All Forum Posts by: Robin Grimes

I agree with Alex, the fiberglass did not itch for me at all. I did use a white painters suit and paper mask on both jobs. Came out clean on the fiberglass job and filthy on the cellulose job.

In Texas you could take him to Small Claims court for a $78 court fee. Which the landlord would pay if he loses. Find out how to do a small claim court filing in NY. That is your best bet to get your money back. Leases can start and end on any date and ONLY the lease contains the terms. "Standard policy" means nothing in court.

Hi Will,

Here is my experience with FNMA and Auction.com

I bought a FannieMae property through Auction.com in June 2011. (Spring, Tx)

Here's how it went.

1. Saw a property on Homepath.com when it was first listed. Asking 89.9K. I generally watch a potential property on Homepath for the price drops, which occur every 30 days.
2. Went to "under contract" before the "first view" period ended.
3. Few weeks later it was "back on market" at 84.9K.
4. Still to much so I kept watch. Next time I check it's at 79.9 so I have my agent contact Listing agent to make offer.
5. OOPS, we're told that property had been contracted to sell through Auction.com. I watched the auction but did not participate. There was a 'winning' bid but I don't know the amt. Homepath.com changes status to 'Under contract'.
6. Few weeks later I'm on Homepath and there is the property again, it's "back on market" again, for 79.9 . I check the MLS and it's NOT on MLS. That is very strange.
7. I call listing agent and am told that he has no idea, it's still with Auction.com and he thought it was sold.
8. After many emails and calls to Auction.com I get a manager who tells me that the winning bidder backed out, losing his deposit.

HERE IS KICKER:
9. Auction.com manager tells me that they still have property consignment, but that the bank was not going to auction it again. The manager told me that if I would submit an offer, he would submit to bank as a "winning bid". There is no negotiating, bank will just accept or reject.
10. I submit offer of 59.3k. (Price: I'm using Homepath Investor financing with 15% down so this is the lowest bid possible to keep loan over 50K. I had to wire a deposit to some law firm in Dallas.
11. Listed my agent on offer, she only got a 1% commission per Auction.com rules. I try to keep my team members happy.
12. Bank accepted offer after about 5 days and we went to closing a few weeks later.

4/2.5/2
2100sf in very nice older neighborhood.
Repairs: $9K
Reasonable ARV: $110k
Currently rented at $1275

Summary:
Auction.com is NOT a real auction, despite their name. They just generate offers that the bank can accept/reject. Expect the bank to accept somewhere around 70%+/- of what they are asking on Homepath. Whether it is through Auction.com or not.

Robin

NYTimes has an interesting calculator about when to rent vs buy.
http://www.nytimes.com/interactive/business/buy-rent-calculator.html

It’s 105 degrees and dry, dry, dry in Houston, Texas. One of my tenants called to say the A/C was not keeping up. It was 81 degrees in the house with the A/C running 24/7. This is an older home built in 78’ so the insulation has settled down to 4-5 inches. Something I should have checked during my rehab but didn’t. Another lesson added to my already long list. So it’s off to the store to buy some insulation.
The best solution is blown insulation, since it’s very easy to install. Blown insulation comes in two basic options. Fiberglass (pink) or Cellulose (brown). I choose the pink insulation because the blower for it was available. After taking a best guess at the # of bags (12), loaded it all up and called the tenant to ask if I could arrive at 7am to add the insulation. I also bought a paper painter’s suit and dust mask. Already had goggles.
It’s a TWO MAN job, one to feed the hopper and one to work the hose in the attic. With a helper the job went very smoothly and I was done with the two attic areas in about an hour. Total cost $365. Not sure if I can get a tax credit for the insulation of rentals or not, will have to ask my CPA.
Fast forward 2 weeks: While checking in with Tenant #2 I ask how their A/C is keeping up. Tenant said that two rooms upstairs are always hot. So I inspect and again find settled insulation. Off to the hardware store again, only this time, only the cellulose blower is available. So I purchase the brown cellulose insulation, load up the blower and go to tenant #2’s house. This is where the nightmare starts. I was expecting the same experience I had with the fiberglass job, an hour in a hot attic. Instead I spent 2+ hours in a dust filled torture chamber. The cellulose blower would not feed a bale, each bale had to be pre-broken up or the blower would not chop it. There was more dust coming out of the hose than insulation. Within a minute of starting the job, the dust was so thick I could not see more than a few feet. So we would run a few bales, stop and wait for the dust to settle, and then start again.
The cost of the cellulose was a little cheaper but I’ll never do cellulose again, it was a horrible experience. So in my, now experienced, opinion: Fiberglass blows very well and cellulose just sucks.

FNMA list their REO on HomePath.com

What is the attic insulation like in the House? If it's an older home, blown in insulation is a fairly cheap way to increase the efficiency of heating and cooling.

I just finished rehab and leasing of my second rental two weeks ago. I've purchased both through FNMA's HomePath program. For investors they require 15% down and no appraisal. I'm buying in my local market of Spring Texas, in working class neighborhoods, where the prices are fairly stable.
To answer your questions:
1. It took me 6 months to locate, contract and close the second deal. Namely because I was waiting for the FNMA to drop the price on this house. #3 will take longer since I need to rebuild cash reserves AND since lenders will NOT consider my rental income as income until I've been a landlord on two tax returns. With three mtg payments now, I need the rental income to offset for DTI. (I'm working a day job that will only support the 3 mortgages. home+2x rentals)
2. HomePath program funding.
3. I learned from my mistakes on the first house:
- Don't show it before repairs are done.
- Don't run over to show the house every time you get a call.
- Many applicants are skilled liars.
- Inspectors don't (can't) catch everything.
AND made all new mistakes on the second house.
- Didn't closely inspect the fireplace.
- Didn't find the raccoon living in the fireplace till 3 days into rehab.
- Plus a dozen other mistakes.

Importantly I've learned that I learn by doing more than by reading. More importantly I've learn that I LOVE rehabbing a house and look forward to the day that I can do this full time.

R.

Thanks All, I'll use the "vacates" term. No permits needed in this area and the HOA does allow sheds. I added the insurance part since we live in a hurricane area and I don't want the tenant claiming his shed on my property insurance. Liability coverage would be between my and insurance company, no sense in giving the tenant ideas. :^)

Here are the skills and lessons I learned during the rehab of my second rental.
1. If the property has been vacant for over a year and still has fleas, there may be a raccoon living up inside the fireplace. (I can now add “roping and releasing a raccoon†to my list of skills)
2. Just pay the $80 to have the fleas professionally exterminated. I spent $50 plus trying foggers and sprays with no success. Should have just hired the professional to start with.
3. If you putting in Laminate flooring for the first time, laying 200 sq ft before realizing you forgot the moisture barrier does not make a productive day. (Yes, I pulled it up and started over.)
4. DO NOT put Laminate on the stairs. I did it and it turned out beautiful. But it took a huge amount of material. The step is about 9 inches wide and the material is 7.5 inches. So I had to cut 1.5 inch strips, with the locking groove, off full boards. Rest of board was trash since it didn’t have the groove.
5. Laminate suppliers quote the price of transitions by the foot but only sell 7.5ft sticks and transition pieces are very expensive.
6. When you turn the water on for the first time…. Don’t walk, RUN inside and check everywhere for leaks or open valves. I found the washer connections wide open after turning on the water. I’ll check those before turning it on next time.
7. Wondering why prior owners took oven racks with them, won’t solve the problem. I learned oven racks are not standardized like the coils on top. You have to order oven racks based on the model and they cost $82.50 each. (I decided one rack was plenty, who really uses both racks anyway.)
8. If you’re very, very nice to the secretary of the Home Owners Association, she will rush through an approval so your roofers can start on the day they are scheduled.
9. You can advertise anything for free on craigslist and there will be multiple people who want it. (really old Jacuzzi in back yard and ugly front door with many coats of paint)
Rental #2 is complete and tenants are moved in.

So what are some of the Rehab lessons you've learned?