Mike's Week of Investing (Ending 3/13/15)

Youtube Channel for Before and After Rehab Videos
Don't want to add it to the blog since, apparently, BP frowns on the outside links. But if you're interested, you can catch the link to my before and after videos (including the before videos of the houses I mention below), you can check the link out on my profile.

btw: I never sell anything. So I'm not showing the videos for any personal gain here. Just thought it makes the stories a little more interesting when you can see the houses I'm referring to. :-)

Mike's Week of Investing- (ending 3/13)

1) TENANTS

Quick update on my tenant stuff.

Gotta fix a roof on one house. Contractor quoted me 1k to fix the roof. Seemed pretty high. There was an addition on this house by the previous owner that was apparently not done right. Roof needs to be replaced in one large area. Still, I thought 1k was way too high. Got them down to $650.

Hopefully, this takes care of the problem. Actually had someout there two separate occasions and they got paid to do nothing apparently since their fix didn't do it.

In terms of payment, we're pretty good right now. Still waiting on the settlement tenant to come up with the money. But its finally getting closer. She is processing some settlement loan and I have a copy of the response from the lender so I know its almost there. We'll see.

Aside from that, there was one tenant that looked like they were having some issues and were going to be moving. But they just made the payment. The wife got a bonus and a nice salary bump and now they're all excited they can stay. And I'm excited I won't have any turnover again this month.

We're on a nice run of 3 straight months without any turnover. And its only been 2 turnovers in the past 8 or so months. so out of 32 houses, thats pretty good.

Guess that tells me I'm probably a little under market on my rents (which is where I like to be) and my houses are rehabbed right. When I first started doing this and I was listening to my brother in law (who was telling me to fix/replace as little as possible), my occupancy is way better. I think just a little over 97% or so.....

2) REHAB

Not much going on here still. Waiting on the gas company to install the gas line on the hoarder house (stratford) so I can get the heat on. Once I do that, I should be able to get the junk cleaned out of the crawl (which is currently in some water that has frozen solid and "locked" the garbage with it).

The peotone closing went well on wednesday (in and out in 5 minutes even) and the hvac guy was there first thing thursday morning and we got the gas on and he's removing the boiler system and replacing with a new hvac system.

Roofers were out for quotes so will try getting that done in the next week or so. And the contractor is set to start the rehab on wednesday once we know we'll have heat.

In the meantime, nicor finally called and said they'd be installing the gas line at stratford next week. So once we get that in, should be able to dethaw that gook in the crawl and get everything out. Then on to the floors. Gonna be a nice push coming soon to get things moving out there finally.

3) ACQUISITION

So, we're closing on the Monee house on the 20th. A different contractor is ready to go on that one. And that other HUD deal I got (see last week's blog) should be closing in the next 2 or 3 weeks as well. That should be mostly cosmetic too - which helps.

Then I also go another house under contract. This was the hubzu house I was looking at (again, see last week's blog) where I had put in a bid of 67k and was out bid. But the lender didn't accept the other bidder's offer and countered with a best and highest and said the min bid was 70k. Apparently, the other bidder dropped out because I offered 70k and I got it for 70k.

Should be a solid bread and butter deal for me. Currently a 3/1.5/1,450 sq ft with a nice size detached garage and a good size back yard. But I'm going to convert to a 4/1.5 by moving the exterior door to the kitchen.

Some numbers:
Looking like an 18k rehab. Purchase was 73k. So all in at 91k. Should appraise out between 135k and 138k and should rent out around 1350 or so with a PITI of around 850/mo to 900/mo. Gross profit of around 450 to 500/mo. Bread and butter for me anyway. I love those size houses. Big enough to have some space and get a decent rent. But not too big where the rents are too high or the rehab effort is too much.

4) FINANCING

Believe it or not, those two refi's are still ongoing. I have no clue what is taking the bank this long. They got the approval on the loan before they ordered the appraisals. They've had the appraisals for 3 weeks now. Normally, with a true portfolio lender, this would be done. But this lender is a bit of a hybrid with amort over 30 years and they're letting me do cash out refi's at 75% LTV so I don't want to rock the boat too much.

But i have no idea why its taking this long. They literally spent an entire week delay because my insurance company took that long to send over a revised insurance policy showing them as the insured.

I tried calling and leaving a vmail last night but still haven't heard from the loan processor. Again, don't want to rock the boat too much but I kinda need to know whats going on. Sometimes, these underwriters or loan processors will simply drop the ball so its always good to follow up.

And thats about it for the week.

Update: That beecher house I recommended to my hvac guy just dropped the price another 10k. Its now at 80k. I went and looked at it from the outside (and thru the windows). House is in great shape. And that 1700 sq ft garage in the back looks better than most houses! But I just don't know if I can make the numbers work even I can get it for cheap. The thing is assessed at over 200k so the taxes are 7k a year / $600 a month!

The house itself is only a 3/2, 1,200 sq ft house. Does have a basement. But I'm guessing I can only get 1250/mo for it. I was toying with the idea of renting that back garage out separately for say 500. If I could do that, then its a no brainer- even with the taxes. Or I could risk it and hope I can get the taxes re-assessed to something reasonable. Say, 140k assessment so my taxes are 4,500 or so?

Even then, unless I can rent that back garage out (and figure out a way to separate the utilities from the house and the garage) OR I can get a premium for the house because of the garage, I just don't know if the numbers make sense there.

Still, it would be a neat house to have where there's a 1700 sq ft garage on the house. But considering the house itself is only 1,200, thats a tough order to overcome I think......