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.
Showing posts with label real estate investing. Show all posts
Showing posts with label real estate investing. Show all posts
Friday, April 13, 2012
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!
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!
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