lawyers on each side, so it is taking some time to resolve.
With some luck we will own two property next week!
Meanwhile the renter situation is looking a bit brighter. One of the tenants that is on a payment plan has been paying regularly. Sadly, the other one is being taken to court next week for eviction proceedings. Meanwhile Hubby is out at midnight trying to track down someone who still owes $50 for this month's rent!
Still waiting on the closing for the townhouse I mentioned last time. Tonight we have to go bug the Association President at that development. Apparently there is a $2000 charge to the association that the seller (a government agency) is questioning and they won't sign off on the sale until the issue is resolved.
For a second property we are trying to buy, interestingly enough from our realtor, we ran into a problem with title insurance. For the realtor it is a true flipper, he bought it one week and planned to sell it to us the next week. The title insurance companies won't insure it, because they say that the realtor agreement with the bank that he purchased from had an unstated 90 day wait clause. The title insurance company won't take it for 90 days, but that doesn't fit Hubby's time table at all. We are trying to work out a deal with the realtor to have him self-insure the title for the one-week time that he owned the property. This involves lawyers on each side, so it is taking some time to resolve.
With some luck we will own two property next week!
Meanwhile the renter situation is looking a bit brighter. One of the tenants that is on a payment plan has been paying regularly. Sadly, the other one is being taken to court next week for eviction proceedings. Meanwhile Hubby is out at midnight trying to track down someone who still owes $50 for this month's rent!
Saturday, April 21, 2012
Closing Delayed
It takes a ton of people to actually buy or sell a property. There are the obvious (buyer and seller, real estate agents, etc) and the not too surprising (title insurance personnel who actually manage the closing docs) but there are a bunch of others you may not consider, and it is worth keeping them in mind.
First of all are the local tax authorities, especially if you live in a state with a property tax. The buyer and seller each pay a portion of the property tax, for the portion of the fiscal year when the property was owned by each party. Of course, only one person actually pays the tax, so the other party reimburses for the amount owed.
This usually works out fine, but if you manage to close near a tax due date, things get weirder. The title company needs to contact the taxing agency and find out how much the tax is and whether it has been paid. When buying or selling you really need to look over the HUD very carefully and double check everything. Make sure you understand each line item. Once when we bought a property 2 days after the new fiscal year started, the title company inadvertently tried to get us to reimburse the seller for almost a year of property tax because they assumed the tax had been paid (it wasn't). Most recently, we were charged with a reimbursement of tax, which turned out to be legitimate, but the title company assumed the tax wasn't paid, and was going to make the seller pay it at closing. Something like this can hold up the whole process and the last thing you want to do is wire money for a closing and then get stuck at the table when someone notices an error.
Another factor to consider, and this is what just delayed our most recent closing is the home owners association, if you are buying a condo or townhouse (or any other property that has an HOA). A lot of these properties have special assessments which must be paid at closing by the buyer or the seller. In this case, the HOA has an assessment but we don't know the details. The title insurance company has been all over the HOA (really the management company that does the processing for the HOA) and even paid an extra fee for expedited service. Unfortunately the HOA did not respond in a timely manner and the closing is now delayed two days. This means the HUD will need to be redone (for the taxes) and we are up against a wall in terms of our contract with the seller. Keeping our fingers crossed for closing on Wed.
First of all are the local tax authorities, especially if you live in a state with a property tax. The buyer and seller each pay a portion of the property tax, for the portion of the fiscal year when the property was owned by each party. Of course, only one person actually pays the tax, so the other party reimburses for the amount owed.
This usually works out fine, but if you manage to close near a tax due date, things get weirder. The title company needs to contact the taxing agency and find out how much the tax is and whether it has been paid. When buying or selling you really need to look over the HUD very carefully and double check everything. Make sure you understand each line item. Once when we bought a property 2 days after the new fiscal year started, the title company inadvertently tried to get us to reimburse the seller for almost a year of property tax because they assumed the tax had been paid (it wasn't). Most recently, we were charged with a reimbursement of tax, which turned out to be legitimate, but the title company assumed the tax wasn't paid, and was going to make the seller pay it at closing. Something like this can hold up the whole process and the last thing you want to do is wire money for a closing and then get stuck at the table when someone notices an error.
Another factor to consider, and this is what just delayed our most recent closing is the home owners association, if you are buying a condo or townhouse (or any other property that has an HOA). A lot of these properties have special assessments which must be paid at closing by the buyer or the seller. In this case, the HOA has an assessment but we don't know the details. The title insurance company has been all over the HOA (really the management company that does the processing for the HOA) and even paid an extra fee for expedited service. Unfortunately the HOA did not respond in a timely manner and the closing is now delayed two days. This means the HUD will need to be redone (for the taxes) and we are up against a wall in terms of our contract with the seller. Keeping our fingers crossed for closing on Wed.
Friday, April 13, 2012
Hubby quitting work to invest full time in real estate!
Well, we learned a big lesson about flipping properties about a week ago (late on blogging because I was out of town for a family emergency). The second place we were trying to buy for 75K went to someone else. Here is how it all unfolded:
- Hubby got the bid in on Wed night. Bid 75K and had and inspection contingency.
- Handyman went over early Thurs morning and said the place looked great.
- Realtor called or emailed around 10:30 Thursday saying that the bank had to officially break a prior agreement.
- Hubby crazy busy at day job all day. Finally called realtor back on the drive home. Told him to drop the inspection contingency.
- Hubby thought about it some more and called realtor back and told him to offer full price.
- Learned first thing on Friday morning that the place went to someone else. Someone offered full price with no contingencies on Thursday afternoon.
This was a real bummer because if Hubby had been working full-time on flipping he could have reacted sooner and we would have had the place. Essentially a potential missed opportunity for an easy 30K. Bottom line, when something hot comes up, investors are all over it very quickly and we need to be able to react quickly and aggressively. Giving the banks full price with no contingencies, whenever possible, is the way to go! Obviously we don't want to lose money, but sometime you have to take a bit of a risk.
Hubby decided that the time was right to bite the bullet and leave his full time job. He is away right now but plans to quit as soon as he returns.
Hubby also negotiated a weekly salary of $1250 with the handyman (we will buy all materials and hubby will work with him for half days, at least). We feel this is reasonable ($250 per day), especially because we won't necessarily be able to keep him employed non-stop. I think it is a little high, but we'll see how it works out. As long as we can make money, it won't matter too much.
On the rentals front, 5 out of 7 have paid for April (except one that owes $50, but we are pretty close anyway on those 5). Another unit is on a payment plan of $350 per week until they get caught up and the first two payments have been received with no problem. The 7th is not looking so good. They were on a payment plan, but blew it. They were supposed to pay $700 while we were gone (they called to tell US that this money was coming) but when my son showed up to collect, only $300 was forthcoming (and this was after my son had to drive him to the ATM). They have to pay all past and current rent, late penalties, check bouncing penalties, and legal fees by April 23rd or we will take them to court to start eviction proceedings.
- Hubby got the bid in on Wed night. Bid 75K and had and inspection contingency.
- Handyman went over early Thurs morning and said the place looked great.
- Realtor called or emailed around 10:30 Thursday saying that the bank had to officially break a prior agreement.
- Hubby crazy busy at day job all day. Finally called realtor back on the drive home. Told him to drop the inspection contingency.
- Hubby thought about it some more and called realtor back and told him to offer full price.
- Learned first thing on Friday morning that the place went to someone else. Someone offered full price with no contingencies on Thursday afternoon.
This was a real bummer because if Hubby had been working full-time on flipping he could have reacted sooner and we would have had the place. Essentially a potential missed opportunity for an easy 30K. Bottom line, when something hot comes up, investors are all over it very quickly and we need to be able to react quickly and aggressively. Giving the banks full price with no contingencies, whenever possible, is the way to go! Obviously we don't want to lose money, but sometime you have to take a bit of a risk.
Hubby decided that the time was right to bite the bullet and leave his full time job. He is away right now but plans to quit as soon as he returns.
Hubby also negotiated a weekly salary of $1250 with the handyman (we will buy all materials and hubby will work with him for half days, at least). We feel this is reasonable ($250 per day), especially because we won't necessarily be able to keep him employed non-stop. I think it is a little high, but we'll see how it works out. As long as we can make money, it won't matter too much.
On the rentals front, 5 out of 7 have paid for April (except one that owes $50, but we are pretty close anyway on those 5). Another unit is on a payment plan of $350 per week until they get caught up and the first two payments have been received with no problem. The 7th is not looking so good. They were on a payment plan, but blew it. They were supposed to pay $700 while we were gone (they called to tell US that this money was coming) but when my son showed up to collect, only $300 was forthcoming (and this was after my son had to drive him to the ATM). They have to pay all past and current rent, late penalties, check bouncing penalties, and legal fees by April 23rd or we will take them to court to start eviction proceedings.
Wednesday, April 4, 2012
Yet another purchase
Hubby found a great deal on a house from an online service that sends him emails daily (I think his realtor set this up). It is very close and was listed for $79,000. He asked me to go look at the property because he was going to be very busy. The usual realtor wasn't available, so another member of his "team" met us there (hubby ended up leaving work early to see the place). It is in really great shape, and in a really nice area. Lots of cosmetic stuff, and the mechanicals need to be replaced (furnace, hot water heater, etc.). Our HVAC guy came over to see it later and said he could easily install central air (it is a rancher and the floor of the main level is exposed in the basement). Central air will instantly add $10,000 in value. There is some dispute about how much it will sell for when finished. I think it could go for nearly $150,000. The realtor said the absolute lowest was probably $125,000.
Hubby bid $75,000. The listing was weird. It was originally listed for 75, but then taken on the market and relisted at $79,000. They want a cash deal, and a very quick closing date. We may end up closing on both properties in one day! Luckily both will be pretty quick turn-arounds and hubby can quit his job for good to keep the business running (that was our goal all along).
Not much happening on the rental front. One severely behind unit is now on a $350 per week payment plan from now to the end of May to catch up. I am doubtful. The other unit that is majorly in arrears had a 2nd eviction notice posted last week. They will probably be out by the end of April. Early in the month, we have rents from 4 out of 7 units. A fifth unit and the first $350 payment are supposed to be collected on Friday. Keeping my fingers crossed!
Hubby bid $75,000. The listing was weird. It was originally listed for 75, but then taken on the market and relisted at $79,000. They want a cash deal, and a very quick closing date. We may end up closing on both properties in one day! Luckily both will be pretty quick turn-arounds and hubby can quit his job for good to keep the business running (that was our goal all along).
Not much happening on the rental front. One severely behind unit is now on a $350 per week payment plan from now to the end of May to catch up. I am doubtful. The other unit that is majorly in arrears had a 2nd eviction notice posted last week. They will probably be out by the end of April. Early in the month, we have rents from 4 out of 7 units. A fifth unit and the first $350 payment are supposed to be collected on Friday. Keeping my fingers crossed!
Saturday, March 31, 2012
Inspection of next flipping property
Inspection of property we are in the process of purchasing today. No big surprises. One thing that came up was that the electrical box needs to be upgraded because it's only 60 amp (100 is the acceptable minimum). On the good news front, it appears that the mold problem is happening due to poor drainage and an underground rain downspout that may be broken. Both of those things are very easy to fix, so we can just run the downspout above ground and away from the house and add some top soil so the drainage is away from the property. Another interesting tidbit is the price difference between inspectors. The guy we use charges $200, and that includes everything, including the reports. We've heard estimates as high as $600. Definitely pays to shop around! Still working on the eviction process and looking for a second property to buy so we can start a pipeline (always having a project in the works will help everyone).
Thursday, March 29, 2012
Eviction Notice tomorrow and Inspection Scheduled
Inspection officially scheduled for Saturday for the new property.
Bank called to say they screwed up the loan paperwork and it needs to be redone!
Hired a friend who's a PI to deliver an eviction notice at 6 a.m. tomorrow morning.
Feels like progress on all fronts!
Bank called to say they screwed up the loan paperwork and it needs to be redone!
Hired a friend who's a PI to deliver an eviction notice at 6 a.m. tomorrow morning.
Feels like progress on all fronts!
Wednesday, March 28, 2012
Bid accepted - project moving forward
Bid officially and finally accepted by the bank on the townhouse we first saw weeks ago (the one that was waiting for an owner occupier bid first). Title search has begun and the inspection is scheduled for Saturday. We know the inspection will report a lot of problems, but Hubby uses that report as a sneak preview of what will be found when he goes to resell (pretty clever!). Our handy man called today looking for work, but the closing can't take place before the end of April due to all of the paperwork and because we are dealing with a bank, not a real human being!
Lost the bid on the other townhouse, someone offered more than asking price. Oh well, plenty of other fish in the sea. We worry sometimes because we pay some one to do everything. Most people who flip houses do a lot of the construction work themselves. Paying for everything lowers our profit, so we will have to make up in volume (we are happy to make 10K on a property, others want to make 30K).
Meanwhile Hubby is really really frustrated on the eviction process. We are getting zero help from the local and the county courthouses. The judge wants us to give another notice to one group owes almost $1000 and another unit owes even more than that. First eviction notice filed on both, but because we entered into a payment agreement with one group, the judge says we have start the process from scratch! A lawyer we hired for an opinion says that the tenant has waived his right to a notice in the lease, but we are bound by what the court will say.
Could not find a constable who would deliver the eviction notice for us, but we remembered a friend who's a parole officer and PI. Going to ask him to officially deliver the notice. Hoping this will really get the tenants attention!
Lost the bid on the other townhouse, someone offered more than asking price. Oh well, plenty of other fish in the sea. We worry sometimes because we pay some one to do everything. Most people who flip houses do a lot of the construction work themselves. Paying for everything lowers our profit, so we will have to make up in volume (we are happy to make 10K on a property, others want to make 30K).
Meanwhile Hubby is really really frustrated on the eviction process. We are getting zero help from the local and the county courthouses. The judge wants us to give another notice to one group owes almost $1000 and another unit owes even more than that. First eviction notice filed on both, but because we entered into a payment agreement with one group, the judge says we have start the process from scratch! A lawyer we hired for an opinion says that the tenant has waived his right to a notice in the lease, but we are bound by what the court will say.
Could not find a constable who would deliver the eviction notice for us, but we remembered a friend who's a parole officer and PI. Going to ask him to officially deliver the notice. Hoping this will really get the tenants attention!
Saturday, March 24, 2012
Tenants and Maintenance
Hubby spent all afternoon reinstalling a cabinet in one of the units. I am convinced that the tenants were rough with it, but no way to be sure. The guy who owned the place before us was fixing it up himself and the cabinet was clearly not anchored properly. Hubby said it looks a little crooked now, but is at least usable.
The thing that frustrated me is that this unit is one of the no pay/slow payers. At least one of the adults now apparently has a job and promised his whole paycheck next Friday toward the rent we will see!
Hubby went to the courthouse to take next steps against the unit that violated their payment plan. Some towns have really helpful people working at the courthouse and they help step us through the eviction process. Unfortunately, this is not one of those situations. Ended up making an appointment with the judge for Monday and hiring a lawyer friend of ours to make sure that we have done everything legally so far. Very annoying.
On the flipping front, it appears like we will definitely get one of the places that we bid on, in spite of a paperwork snafu this week. The other bid has been put "on hold" by the bank that owns the property (whatever that means). We were only a couple of thousand dollars apart on that one so it seems like we should be able to work something out. Our realtor insists that "on hold" in a good thing!
The thing that frustrated me is that this unit is one of the no pay/slow payers. At least one of the adults now apparently has a job and promised his whole paycheck next Friday toward the rent we will see!
Hubby went to the courthouse to take next steps against the unit that violated their payment plan. Some towns have really helpful people working at the courthouse and they help step us through the eviction process. Unfortunately, this is not one of those situations. Ended up making an appointment with the judge for Monday and hiring a lawyer friend of ours to make sure that we have done everything legally so far. Very annoying.
On the flipping front, it appears like we will definitely get one of the places that we bid on, in spite of a paperwork snafu this week. The other bid has been put "on hold" by the bank that owns the property (whatever that means). We were only a couple of thousand dollars apart on that one so it seems like we should be able to work something out. Our realtor insists that "on hold" in a good thing!
Thursday, March 22, 2012
Latest updates
Wow - I was away for a week and a lot happened! Hubby put bids in on two places. One is the townhouse near us that he was blocked from bidding on and they accepted his bid right away! Woo Hoo! Flipping house number 2 in in the works. Very excited but working with the banks is frustrating. They wanted everything submitted thru a website, but once they accepted they wanted original documentation fedex'ed right away. Of course, Hubby did that, and, of course, no word from the bank since!!!
The second bid went in for a condo near one of the rentals we own. Listed for $57K, he originally bid $49 and is in negotiations. Says the highest he can go is $52 and still make what he considers to be the min profit. The place is really dirty and needs paint (I haven't seen it, but that is what he says). $10K max. After all that it should sell for something in the high $80s, giving at least a $10K profit once you consider closing costs on both ends. Feels like things are moving now!
Still dealing with frustrations from tenants in 2 apartments. One group has not paid the rent in 2 months. They claim that a tax refund is due on April 3rd (was originally March 26th). On top of all of that, these people are constantly complaining about something with the apartment. Today it was a cabinet that is loose. As far as I'm concerned they have no cause for complaint given all the leeway that Hubby has given them!
Another group of tenants is on a payment plan, but already falling behind. The excuses are amazing: can get rides, paycheck eaten up by child support, etc etc. They are always running around, but never have money for the rent! Luckily we have 5 good, reliable, tenants because these two units would spoil him on the idea of landlording forever (at least they would for me - he has more patience!). Going to court tomorrow to start eviction for these folks!
The second bid went in for a condo near one of the rentals we own. Listed for $57K, he originally bid $49 and is in negotiations. Says the highest he can go is $52 and still make what he considers to be the min profit. The place is really dirty and needs paint (I haven't seen it, but that is what he says). $10K max. After all that it should sell for something in the high $80s, giving at least a $10K profit once you consider closing costs on both ends. Feels like things are moving now!
Still dealing with frustrations from tenants in 2 apartments. One group has not paid the rent in 2 months. They claim that a tax refund is due on April 3rd (was originally March 26th). On top of all of that, these people are constantly complaining about something with the apartment. Today it was a cabinet that is loose. As far as I'm concerned they have no cause for complaint given all the leeway that Hubby has given them!
Another group of tenants is on a payment plan, but already falling behind. The excuses are amazing: can get rides, paycheck eaten up by child support, etc etc. They are always running around, but never have money for the rent! Luckily we have 5 good, reliable, tenants because these two units would spoil him on the idea of landlording forever (at least they would for me - he has more patience!). Going to court tomorrow to start eviction for these folks!
Saturday, March 10, 2012
Search came up empty today
Hubby went out to look at a few more houses today to see if they had any flipping potential. Saw one that he really liked, but the neighborhood is not the best (and you can't fix location). Going back to the two we saw the other weekend. Planning to put in a bid on Monday.
On the rental front, all March rents received with the exception of two apartments. One of these will be given an eviction notice on Monday, but they swear they will be current when their tax refund comes (heard this story before - from different tenants) - time will tell. The other late group are the ones on the payment plan. The next payment date is Monday. Waiting to see if we actually collect rent or just collect yet another story. So far 5 out of 7 paid!
On the rental front, all March rents received with the exception of two apartments. One of these will be given an eviction notice on Monday, but they swear they will be current when their tax refund comes (heard this story before - from different tenants) - time will tell. The other late group are the ones on the payment plan. The next payment date is Monday. Waiting to see if we actually collect rent or just collect yet another story. So far 5 out of 7 paid!
Friday, March 9, 2012
Frustration over bid process
Found out today that the bidding on this property is restricted to owner-occupied until March 17th, another week! Apparently this happens a lot. I find it hard to believe a lot of first time homebuyers would be interested, but you never know. Anyone who bought it would need a mortgage plus extra money for the renovations. Hubby planning to go out house-hunting again tomorrow to see what else is out there. The housing market seems to be picking up a bit. A few places on his short list are now under agreement (with someone else!).
Wednesday, March 7, 2012
Bid finally submitted!
Hubby finally got a bid submitted for another property to flip today. Didn't yet bid on either of the properties we had seen previously. A hot property came up and he felt that he had to act right away. It is a townhouse in a nice neighborhood. Other properties in the same development sold/listed in the 120K range. The price on this place just dropped to 50K. I didn't see it, but he says it only needs paint and carpet (and plumbing repairs, and some mold renovation and ..... you get the idea!). The bottom line is that the price is cheaper than our first flipping property, the potential sale price is a lot higher, and the cost of repairs needed should be lower. He jumped on it right away and put in a bid for $100 over the asking price. It is still a bank owned property, but we are hoping that putting in a bid at the asking price will allow the bank to move on it right away (on the other properties we were looking at we would have to bid much lower than the asking price and the bank takes forever to approve that). Very exciting turn of events! Can't wait to get started on the renovations!!
On the tenant front, one group has signed a modified lease and hopefully will be back on track soon (hubby put their actual pay days in the lease as rent days). Unfortunately, another tenant asked for a meeting last night to tell hubby that he lost his job. Not really looking good for these folks at all. Luckily the economy is improving and (they claim) a tax refund is coming in shortly. That may buy them a little time to get on their feet, but an eviction notice will have to be sent on Monday, just in case they need to forced to move out of the apartment. It is a shame, but there are two able-bodied adults in this unit. We can't support people who just can't manage to find and hold jobs.
On the tenant front, one group has signed a modified lease and hopefully will be back on track soon (hubby put their actual pay days in the lease as rent days). Unfortunately, another tenant asked for a meeting last night to tell hubby that he lost his job. Not really looking good for these folks at all. Luckily the economy is improving and (they claim) a tax refund is coming in shortly. That may buy them a little time to get on their feet, but an eviction notice will have to be sent on Monday, just in case they need to forced to move out of the apartment. It is a shame, but there are two able-bodied adults in this unit. We can't support people who just can't manage to find and hold jobs.
Sunday, March 4, 2012
Waiting for Tax Refunds
Two apartments full of tenants owe us two months rent now (Dec and Jan - Feb is out of the question - lol!). Both claim to be waiting for their tax refunds to come in and then they will get caught up. We will see. Hubby is ready to take time off from his "day job" to start eviction proceedings if necessary. Some of these people should get creative writing jobs - they always have a story for everything!
Did we miss out on a property
A little concerned that one of the houses we were planning to bid on doesn't appear to be on the market anymore. A little confusing too, because it is bank owned. Maybe (hopefully!) they are changing realtors? The place was empty when we were there, so it doesn't look like the homeowner would be able to suddenly come current on whatever was owed. Our realtor doesn't seem worried but I am a bit frustrated.
Hubby went to sign a lease modification with a couple that still owe over $600 (not counting March's rent). He has all of their paydays for the next six months written into the modification. Eviction notice has already been served and if they miss a payment, he goes to court to have them moved out. Keeping our fingers crossed that this arrangement will allow them to get their act together and become more stable and reliable. I pray for our tenants everyday. Both for their well-being and their financial security.
Hubby went to sign a lease modification with a couple that still owe over $600 (not counting March's rent). He has all of their paydays for the next six months written into the modification. Eviction notice has already been served and if they miss a payment, he goes to court to have them moved out. Keeping our fingers crossed that this arrangement will allow them to get their act together and become more stable and reliable. I pray for our tenants everyday. Both for their well-being and their financial security.
Thursday, March 1, 2012
Late night rent collection
Hubby started this morning at the apartment building with 4 units. Collecting rent from one. They were supposed to have $400, but had only $300. Going back tomorrow to try to collect the rest. The folks leave for work really early so he needs to get there before they leave. Still owe $550. Hubby is probably going to put them on a paymente plan for that ($110 per month for 5 months, plus the usual rent).
If the payment plan goes into effect, only 1 apartment will be behind in this building.
Tonight he is driving to a neighboring town (not the apartment we own) to collect rent. This might bring this tenant fully up to date - yay! This unit also on a payment plan (and extra $50 per month for 6 months).
Truthfully, times are hard and these people seem nice enough and are all working (now anyway!). If they all can get on their feet, maybe we can get regular rent payments. So far 4 out of 7 units are pretty reliable. Still working on getting the other 3 up to speed.
Preparing to put in a bid for two of the houses we saw on Sat (both for flipping). $50,000 each. A little scary in terms of our credit, but exciting to get started on the next phase of the business!
If the payment plan goes into effect, only 1 apartment will be behind in this building.
Tonight he is driving to a neighboring town (not the apartment we own) to collect rent. This might bring this tenant fully up to date - yay! This unit also on a payment plan (and extra $50 per month for 6 months).
Truthfully, times are hard and these people seem nice enough and are all working (now anyway!). If they all can get on their feet, maybe we can get regular rent payments. So far 4 out of 7 units are pretty reliable. Still working on getting the other 3 up to speed.
Preparing to put in a bid for two of the houses we saw on Sat (both for flipping). $50,000 each. A little scary in terms of our credit, but exciting to get started on the next phase of the business!
Tuesday, February 28, 2012
Estimating for Renovations
Just went over some software we are considering buying to help estimate for renovations. It is basically a giant spreadsheet, but has prices for literally every task (as small as replacing a smoke detector). Estimated based on the last small job our contractor did for us and found we were a bit overcharged. That's ok, just did it for practice and as we get better hopefully he will be happy to use our estimates rather than coming up with his own. The contractor seems to estimate by picking random numbers, no formal system.
The spreadsheet is pretty cumbersome, but if it helps keep things organized, it is well worth it for only $65.
Still owed rent on two units and last day of the month is tomorrow. Will continue eviction proceedings for one apartment on Thurs most likely. They've had notice given, next step is court!
The spreadsheet is pretty cumbersome, but if it helps keep things organized, it is well worth it for only $65.
Still owed rent on two units and last day of the month is tomorrow. Will continue eviction proceedings for one apartment on Thurs most likely. They've had notice given, next step is court!
Monday, February 27, 2012
Exciting times- looking for a new property
We spent Saturday driving all over the area with our Realtor looking at potential properties for flipping. We came up with two possibilities. One is very near our house, which will be convenient. It is a complete gut job. People have broken in and stolen the copper pipes and everything. Weirdly the kitchen cabinets and the appliances actually look fine. The walls are a complete mess. We will need to insulate and drywall in some areas, paint everything. A bathroom reno would be a good idea, but it actually has 2 full baths and is 1800 square feet. In a very nice area. If Hubby gets it for cheap (he is thinking of bidding 50K, although it's listed for 77K), and can keep the renovations and other expenses (closing costs, utilities, taxes, etc.) under another 50K he might make a very nice profit on it. It is clearly the ugly duckling in it's neighborhood. The sale price of other houses on the same street run 130-140K, and it has a huge lot for this area (.5 acres).
The second possibility is pretty far away, but the property itself is in great shape. Needs some paint and carpet. Fixtures are a little dated, so we can easily change those out. Very nice back yard. Ok curb appeal, a few flowers would help a lot. The only problem is that there is a power station, with an ugly fence and several big ugly boxes directly across the street. Otherwise it seems like really really nice neighborhood. He is also looking at maybe getting this house for 50K (I think it's listed in the 60s). He can put 10-15K into it and sell it for somewhere in the 90s (hopefully).
One question we have is whether it makes sense to buy both. We need to develop a pipeline for this sort of thing, but don't really have the manpower to do two renovations at once. Maybe we can somehow offset the closing dates. Maybe we won't even get both. Both are bank owned and the bid/purchase process takes a long time in that situation (but you can usually get a much better price).
The second possibility is pretty far away, but the property itself is in great shape. Needs some paint and carpet. Fixtures are a little dated, so we can easily change those out. Very nice back yard. Ok curb appeal, a few flowers would help a lot. The only problem is that there is a power station, with an ugly fence and several big ugly boxes directly across the street. Otherwise it seems like really really nice neighborhood. He is also looking at maybe getting this house for 50K (I think it's listed in the 60s). He can put 10-15K into it and sell it for somewhere in the 90s (hopefully).
One question we have is whether it makes sense to buy both. We need to develop a pipeline for this sort of thing, but don't really have the manpower to do two renovations at once. Maybe we can somehow offset the closing dates. Maybe we won't even get both. Both are bank owned and the bid/purchase process takes a long time in that situation (but you can usually get a much better price).
Thursday, February 16, 2012
Tax Time for us
My husband does the management of everything, but I am in charge of the taxes. Generally having rentals is very beneficial tax-wise. Because of the depreciation, and the expenses you can deduct, often you show a loss on paper rather than a profit.
Of course, my husband is good at this, so we show a profit most years! If you have a "day" job and your income from that is too much, you cannot deduct your losses, but you can carry the loss from year to year.
Hubby keeps track of every income and expense on the computer, and keeps receipts for absolutely everything. One of the weirder things is the vehicle deduction. You can take a mileage deduction for the car when you spend time driving around. We haven't bothered when we had only 1 or 2 properties, but with 7 it is worth it. Now hubby drives around with a series of mileage logs, one for each property!
Of course, my husband is good at this, so we show a profit most years! If you have a "day" job and your income from that is too much, you cannot deduct your losses, but you can carry the loss from year to year.
Hubby keeps track of every income and expense on the computer, and keeps receipts for absolutely everything. One of the weirder things is the vehicle deduction. You can take a mileage deduction for the car when you spend time driving around. We haven't bothered when we had only 1 or 2 properties, but with 7 it is worth it. Now hubby drives around with a series of mileage logs, one for each property!
Tuesday, February 7, 2012
Eviction time and mold problems
Came home today to learn that we have mold issues in one building, and that is going to cost us $2000. Can't mess around with mold however, so we have our handy man working on it already. The rents in this place are really low and the tenants are just not used to a landlord that really fixes things when they break. We continue to hope that they will take this as a good reason to work hard to stay up with their rents. One guy was actually waiting at the apartment at the appointed time on Sat to pay his rent! Says he is trying to save up for a house and that is why they want to live as cheaply as possible now. What a perfect tenant!!!
On the bad news front, another apartment is already 2.5 months behind and it doesn't look real promising. We were supposedly waiting for their tax refund, but they are now ducking calls, etc. Looks like a trip to the courthouse is in order. What a weird process that is. Hubby has to go to courthouse and pay something. A hearing date will be set and the tenants will be served notice. At the hearing, they judge will usually give the tenants another 10 days to pay in full everything they owe. Last time it all worked out (not in 10 days, but over the course of a few months). Let's hope this time it does too. The sad part is that most of these people are really really nice. They just cannot get their lives together.
On the bad news front, another apartment is already 2.5 months behind and it doesn't look real promising. We were supposedly waiting for their tax refund, but they are now ducking calls, etc. Looks like a trip to the courthouse is in order. What a weird process that is. Hubby has to go to courthouse and pay something. A hearing date will be set and the tenants will be served notice. At the hearing, they judge will usually give the tenants another 10 days to pay in full everything they owe. Last time it all worked out (not in 10 days, but over the course of a few months). Let's hope this time it does too. The sad part is that most of these people are really really nice. They just cannot get their lives together.
Monday, January 30, 2012
New tenant already
Hubby met with the brother who was cleaning out apartment with the cats. Says it looks pretty good, and he thinks he already has a tenant for it. An older gentleman who works part-time and gets social security. Some interesting finagling here to make this work. He gives tenants a referral bonus of $50 if the person they refer actually works out (is approved and takes the apartment). One of our longer-term tenants will probably get a referral for this one. The other thing he does is that he works with people on the security deposit. The rent for this place is $500, and the security deposit is $700. The guy will pay $800 to move in and then an additional $100 per month toward the security deposit until it is all paid up. By working with the guy, he'll get someone into the apartment right away (and the guy seems real nice), instead of having it sit empty for a month (lost rent). We'll keep the deposit from the place to cover Jan rent (and will use the extra $200 to give to the brother for cleaning). NO LOST RENT AT ALL - Sweet!
Got tax refund money from one tenant! He is now all caught up until the end of Jan (oops that's tomorrow - lol!). We'll see what happens in Feb! Still waiting for money from the second group that was waiting for their refunds.
Got tax refund money from one tenant! He is now all caught up until the end of Jan (oops that's tomorrow - lol!). We'll see what happens in Feb! Still waiting for money from the second group that was waiting for their refunds.
Thursday, January 26, 2012
Waiting for Tax Refunds
Two apartments full of tenants owe us two months rent now (Dec and Jan - Feb is out of the question - lol!). Both claim to be waiting for their tax refunds to come in and then they will get caught up. We will see. Hubby is ready to take time off from his "day job" to start eviction proceedings if necessary. Some of these people should get creative writing jobs - they always have a story for everything!
Tuesday, January 24, 2012
A new lease agreement
One of the funniest things that we run into over and over again is people who claim that "their paycheck is messed up" and, of course, "they said not to cash it or they said it will be fixed in the next pay period." Once such instance just occurred. This tenant owes us a few hundred dollars in past rent and the lease on the apartment is due for renewal. Hubby had to write an extra $50 payment into lease for the next few months of rent in order to get the situation caught up. The tenant was extremely grateful. Sometimes you have to work with them to keep a tenant who is reasonably good, but gets a little behind. This family keeps the place really really nice and clean. Well worth trying to keep them in the apartment rather than having it go empty for a month or two!
If you are wondering about the cats, the brother is still feeding and taking care of them. No homes have been found yet, they may end up at the SPCA. This sort of thing bothers me a lot, but there is nothing we can do about it. Both the tenants of this place are in jail and not likely to be released for some time. The brother got them to sign a paper relinquishing the lease and letting him clean out the place. Much faster and easier than an eviction proceeding!
If you are wondering about the cats, the brother is still feeding and taking care of them. No homes have been found yet, they may end up at the SPCA. This sort of thing bothers me a lot, but there is nothing we can do about it. Both the tenants of this place are in jail and not likely to be released for some time. The brother got them to sign a paper relinquishing the lease and letting him clean out the place. Much faster and easier than an eviction proceeding!
Friday, January 20, 2012
PayDay!
While eating dinner last night Hubby mentioned that he had texted one of his tenants who owes him some past rent money. She never replied. I asked why he had decided to text her on a random Thursday. He said "she got paid today". LOL. Now we are keeping track of paydays for everyone! But, truthfully, it helps. Some of our tenants have very very poor money management skills. Staying on top of these things allows him to collect the rents, and also "trains" (a terrible word, I know) the tenants to pay their obligations first, before they blow the money on crazy things. Several of his tenants have started out with this type of bad habit, and have, after months or years, actually learned how to manage their money properly. They've improved their credit, and gotten better jobs. Of course, then they sometimes move out - LOL!
Monday, January 16, 2012
New business partnership is formed
Hubby talked to his main handyman/contractor today. Contractor dude called looking for work, to see if we had any. Probably will hire him for some work around our house, but Hubby also spoke with him about a long-term arrangement. Contractor will work 10 hours, 4 days per week doing whatever we need done on rental properties or properties to flip. He will make $1000 per week from Hubby and then can do side jobs on the fifth day of the week. Works well for both parties, we can keep him as a contractor, rather than a regular employee, and he gets a steady income.
Hubby also found a reference to some renovation software that he is going to track down. Should help with estimating and project planning.
The dream of owning the business and working it full-time is getting closer. A little nerve wracking for me, because I'll be the only one with a regular paycheck, but very exciting too!
Hubby also found a reference to some renovation software that he is going to track down. Should help with estimating and project planning.
The dream of owning the business and working it full-time is getting closer. A little nerve wracking for me, because I'll be the only one with a regular paycheck, but very exciting too!
Sunday, January 15, 2012
Home for one kitten found + unexpected bonus
Hooray, one of the abandoned cats has a home now, and the family is actively looking for a home for the other one. I almost worry more about the cats than the people sometimes!
Hubby got one tenant who is 2 months late with rent to sign a paper saying they will be caught up by the end of Jan. Has a job now, so he is cautiously optimistic.
Rent from 4 out of 7 already received, missing 2 and one apartment being cleaned. Not bad for this point in the month! One tenant who paid in Jan is still behind from earlier months, but she will probably get caught up. Her lease renews in Feb and it all has to be paid before we'll sign a new lease.
One of the things you never thing of is the oddball, unexpected bonuses. We have extra storage space in 2 of the 3 building. Came up because I am rearranging some furniture and we have some shelves and a desk that we don't need. Can park in a building until we need again or decide to get rid of them!
Hubby got one tenant who is 2 months late with rent to sign a paper saying they will be caught up by the end of Jan. Has a job now, so he is cautiously optimistic.
Rent from 4 out of 7 already received, missing 2 and one apartment being cleaned. Not bad for this point in the month! One tenant who paid in Jan is still behind from earlier months, but she will probably get caught up. Her lease renews in Feb and it all has to be paid before we'll sign a new lease.
One of the things you never thing of is the oddball, unexpected bonuses. We have extra storage space in 2 of the 3 building. Came up because I am rearranging some furniture and we have some shelves and a desk that we don't need. Can park in a building until we need again or decide to get rid of them!
Saturday, January 14, 2012
3 out of 6 tenants in jail!
Well, we got back from vacation and within the first week learned that 2 more tenants had been arrested! Not sure what happened to one (probably shoplifting or other theft), but the 2nd was arrested during a 4 a.m. raid for dealing heroin out of the apartment!
It turns out the police do NOT notify you when they are about to break into your property. Hubby found out about all of this only because the other tenants in the building told him when he went looking for rents. Of course, hubby took himself down to the police station to figure out what was going on, and they were actually more than willing to tell him. The arresting office actually call our house a day or to later to work on "community relations". Warned us that this happen "a lot" and we should "get used to it." <sigh>
Now BOTH tenants from this apartment are in jail (gee - I wonder what the boyfriend was doing that got him arrested). The place is a mess, and they left 2 cats in the apartment, along with very little catfood and a toxic waste dump for a litterbox. Lucky the woman's brother was on the scene and was trying to figure out what to do. Hubby took one of our old litter boxes and cat litter and food down there (it was a Sunday, no idea if the SPCA would be open, and certainly the cats were not at fault here!). Working with the brother to figure out how to clean the apartment. Will probably pay the brother to get rid of everything, already paying him to take care of the cats until homes can be found! Trying to figure out the eviction proceedings in this situation (the court staff are not always fully helpful, may just move them out without going through the full court procedures).
Oh, and on good news front, the boyfriend of the other jailbird has decided to take over her apartment. This tenant left a young child behind when she was put in jail. Her mom is taking care of the baby, and boyfriend says he was paying the rent on the apartment for her anyway. Did I mention this was the only apartment that gives us rent without the late penalty every month (in this building, anyway, we actually have some wonderful and reliable tenants in other buildings). Needless to say, he is in!
It turns out the police do NOT notify you when they are about to break into your property. Hubby found out about all of this only because the other tenants in the building told him when he went looking for rents. Of course, hubby took himself down to the police station to figure out what was going on, and they were actually more than willing to tell him. The arresting office actually call our house a day or to later to work on "community relations". Warned us that this happen "a lot" and we should "get used to it." <sigh>
Now BOTH tenants from this apartment are in jail (gee - I wonder what the boyfriend was doing that got him arrested). The place is a mess, and they left 2 cats in the apartment, along with very little catfood and a toxic waste dump for a litterbox. Lucky the woman's brother was on the scene and was trying to figure out what to do. Hubby took one of our old litter boxes and cat litter and food down there (it was a Sunday, no idea if the SPCA would be open, and certainly the cats were not at fault here!). Working with the brother to figure out how to clean the apartment. Will probably pay the brother to get rid of everything, already paying him to take care of the cats until homes can be found! Trying to figure out the eviction proceedings in this situation (the court staff are not always fully helpful, may just move them out without going through the full court procedures).
Oh, and on good news front, the boyfriend of the other jailbird has decided to take over her apartment. This tenant left a young child behind when she was put in jail. Her mom is taking care of the baby, and boyfriend says he was paying the rent on the apartment for her anyway. Did I mention this was the only apartment that gives us rent without the late penalty every month (in this building, anyway, we actually have some wonderful and reliable tenants in other buildings). Needless to say, he is in!
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