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).

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!

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!

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!

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!

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!

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!).

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.

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.

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!