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.

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.

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!

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!

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.

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.

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.

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.

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.

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!

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!

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!

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.

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!

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. 

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!