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Mike's Week of Investing (ending 2/20)
Youtube Channel for Before and After Rehab Videos
https://www.youtube.com/channel/UCCc_xpWT498qX5QnJ...
Thought I'd add a link to my youtube videos of all the before and after rehab videos I've done recently on my deals. Sometimes a picture is worth a thousand words. But a video is that much better. Check em out. And then continue on with the blog below. :-)
Forgot to do last week's so we'll jump in and include the early part of this week in here too.
1) TENANTS
No response on the Steger tenants that is way behind on the rent but has a large settlement that should be paid any time now. Not liking the lack of a response. But she was having serious medical issues too. Gonna have to do the 5 day notice to get someone's attention though. I don't like the lack of communication.
Other than that, all quiet on the payment front. Had a couple online payments that didn't go through. One was a bad account number, the other was an account that wouldn't take ach withdrawals. Tenant had to mail a money order.
Lastly, the healthcare company. Still no check. Their PM just emailed me today asking if she could get the keys. I said I still hadn't gotten the check so that would be no.....
She's checking into now. But I have a signed lease with them so I know I'll get my money. Just seems like they're slow starting up with people. They're still paying for February rent though so I'm still happy.
All in all, collections are running fantastic right now. Everybody paid except the "settlement" tenant and thats pretty good out of 32 hosues.
2) REHAB
Pretty slow on the rehab front right now. Demo work still going on at the hoarder house. But not much they can do beyond that without any heat. Gas company said that I should be getting on the schedule in about 3 weeks.
That really puts me in a bind though. Once the heat is on, then I'll need this contractor back doing rehab here. But in 2 or 3 weeks, I'll be closing on 2 more houses. I'm not going to let anything sit though. Got someone else lined up for one of the two other houses I'm closing on.
And I'm trying to speed up the closing on the other closing house so the contractor can get that rehab in before or very soon after the gas is done so once he finished that one, he can roll right back over to the hoarder house.
3) ACQUISITION
Not much going on. I had a short sale offer that was put in about 3 months ago. Bank came back and asked me to refresh the prequal letter and update the contract with the new closing date. Might mean they're getting close to accepting. But with these 3 deals in play, I don't know that I have the ability to take another one down. And I'm not sure I'm really that interested in this house any more to do it given I now have 3 really good ones.
Sometimes, I'll take lesser houses in order to continue to grow if I can't seem to find anything else. But when I'm flush with deals, then i tend to let them go by. The one exception I'd add is that if I can literally steal the house, then I'll find a way to take it down.
There have been a couple houses that were so-so houses but at the price I got them for, were just killer deals. I had so much money left for rehab, that I could make them perfect or near perfect and then they were actually pretty good houses and even better deals.
Lastly, that monee offer that went to best and highest. Again, I never get houses when the offers go to best and highest. My offer is my best and highest. But it had been a couple weeks since I heard anything so I nudged my realtor to check whats going on. The listing agent said there was a higher bidder and the bank gave them a counter. I asked my realtor why I'm not being given the same counter?
If the bank wants us to bid against each other, shouldn't they tell both of us what the number is and see which one accepts first - if at all? Lets say the other offer was 70k (i'm at 68k), and they counter at 72k. Maybe I'd pay the 72k but the other buyer wants more time to think about it. Why not put the number to both of us???
Seems to go against the entire idea of best and highest. My realtor explained the reasoning and my response to her was "Its still nonsense!".
I'm so tired of this best and highest garbage, I've decided to come up with some solution to get past it. Since the banks doing this require 2 bids before they'll even consider an offer, I'm thinking I'm going to have a fellow investor friend put in another bid at 4 or 5k lower than mine. Then the bank can have their two stinkin' bids and go to best and highest, and as long as we were the only ones submitting, then maybe they'll finally give me the deal!
4) FINANCING
And, finally, the financing phase of the blog.
So here we're still in the process of refinancing 3 properties. One is a house I've owned for about 4 years now that I'm trying to pull some equity out of. Doing a HELOC with First Midwest. Appraisal came back a little low (137k) and the bank went from doing 75% LTV to 70% LTV so I'm not going to get out as much as I thought.
On a brighter note, I'm still going to pocket 20k that I can use to pay down some stuff. My rate and the interest only payment option is still going to allow me to lower my payments on at about $150 a month so it turned out ok. Still, the 5% LTV thing kinda took some wind out of the sail as that essentially cost me about 7k in lost cash I could have pulled out. Still, its a nice boost.
As for the other two refi's of recent rehabs that are still under hard money loans, both those appraisals came in. I was already told I was approved for the loans. So just waiting to see where those are at exactly. Put in an email today to get an update but haven't heard back.
One of the toughest things about real estate is always the waiting. Nothing moves fast in this crazy business. Its not even a case of hurry up and wait. Its more like slow down, slow down again, and then wait some more..... :-)
But those two refi's turned out very well. Both appraisals came in on the high side of my range (although my range is typically only 5k - i.e. 135k to 140k, etc). But its still nice to see that my projected appraisal numbers are hitting the mark on most of these and/or are even a bit on the conservative side.
And, lastly, for my good deed of the day - or, since its a weekly blog, good deed of the week, I was able to help out my hvac guy with a heads up on a house that might really work for him.
He met me this weekend at one of the two houses I'm closing on soon. House needs new hvac system. He has a couple of rentals and the hvac shop and is looking to add another house maybe. But he was telling me that he's currently renting a space for his machine shop/hvac company and his landlord is selling the building to the village so he may have to get out.
He had approached her about possibly buying it but there are two buildings on the parcel. The one he's in is the only one he wants (and can afford), the larger one in back is what the village wants. The owner of the buildings said she wasn't going to be able to break up the two buildings so unless he would buy both, she couldn't sell. I think he was looking at something in the 150k range for a max price.
He couldn't do that so he said he was in the process of looking for another building. His fear was that when the village bought the place, they would bump his rent up. He was paying $800 for 1,200 sq ft or so I think.
So when I got home, I was thinking about a house I had been watching that was one town over from where he's at. More centrally located to his work too. The house is a 3/2, 1,200 sq ft house with a 1 car attached garage listed for 90k. But here's the kicker: It has a 1,500 sq ft detached garage that was used as some sort of auto collector showroom. This back garage is super nice. Fireplace, bathroom, etc, etc.
I told him about the house and that if that space is good enough, he could buy the house and rent it out for about 1,100 to 1,200 there. Then the tenants would be paying the mortgage and he'd have a shop for himself that would be rent free.
Best of both worlds.....
He liked the idea and was going to check it out. Not sure what his business needs are so it may or may not work. But that was the good deed for the week.
And if he doesn't take it and the house sits another month or so, I may put in an offer myself. Take the rent and then rent the back garage out separately for $500/month and make out like a bandit. :-)
Thats it for my week so far.
btw: As I'm writing this, the healthcare company just called. They want to move furniture into the house. I told them I still don't have a check. They asked if they had the check overnighted, would I be willing to give them the keys. YEP!
There we go. Should be getting paid tomorrow finally. And the money pit house is officially making money now. :-)
Comments (1)
LOL...that healthcare company! You can't make that stuff up but it does not surprise me. I bet money the request for payment is sitting on someones desk at their office. Typical...
That bank thing confuses me...why would they drag it out like that? I don't get it. It must be that hurry up and wait thing. No wonder you work so many propertie at once. Sounds like you spend more time waiting than you do working combined!
Congrats on a great week thus far!
Jonathan Key, over 9 years ago