Mike's Week of Investing- (ending 3/20)

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.

Mike's Week of Investing- (ending 3/20)

1) TENANTS

Quick update on my tenant stuff.

Roof was fixed at the bourbonnais house. No more leaks.

Nothing new on the payment front. Still at 31 out of the 32 paid with the settlement tenant still not getting their payment. I've let that go way too long now. But it is what it is. Its kind of reached the point where they're not really working too hard to pay the rent and they're just coasting on the fact they're getting this settlement. I did give them the 5 day notice a couple weeks ago so now I think I have no choice but to file the eviction. Maybe that will get them to pay up or get the pre-settlement loan.

2) REHAB

Now we're starting to move on the rehab.

HOARDER HOUSE (STRATFORD)

What do you know. Gas company finally got the gas line in. Weather warmed up. Water that was ice in the crawl melted. Got my contractor to get the water pumped out and now they're going to get all the garbage out of the crawl. HVAC contractor got over there to connect the gas (gas company only runs it to meter but homeowner has to connect it to house). And he got the hvac working right away. Figured that might be a problem but got lucky.....

Met with a landscaper over there thursday night. Landscaper also does rehab so after the meeting I took him over to Osage to get a sense of his pricing on rehab. Gonna have him do that one now.

Anyway, we walked the outside of the property. Bush removal. Need to add a drain the length of the right side of the house to keep the water away. Also going to add dirt around the back and side of the house to keep the water draining away and trench in the gutters.

Assumed that water in the crawl was from drainage. That may not be the case. As we were out there, the neighbor came over and told us how bad the previous owner was. Had some mental problems (he was a hoarder so thats to be expected). But she said it had water because it had a burst pipe. Thats actually a good thing. Better that it came from inside than outside.

Then she shared that there were 3 racoons that had taken up residence in the chimney. Thats not so good. Last time I bought a house with racoons, I got dinged about $850 to have them come and set traps and add gutter guards. The landscaper shared that he had that happen to one of his rentals and he bought a trap from Farm and Fleet and threw some snickers in there. Problem solved.

I'm paying the money..... Last thing I want to do is transport a trap of some cagey racoon. Recipe for disaster.

PEOTONE HOUSE

Work is moving along pretty good on this one. Thought I had to replace the roof but roofing contractor said it was relatively new and there was no need to replace the roof. HVAC and install were installed. Demo was done. Plumber is done - although the plumber found there was a lot of 3/8 copper in there and the water pressure was not very good. He replaced some of the 3/8 with 3/4 to address the flow and now we're good to go.

Contractor is working on flooring.

Got a nice tip from a fellow investor and BP'er about the Lowes discounting. I was using a lowes card to get 5% off all my orders. But they told me if you have a contractor's card, you can get bigger discounts. Sure enough, I got 10% off just for signing up for the contractor's card. Spent 4,400 on flooring and bathtub and shower tile for two surrounds. Got a 440 discount instead of 220.

And I believe I could have asked for some special discount and if you're over 2,500 total, you can get over 10%..... Was in too big a hurry this morning to do that though. But I was thrilled with the extra 220 I got off.

But everbody is moving along pretty good right now.

3) ACQUISITION

Closed on the Monee house today. Officially makes it 35 owned with 2 under contract left.

Have the hvac guy going out there this weekend to get the furnace going. Meeting a new contractor out there monday morning at 8 to go thru the list and have him start. Overall, pricing sounded ok and he seemed like he knew his stuff. We'll turn him loose and find out real quick. :-)

Put in an offer on the beecher house with the 1700 sq ft garage.

Its a 1,200 sq ft house on almost a full acre lot in town (basically a regular lot and then it has an open space lot next to it).

List price is 79,900. I came in at 68k. Figured 15% would be enough given its a freddie mac house and had been sitting for 4 months plus it had 3 or 4 price drops. They countered with a discount of $900. My realtor was told they had no inventory so they were trying to get every penny out of their houses. Asked me to put in my offer and tell them it was my best and highest. I told my realtor to submit the same number and add "best and highest".

I might come up to 72k (10% off the list) but thats my max. The house didn't need much work at all. But the taxes are just crazy so the numbers won't work that well as a rental unless I find someone that really wants to pay a premium for the 1700 sq ft garage (which was so tricked out it was silly) or if I separated all the utilities and could rent the garage out separately.

Also went in on the bidding on an auction.com house this week. Great house. Built in 06. I had looked at it about a week ago. Bid was 65k. My max was about 100k all in as it needed about 10k in rehab. I was even willing to come out of pocket more on this one.

I jumped the bid to my max bid (95k) with about 20 minutes left in the auction. I was hoping to make the existing bidder think I was serious. No luck, they bumped it 2,500. Too much. Then I watched as someone else jumped in. The two of em spent 25 minutes bumping the bids up by $100 a pop. I'm watching this and just wondering why. They'd even let the time go all way down to a couple of seconds and then bid it up $100. I'm like man up. Do it right away OR bump it by 1k.

House went to 103k or so and finally gave up. Didn't meet reserve though and its back on auction.com today. Could have been the site bidding itself up to get to the reserve. But still too high for me.

Outside of that, have a couple of hud houses I'm watching and bidding on and watching listings every day to see if anything has a dramatic reduction that might be worth checking on. Otherwise, these 3 that we have and 2 under contract are it.

re: Osage

Was at the closing today for monee house. Asked how the closing was coming along for the osage house. Title company rep said they were still waiting on the payoff of the water bill. I said payoff of water bill? its a well..... Asked if I was sure and said that was how it was listed. Realtor confirmed. Closing got scheduled for the april 3. I could have done it a couple days earlier, but the contractor that I just met was going to be on vacation so I figured I'd push it back a little until they got back.

Still, its always a good idea to check on some of these companies to see whats going on. Otherwise, things may just be sitting for no reason. If you don't follow up, they don't. Although I will say I have one of the best title company reps I've ever worked with. They have made doing these deals so much easier, its silly.

re: Edwin - hubzu house

Here again, another title company snag. This time, it was my title company that found the error. Apparently, the seller (the bank) never recorded the sheriff sale deed on this property. So we can't close. I then contacted my hubzu rep. They had no clue what I was talking about. They literally referred me to my title company and said they could help.

I then called him direct and explained the situation. My title company can't do anything about getting the seller's deed recorded. And we can't close because the seller doesn't have clear title. He then said for me to send him an email. I said I sent one yesterday and he didn't respond. He asked me to add the property id this time. So apparently, they can't read any emails if the property id isn't on it.

I sent the email again with a property id. Still haven't heard from him. Then I tracked down a listing agent from my previous hubzu house I got. She tracked down the listing agent for this property and sent me their name and phone number. Phone number was wrong. I tracked down the listing agent's number based on their name. Left a vmail. Still haven't heard anything yet though. But somebody is getting yelled out real soon if I can't get someone from hubzu, altisource or the listing agent's company to give me a straight answer......

Just some more of the nonsense that we have to do if we're going to take down deals. Can make it real easy to drag out a closing months upon months (I once had a contract extended for just over 3 months because of an unpaid water bill the seller refused to pay).

4) FINANCING

Finally. Got the green light on the closing for those two cash out refi's. Set for this thursday. It'll feel good to get those two wrapped up. And to pocket the 30k or so I'll get out of the refi's.

Soon enough, I'll need to start working on the refi's of these 5 other houses. I think I'm going to try to do 2 at a time though so that the banks I take these to can do my file once and approve 2 loans. The other lenders are much quicker than this one. But again, this one lets me amortize over 30 years and did cash out refi at 75% LTV. So I can understand the lengthier paperwork process. That being said, it did get a bit a crazy.

Lastly, it seems like the real estate market is picking up quite a bit out here. Title company closer was absolutely swamped. And my realtor said they just spend the entire day yesterday from morning til 7pm with clients doing showings. So I think the pent up demand might finally be coming out now that the cold weather has gone away.

Hopefully, this wasn't the last big run for me. If it is, at least I won't look back and regret missing out on this market. Was doing some figuring and went back and added up how I got my houses. 19 houses in first 6 or 7 years. Next 18 months since, I will have added 18 more. Thats a crazy pace.