Recently my husband and I jumped head first in to being REI's and landlords. We've been looking for a couple of years for something to invest in, but he's not a fan of properties which need significant work and we haven't been able to make the numbers work for any properties that even remotely interested us.
In January, a property showed up on Auction.com that seemed like it had potential. We drove by the property to see if it actually might be occupied but could not verify from the curb. After some research, we decided to take a chance and bid. A few things made us extremely wary. First, we could not view the property prior to closing except as a drive by. Second, we would receive a QCD. Third, we had no idea what the situation of the occupant was, who they were, or if we could get them out without a fight. Naïveté occasionally leads to risky choices - so we bid, and lost. Oddly, my husband received a call that evening (which he missed) from Auction.com. Turns out, they may have moved forward with our last offer if he had answered the phone.
A few days later the property showed back up on the website so we bid again, this time allowing for a bid price $1,200 higher than our last max but still below what we lost it for last time. This time we came out as the top bidder. Hooray! Except now we were going to be spending a significant portion of our funds on an occupied property we had never seen and which we would only receive a QCD for. Anxiety sets in.
Six days after closing we posted a 48 hour notice to enter and crossed our fingers and said a prayer. Would the occupant be aggressive? I went home, sat down at the computer, and did the research we should have done while (before) bidding on the property. We contacted the utilities to see what we could find out - all were on and paid up-to-date and one was kind enough to confirm the last name was the same as the previous Owner. We contacted the Real Estate Agent that had listed the property in August of 2014 and discussed the previous Owner and Occupant's personalities. And we found the contact number for the previous owner in case we did not receive a response to our notice to enter.
Turns out, the current occupant is the brother of the previous owner. He's not on lease but we have agreed verbally to keep him in the house (paying what he currently pays his brother) for a couple of months while we line everything up. He has agreed to allow us full access to the house to begin work. I still think we need to get this all in writing.
The condition of the house is, let's say "fair." The original wood floors have been refinished in every room except one (which we will carpet due to asbestos concerns, meaning we thing the flooring in that room might be asbestos based and we don't want to play with it). The furnace was oil, converted to gas at some point, and basically does not work. All of the new windows are missing interior casings and the entire interior could use a new coat of paint. We're going to attempt to salvage all of the existing cabinetry and add a bit more storage in the kitchen. The paint on the exterior needs to be finished and the gutters could use replacing.
We have been renovating our own house (for years) so we plan on completing a majority of the work ourselves.
This process is a bit nerve racking and since it's really our first, I'm sure we'll make a ton of mistakes, hopefully none that make this a money loser for us.
I'll post photos in the next week or two.
Any advice or ideas are welcome!
