Second house almost done

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!

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.

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!

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!

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.

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!

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.

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!

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.

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!

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.