Calls
I received two calls yesterday from my bandit signs. I was wondering if I was going to get any at all as it was getting near 3:00pm. I received the first call shortly after 3:00pm. It was a lady who said her mother needed to sell her house, because she needed to take care of her mother in another city. My adrenaline was pumping, but I soon learned she wasn't motivatred it all. While talking to her, she said her mother has had the house listed for 30 days with no nibbles. She said the house was listed for $99,900, and her mother was hard-pressed to go down. I told her I doubt the price would work for me, and also told her since it was listed, her mother would have to pay the Realtor® fees as well. But I told her I would run some numbers anyway and get back with her. I could just tell in her voice and what she relayed to me that this wasn't going to be a deal. After hanging up, I went to the online courthouse records to get some info on the deed and if there were any judgements on the owner or her property. I found out she bought the property in early 2004 via HUD for $58,000, which I thought was interesting. I didn't find any judgements, so the owner seems to be in good shape. I also ran comps, and figured the house's listing price is EXACTLY what the house would comp out at. I called the lady back and told her if I were to offer all-cash, I could only pay her $65,000 at best. However, I could offer her more, but her mother would have to be willing to take back a second. She said that her mother wanted to sell the property and didn't want any financial attachments to it, so that wouldn't work out either. I sort of figured this was going to be how it played out, since she didn't sound motivated and didn't have any real urgency. I thanked the lady for her time and asked her to keep me in mind if her mother wanted to make a deal in the future.
It's interesting, but I got this sixth sense not one minute into the initial call that this was not going to be a deal. There just didn't seem to be any motivation or urgency in the what the lady said or, more importantly, how she talked. Oh well - the majority of calls will be like this, so I chalked it up to being one more call closer to "the" call.
I received the second call at around 5:30pm. I had relatives over at the time, and switched my phone to "quiet" mode, so I missed the call altogether. I looked at my phone around 5:45pm and noticed a missed call with a voicemail message. So, I listened to the message. I could instantly tell it was an elderly man. He was VERY brief and only gave his name and the address of the property (which is all I really needed anyway). He said for me to call him back between 12-1pm ONLY. Very strange. I immediately figure this will not be a deal either as he didn't want me to call him back NOW, but I ran some numbers anyway. It turns out he bought the property in 1988 for $75,000. Tax records show it was assessed this year at $159,000. I did a quick amortization, and figure he still owes around $57,000 on the original loan, since courthouse records didn't show any record of release (i.e., refinance). Comps were a little hard to get since most of the houses around the neighborhood are newer homes (<10 years old) and this property was built in 1979. It's almost 2,000sf and sits on a 1 acre lot. I figure the assessed value is close to FMV or a little higher. I figure the most I'd offer him all-cash would be $100k, but I'll need to find out what type of motivation and sense of urgency he has. He could very well be another "retail price only" seller.
Tenants
I received the move-in condition form from my tenants in the mail yesterday. After looking it over, I kind of agree with their assessment. Most of the problems are stains in the carpet in various places around the house. What really surprised me, though, was they included the rent check for August in the letter! It isn't due until the 3rd of each month, so I thought this was a very pleasant surprise. I hope they continue paying like this. :-)
Sunday, July 31, 2005
Saturday, July 30, 2005
Odds-n-Ends
Bandit Signs
I got up at 5:00am this morning and put out eight bandit signs in my farm area. The good thing about my farm area is that there are very few major arteries in-and-out of the general area, so I can put up signs in the "funnels" leading in-and-out. Hopefully, I'll get some leads (or at least some calls).
Possible REO
I found an REO property located not too far from where I live yesterday. On the way home from work, I swung by it to see what it looked like. It appeared to be in "fair" condition. The information was vague, but upon visual inspection, it appears to be a 3/2 SFR with about 1500-2000sf. It was built in 1974, though, so I'm sure it'll need some repairs. It was purchased in 1999 for $159k, and the bank has it listed for $134k. It was tax assessed this year at $214k, so that alone tells me there's significant equity in the deal. Even so, I emailed the listing agent and asked if there were any known problems and/or any title issues. I also asked him if the bank would take $85k for it "as-is", just to see what happens.
The property itself isn't all the great, however, it sits on over 2 acres of land in a growing section. It also has a huge outbuilding/workshop on the property. And, according to the plat maps, the land is already subdivided into four sections. Therefore, I could buy it, sell the property and the land the property sits on, and still hold another 2-3 sections, which I can either develop on myself or sell individually (or in a package).
If it turns out the bank will unload for a cheap price, I may make a call to the zoning board to see if I can convert it from residential to multi-family commerical, and see what options I have for putting a several duplexes, 4-plexes, or 8-plexes there. Judging by the homes in the immediate area and the crap the owners have on their land, I'm thinking it's probably zoned unrestricted right now.
I got up at 5:00am this morning and put out eight bandit signs in my farm area. The good thing about my farm area is that there are very few major arteries in-and-out of the general area, so I can put up signs in the "funnels" leading in-and-out. Hopefully, I'll get some leads (or at least some calls).
Possible REO
I found an REO property located not too far from where I live yesterday. On the way home from work, I swung by it to see what it looked like. It appeared to be in "fair" condition. The information was vague, but upon visual inspection, it appears to be a 3/2 SFR with about 1500-2000sf. It was built in 1974, though, so I'm sure it'll need some repairs. It was purchased in 1999 for $159k, and the bank has it listed for $134k. It was tax assessed this year at $214k, so that alone tells me there's significant equity in the deal. Even so, I emailed the listing agent and asked if there were any known problems and/or any title issues. I also asked him if the bank would take $85k for it "as-is", just to see what happens.
The property itself isn't all the great, however, it sits on over 2 acres of land in a growing section. It also has a huge outbuilding/workshop on the property. And, according to the plat maps, the land is already subdivided into four sections. Therefore, I could buy it, sell the property and the land the property sits on, and still hold another 2-3 sections, which I can either develop on myself or sell individually (or in a package).
If it turns out the bank will unload for a cheap price, I may make a call to the zoning board to see if I can convert it from residential to multi-family commerical, and see what options I have for putting a several duplexes, 4-plexes, or 8-plexes there. Judging by the homes in the immediate area and the crap the owners have on their land, I'm thinking it's probably zoned unrestricted right now.
Friday, July 29, 2005
Auction
A local investor and I have been trading emails the last month or so on a 4-plex in a rural town in the area. We both thought it would be a good investment, but it requires a lot of elbow grease to get up-to-par. Here's a picture of it:
It turns out the bank decided to put it up for auction. It was originally listed at $129,900, and then reduced to $99,900.
Having never gone to a an auction - period - I wasn't sure what to expect. I got there about 7:25pm and met up with the other investor. The auction started around 7:30-7:35pm. I was only there for about 30 mins, but in that short amount of time (minus 5-6 minutes for a person to explain the terms and conditions of the auction), the auctioneer managed to move NINE properties. When I left at around 8:00pm, there were still 5-6 properties left, but I had seen enough.
The 4-plex was the 5th property to be auctioned. I thought at best the place was worth around $75-80k, since each unit needed at least $5k of work EACH. It ended up going for $86k.
There were other properties in various shapes, locations, types that went for a lot less than I thought they were worth. One in particular was a 2,754sf, 4/2.5, SFR in a nice area and in pretty good shape from what I could tell that went for $102,500. Tax records show it was assessed this year at $162k, so that winner got a good deal. The nice thing about these types of auctions (unlike tax sales) is that the winner has 30 days to pay the balance. The minimum amount they had to pay at the time of the sale was $2,500 or 10% - whichever was greater.
Definately some good bargains to be had at these auctions.
It turns out the bank decided to put it up for auction. It was originally listed at $129,900, and then reduced to $99,900.
Having never gone to a an auction - period - I wasn't sure what to expect. I got there about 7:25pm and met up with the other investor. The auction started around 7:30-7:35pm. I was only there for about 30 mins, but in that short amount of time (minus 5-6 minutes for a person to explain the terms and conditions of the auction), the auctioneer managed to move NINE properties. When I left at around 8:00pm, there were still 5-6 properties left, but I had seen enough.
The 4-plex was the 5th property to be auctioned. I thought at best the place was worth around $75-80k, since each unit needed at least $5k of work EACH. It ended up going for $86k.
There were other properties in various shapes, locations, types that went for a lot less than I thought they were worth. One in particular was a 2,754sf, 4/2.5, SFR in a nice area and in pretty good shape from what I could tell that went for $102,500. Tax records show it was assessed this year at $162k, so that winner got a good deal. The nice thing about these types of auctions (unlike tax sales) is that the winner has 30 days to pay the balance. The minimum amount they had to pay at the time of the sale was $2,500 or 10% - whichever was greater.
Definately some good bargains to be had at these auctions.
Thursday, July 28, 2005
New Marketing Strategy
Okay, I've used bandit signs, I've used magnetic car signs, and I've used personal letters to a select group of people. I admit I haven't been as assertive in any of these approaches as I should be, but I thought I would have gotten at least one deal. To date, all I've gotten were a few callers who were upside-down on their properties. So, to use Emeril Legasse's quote, it's time to kick it up a notch.
I've been doing some research the last few days, and stumbled across a very well written article on CREOnline about direct mail marketing using postcards. I found some local mailing shops in the area that specialize in the complete soup-to-nuts direct mail system. They handle all the U.S. ostal Service intervention, plus do all the printing and mailing for you. The only time in the line I'll probably interject my services will be when it comes to the actual mailing lists. According to the article, the cheapest place to get reliable address data is from Melissa Data. When calling around these places, I'll need to see if they can offer the mailing lists for a cheaper price.
The article in question mentions HUGE mail-outs (i.e., 5,000-10,000, or more, at a time). While my farm area certainly has that many people, I want to target sections of the area first, and then stage in subsequent sections. When the area is covered, I'll repeat the process. I'm thinking probably a 2-4 months spread in any one area. So for 3 month intervals at about 2,500 people per area for ~$0.16/each, I'm looking at around $1,600/yr (or roughly $130/mo) for this campaign - not counting other overhead. But I figure if I get one deal out of those 10,000+ mailings, I've more than paid for the service.
I've been doing some research the last few days, and stumbled across a very well written article on CREOnline about direct mail marketing using postcards. I found some local mailing shops in the area that specialize in the complete soup-to-nuts direct mail system. They handle all the U.S. ostal Service intervention, plus do all the printing and mailing for you. The only time in the line I'll probably interject my services will be when it comes to the actual mailing lists. According to the article, the cheapest place to get reliable address data is from Melissa Data. When calling around these places, I'll need to see if they can offer the mailing lists for a cheaper price.
The article in question mentions HUGE mail-outs (i.e., 5,000-10,000, or more, at a time). While my farm area certainly has that many people, I want to target sections of the area first, and then stage in subsequent sections. When the area is covered, I'll repeat the process. I'm thinking probably a 2-4 months spread in any one area. So for 3 month intervals at about 2,500 people per area for ~$0.16/each, I'm looking at around $1,600/yr (or roughly $130/mo) for this campaign - not counting other overhead. But I figure if I get one deal out of those 10,000+ mailings, I've more than paid for the service.
Wednesday, July 27, 2005
Strange Lender Requests
I never understood why lenders ask such wierd questions. I'm in the midst of my refi, and my broker sent me an email saying the lender wanted a letter of explanation for the following ...
1. Date House #1 was listed for sale. Date House #1 was listed for lease. Date when House #1 was leased. Date when House #1 was pulled from the MLS.
2. Copy of the lease agreement. (Okay, this I can understand.)
3. Why I sometimes use my full middle name, why I sometimes use only my middle initial, and why I sometimes don't use either in correspondances. (WTH?!?!?)
4. Who made inquiries on my credit report in the last 90 days. (Hmmmm. Probably people associated with my PREVIOUS loans on the property, you think?)
GEESH!
On a similar note ... I went by my broker's office yesterday after work to drop off a check for the appraisal done earlier this month. When my wife and I met my broker back on July 7th, he said he would try to get the appraisar to lower the price, since it was just appraised a few months ago by them for the first loans. Well, between then and a few days ago, my broker said the guy wouldn't budge on his fee. Reluctantly, my broker agreed to pitch in $100 of his own money to pay for the appraisal, which was a nice geture. (Of course, for all I know, he did got it reduced by $100, and is making himself look like a Saint.)
I was going to call the tenants yesterday to touch base with how the utility situation went (or is going). My wife suggested that it would probably be best if I didn't call. She said if they had any problems, they have our number (which is true). It's now noon on Wednesday, and I haven't heard anymore from them, so I'm assuming the gas was turned on without any problems.
1. Date House #1 was listed for sale. Date House #1 was listed for lease. Date when House #1 was leased. Date when House #1 was pulled from the MLS.
2. Copy of the lease agreement. (Okay, this I can understand.)
3. Why I sometimes use my full middle name, why I sometimes use only my middle initial, and why I sometimes don't use either in correspondances. (WTH?!?!?)
4. Who made inquiries on my credit report in the last 90 days. (Hmmmm. Probably people associated with my PREVIOUS loans on the property, you think?)
GEESH!
On a similar note ... I went by my broker's office yesterday after work to drop off a check for the appraisal done earlier this month. When my wife and I met my broker back on July 7th, he said he would try to get the appraisar to lower the price, since it was just appraised a few months ago by them for the first loans. Well, between then and a few days ago, my broker said the guy wouldn't budge on his fee. Reluctantly, my broker agreed to pitch in $100 of his own money to pay for the appraisal, which was a nice geture. (Of course, for all I know, he did got it reduced by $100, and is making himself look like a Saint.)
I was going to call the tenants yesterday to touch base with how the utility situation went (or is going). My wife suggested that it would probably be best if I didn't call. She said if they had any problems, they have our number (which is true). It's now noon on Wednesday, and I haven't heard anymore from them, so I'm assuming the gas was turned on without any problems.
Tuesday, July 26, 2005
So Far So Good
Well, it's been a little over three days since the tenants officiallymoved in and no real significant news to report. I did get a call from them last night regarding the sewer account. I told them that they would have to call the city to have the bill transferred to them. I'll follow up today with both the city and the tenants on this. According to the husband, the gas was supposed to be turned on either yesterday or today. I'm still keeping my fingers crossed all goes well with that. My agent sent me the finalized lease paperwork and I paid her for her services, so the proverbial line between us is now severed. Now I need to find another agent.
I am also going to start a new marketing campaign. I admit I've slacked off a lot in this area. About the only marketing I've done these last few weeks is place magnetic signs on my car wherever I go. This has produced -0- calls. I'll put out some bandit signs this weekend again, too.
I have a question for investors who are reading my blog regarding direct mail marketing ... I plan to get some postcards made and send them out to my farm area (in staged sectoins). I can pay a service to give me a list of people who may be in a situation where they need to sell their house quickly (i.e., divorce, behind on payments, moving, double payments, and so on). I can pay for this list and send postcards to these people only. Conversely, I can get a list of addresses in my farm area from the county web site and send postcards out to select individuals - for instance, every 3rd or 4th person - regardless of their current situation. I guess there are pros and cons to each, but I wonder which technique would be more beneficial to me in the end?
I'm also going to subscribe to a service that sends out bulk coupons every 2-3 months to select areas. This will go to every household in a select area, but since it's packaged with other advertisements for services, the price is a LOT cheaper (about 4.5 cents each). Likewise, I am going to call the Greensheet and ask how much a custom ad would cost to run on a monthly basis. I know one local investor who has a nice ad in the Greensheet and he says he gets a lot of calls, so I think I'll try it, too. And as a fourth marketing technique, I NEED to get some custom biz cards made. I don't know how many times an opportunity has come along where I could have advertised my services to people with a biz card.
I am also going to start a new marketing campaign. I admit I've slacked off a lot in this area. About the only marketing I've done these last few weeks is place magnetic signs on my car wherever I go. This has produced -0- calls. I'll put out some bandit signs this weekend again, too.
I have a question for investors who are reading my blog regarding direct mail marketing ... I plan to get some postcards made and send them out to my farm area (in staged sectoins). I can pay a service to give me a list of people who may be in a situation where they need to sell their house quickly (i.e., divorce, behind on payments, moving, double payments, and so on). I can pay for this list and send postcards to these people only. Conversely, I can get a list of addresses in my farm area from the county web site and send postcards out to select individuals - for instance, every 3rd or 4th person - regardless of their current situation. I guess there are pros and cons to each, but I wonder which technique would be more beneficial to me in the end?
I'm also going to subscribe to a service that sends out bulk coupons every 2-3 months to select areas. This will go to every household in a select area, but since it's packaged with other advertisements for services, the price is a LOT cheaper (about 4.5 cents each). Likewise, I am going to call the Greensheet and ask how much a custom ad would cost to run on a monthly basis. I know one local investor who has a nice ad in the Greensheet and he says he gets a lot of calls, so I think I'll try it, too. And as a fourth marketing technique, I NEED to get some custom biz cards made. I don't know how many times an opportunity has come along where I could have advertised my services to people with a biz card.
Sunday, July 24, 2005
Renters Are In
Friday
My wife and I were watching a movie, when I got a call from the renters. It was around 7:15pm (thank goodness!), and the wife said the husband would be at the property in around 30 mins. She said she was an hour or so behind, due to having had to clean their previous apartment. I got the keys together and met the husband at the property. I gave him the keys, we chatted for about 15-20 mins about different things, and I left. Before leaving, I told him I would be by the next day to go over some more things.
Saturday
I go by there in the morning and all of us meet (me, my agent, and the hisband & wife). The renters appear to be very nice from my first appearance, which I hope is correct. I made sure my agent gave them the house key from the lockbox, and she picked up her sign and left after a few minutes. Before leaving, she gave me her "bill" and said she would email me the completed lease, which I said was fine. I talked with the renters for about 15-20 more minutes, and went over various things about the property, my policies, and whatnot.
I noticed the gas meter still had a lock on it and the husband said the gas company was coming out Monday to start service. Since I never had the gas turned on during the inspection back in March, I'm keeping my fingers crossed everything works. Being that the house was built in 2002 and inspected by HUD (including the gas system - supposedly) about 6 months before my inspection, I don't foresee any problems.
The tenants are also supposed to give me a copy of the move-in condition form on Monday or Tuesday. While I was there, the wife started going over a few things regarding the condition of the house, and I told her to go ahead and fill those things out on the form ( I guess she was anxious to bring them to my attention).
I guess now I can say ... I'm a LANDLORD!
My wife and I were watching a movie, when I got a call from the renters. It was around 7:15pm (thank goodness!), and the wife said the husband would be at the property in around 30 mins. She said she was an hour or so behind, due to having had to clean their previous apartment. I got the keys together and met the husband at the property. I gave him the keys, we chatted for about 15-20 mins about different things, and I left. Before leaving, I told him I would be by the next day to go over some more things.
Saturday
I go by there in the morning and all of us meet (me, my agent, and the hisband & wife). The renters appear to be very nice from my first appearance, which I hope is correct. I made sure my agent gave them the house key from the lockbox, and she picked up her sign and left after a few minutes. Before leaving, she gave me her "bill" and said she would email me the completed lease, which I said was fine. I talked with the renters for about 15-20 more minutes, and went over various things about the property, my policies, and whatnot.
I noticed the gas meter still had a lock on it and the husband said the gas company was coming out Monday to start service. Since I never had the gas turned on during the inspection back in March, I'm keeping my fingers crossed everything works. Being that the house was built in 2002 and inspected by HUD (including the gas system - supposedly) about 6 months before my inspection, I don't foresee any problems.
The tenants are also supposed to give me a copy of the move-in condition form on Monday or Tuesday. While I was there, the wife started going over a few things regarding the condition of the house, and I told her to go ahead and fill those things out on the form ( I guess she was anxious to bring them to my attention).
I guess now I can say ... I'm a LANDLORD!
Friday, July 22, 2005
Finally, Some Feedback
I had planned on calling my RE agent later today to find out what the plans were for the next 24 hours, but my wife beat me to the punch. She decide to call the agent herself as she was getting more impatient than I. My agent told my wife that the plan was:
1. My agent would pick up her sign, lockbox, and flyers sometime today and leave the house key in the electrical box outside.
2. The tenants said they would be in either tonight or tomorrow morning - she said they weren't sure which one yet. When they get in, they would get the key from the electrical box to unlock the place.
3. My agent and I would meet the tenants at the house tomorrow morning to finish the paperwork, distribute the keys, etc.
Okay, you can bet when I heard the first item, I was immediately surprised. It sounds like a good idea, but I'm a little reluctant about putting a key to an empty house for anyone to grab. What worries me isn't so much that someone could witness my agent putting the key in the electrical box and take the key for themselves later to do damage or steal something. What worries me is that someone could do those things, injure themselves in the process, and then turn-around and sue me.
So, the revised plan has the tenants coming in whenever, and calling me directly to come over and unlock the place. I hope its at a decent hour and not 2:00am or something, but I'd rather be woken up by them asking me to unlock the place rather than get hit with a lawsuit later. Then, we are all supposed to meet there Saturday to go over the paperwork, distribute the keys, and my agent will pick all her stuff up. Whew!
1. My agent would pick up her sign, lockbox, and flyers sometime today and leave the house key in the electrical box outside.
2. The tenants said they would be in either tonight or tomorrow morning - she said they weren't sure which one yet. When they get in, they would get the key from the electrical box to unlock the place.
3. My agent and I would meet the tenants at the house tomorrow morning to finish the paperwork, distribute the keys, etc.
Okay, you can bet when I heard the first item, I was immediately surprised. It sounds like a good idea, but I'm a little reluctant about putting a key to an empty house for anyone to grab. What worries me isn't so much that someone could witness my agent putting the key in the electrical box and take the key for themselves later to do damage or steal something. What worries me is that someone could do those things, injure themselves in the process, and then turn-around and sue me.
So, the revised plan has the tenants coming in whenever, and calling me directly to come over and unlock the place. I hope its at a decent hour and not 2:00am or something, but I'd rather be woken up by them asking me to unlock the place rather than get hit with a lawsuit later. Then, we are all supposed to meet there Saturday to go over the paperwork, distribute the keys, and my agent will pick all her stuff up. Whew!
Keep On smiling
After work yesterday, I stopped by my agent's office to sign the lease. When I got there, my agent wasn't around, which I was actually expecting. What I was not expecting was an incomplete lease agreement. My agent notified me earlier this week that I need to come in and sign the lease. I told her I probably wouldn't make it until Thursday, which is what happened. She said she still needed the husband's initials on all the pages (evidentally, when the husband and wife were in this past Sunday to sign the lease, he only signed the last page, but forgot to initial all the other pages). Well, I figure a few days will give my agent enough time to get the husband's initials. I was wrong. When I get to her office, the receptionist hands me the paperwork to sign. Immediately, I notice the husband's initials are still missing and inquire about it. The receptionist calls my agent, and explains the situation. She gets off of the phone and tells me that the husband was supposed to initial the lease and fax it back to her by 3:00pm on Thursday and - get this - my agent wasn't expecting me in the office so early (it was about 3:10pm). Huh?!?! So now I have to make another trip over there today and sign the paperwork that hopefully has been initialed by the husband (I'll call there first this time, though). It's not a HUGE deal, but come on!
Afterwards, I headed to House #1 to check up on things one last time. I noticed when I installed the security alarm battery the day before, the chirping noise never subsided. So when I got there, the chirping noise was still evident. The alarm is similar to the one at my personal house, so I hit the "Reset" button. Not sure what all that does, but it stopped the damned noise at least. :-) Later at my house, I pulled out my alarm system's "users guide" and it didn't say anything about the "Reset" button. It did say that the chirping noise meant there was a problem with the system. I ran back over there before work this morning to key-in the trouble code and found out the only problem was it was not connected to the central station. Bah!
While at House #1, I decided to check the gas meter to see if the renters had got that started yet, but the meter still has a lock on it. When I went by there before work this morning, I checked again, just in case they stopped by after I left the previous day, but it was still locked.
In the evening, I called the electric company to see what the deal is with the electric. It is still on, but it was supposed to be disconnected a week ago. When I called, I had to enter the account #. When I entered it in, the recorded voice on the other end said the account is not active. I guess I should have talked to a rep to make sure, but I'm thinking either they just closed the account and left the electric on, or the renters activated service a few days earlier (doubtful, since the gas wasn't on).
Also, while at work yesterday, I faxed my broker a copy of my 401k statement (the lender requested it). The broker's assistant emailed me back saying she needed for me to give them a check for the re-appraisal ($325). I told the lady we were waiting on the broker to get back with us, because he was going to see about getting a discount on the appraisal. A few moments later, the broker himself emails me to say the appraisar won't discount the cost, but he wold throw in $100 himself towards the appraisal, making our contribution only $225. Not what I was expecting, but I'll take it!
I'm still batting around the idea of a PM company. My wife thinks we should just do it ourselves, which I tend to agree, but I just like the peice of mind knowing I don't have to deal with any calls. I guess I'm a little paranoid about getting 50 calls each week. In reality, I know over the course of 6 months, I'll probably only get 1-2 calls.
I still need to find out how the process will go on Saturday. Since emails to my RE agent on the subject aren't getting answered, I'll give her a call sometime today to find out.
Afterwards, I headed to House #1 to check up on things one last time. I noticed when I installed the security alarm battery the day before, the chirping noise never subsided. So when I got there, the chirping noise was still evident. The alarm is similar to the one at my personal house, so I hit the "Reset" button. Not sure what all that does, but it stopped the damned noise at least. :-) Later at my house, I pulled out my alarm system's "users guide" and it didn't say anything about the "Reset" button. It did say that the chirping noise meant there was a problem with the system. I ran back over there before work this morning to key-in the trouble code and found out the only problem was it was not connected to the central station. Bah!
While at House #1, I decided to check the gas meter to see if the renters had got that started yet, but the meter still has a lock on it. When I went by there before work this morning, I checked again, just in case they stopped by after I left the previous day, but it was still locked.
In the evening, I called the electric company to see what the deal is with the electric. It is still on, but it was supposed to be disconnected a week ago. When I called, I had to enter the account #. When I entered it in, the recorded voice on the other end said the account is not active. I guess I should have talked to a rep to make sure, but I'm thinking either they just closed the account and left the electric on, or the renters activated service a few days earlier (doubtful, since the gas wasn't on).
Also, while at work yesterday, I faxed my broker a copy of my 401k statement (the lender requested it). The broker's assistant emailed me back saying she needed for me to give them a check for the re-appraisal ($325). I told the lady we were waiting on the broker to get back with us, because he was going to see about getting a discount on the appraisal. A few moments later, the broker himself emails me to say the appraisar won't discount the cost, but he wold throw in $100 himself towards the appraisal, making our contribution only $225. Not what I was expecting, but I'll take it!
I'm still batting around the idea of a PM company. My wife thinks we should just do it ourselves, which I tend to agree, but I just like the peice of mind knowing I don't have to deal with any calls. I guess I'm a little paranoid about getting 50 calls each week. In reality, I know over the course of 6 months, I'll probably only get 1-2 calls.
I still need to find out how the process will go on Saturday. Since emails to my RE agent on the subject aren't getting answered, I'll give her a call sometime today to find out.
Thursday, July 21, 2005
Tying Up More Loose Ends
After work yesterday, I stopped by Radio Shack to pick up a security alarm battery. After "checking in" with my wife, I went to House #1 to do some last minute chores. The electric was on in every part of the house except the master bathroom. After checking the breaker box and seeing no problem, I realized it was probably a GFI breaker that tripped. So I went around to all the GFI outlets and reset the breaker. Wha-la - problem fixed. I then proceeded to vaccuum all the window sills and baseboards - little spiders had started making "cemetaries" around the place already. I then installed the security alarm battery, which needed some time to recharge. Afterwards, I went to Home Depot to pick up a lockset for the garage door. They showed them online for $18, but that included the switch that goes on the inside as well. I got one that only has the lock itself for $4. I get back to House #1, install the lock in a matter of a few minutes (I was surprised how easy it was), lock the place up, and head home. Of course, when I got home, I forgot that I wanted to check if the gas was turned on by the renters yet. Oh well. Maybe I'll swing by there tonight and see.
I'll go by my agent's office tonight to sign the lease. She finally got back with me and said if she's not there then she'll have the paperwork up front for me. I still need to know how things are going to flow the next few days, which she didn't answer. For instance: When does she want paid? When will the renters be in so that I can meet them? Will she be there to meet them? How are they going to get the key? And so on.
Also yesterday, I sent a few emails out to some local property management (PM) companies asking about their services. In the emails, I explained my situation (6-mo lease contract in place, renters moving in this weekend, specs of the property, etc.), so they would have a good indication of whether they could work with me or not. I only sent out three emails as I was spending the majority of my time yesterday restoring a system at work that got trashed due to spyware (supposedly). When I got home (after visiting House #1), I read my emails and got one response. The person said they charge 60% of the first month's rent to occupy the property, which will be waived since I already have a tenant lined up. After that, they charge 7-9% of the rent eachmonth for management, which is about inline to what I figured. The person also said they usually don't do leases for less than 12-months duratoin, but he would be willing to do mine (I guess since I already have someone). Originally, I had wanted to do my own PM for this property )and ONLY this property) to get experience, but I'm finding my free time is almost nonexistent right now, and I would need to line up some maintenance people in case of repairs. So, I thought hiring a PM company now will relieve me of the burden, plus I could hopefully develop a relationship with a company now for future properties.
I'll go by my agent's office tonight to sign the lease. She finally got back with me and said if she's not there then she'll have the paperwork up front for me. I still need to know how things are going to flow the next few days, which she didn't answer. For instance: When does she want paid? When will the renters be in so that I can meet them? Will she be there to meet them? How are they going to get the key? And so on.
Also yesterday, I sent a few emails out to some local property management (PM) companies asking about their services. In the emails, I explained my situation (6-mo lease contract in place, renters moving in this weekend, specs of the property, etc.), so they would have a good indication of whether they could work with me or not. I only sent out three emails as I was spending the majority of my time yesterday restoring a system at work that got trashed due to spyware (supposedly). When I got home (after visiting House #1), I read my emails and got one response. The person said they charge 60% of the first month's rent to occupy the property, which will be waived since I already have a tenant lined up. After that, they charge 7-9% of the rent eachmonth for management, which is about inline to what I figured. The person also said they usually don't do leases for less than 12-months duratoin, but he would be willing to do mine (I guess since I already have someone). Originally, I had wanted to do my own PM for this property )and ONLY this property) to get experience, but I'm finding my free time is almost nonexistent right now, and I would need to line up some maintenance people in case of repairs. So, I thought hiring a PM company now will relieve me of the burden, plus I could hopefully develop a relationship with a company now for future properties.
Wednesday, July 20, 2005
Loose Ends
House Prep
I still need to do a few things before the tenants move into House #1. I plan to go over there tonight and do a final cleaning. I'll also install the security alarm battery and garage door lockset. I also want to take some more pictures of the place - both inside and out - so I have a snapshot of its condition right before they move in.
Agent
I haven't heard from my agent in two days. I sent her an email yesterday morning, asking her when the tenants would like to meet on Saturday. I also asked if she was going to be there. Last night, I sent her another email, explaining to her that I wouldn't be able to get to her office to sign the lease until Thursday afternoon. I also asked her about the addendums I requested a couple of weeks ago, and asked her to have those available when I come in on Thursday.
Broker
Aye Carumba! I'm hoping this will be my last time using a mortgage broker to finance my properties. After this, I'm going to start calling banks and get loans directly through them. Not only will it save me some $$$, but I'm hoping some of the red tape will disappear as well. If you may recall, I told you I agreed to get an option ARM on House #1. At the time, he quoted the rates at around 1.375% for the MTA portion and around 2-2.5% for the lender's margin. Well, he called me yesterday and said the rates have gone up some. I can now expect to pay around 5% total at the beginning. Not a big deal, but now I'm starting to question if this was such a good move - especially since I heard Greenspan today say the fed expects to keep raising rates. Another blow my broker gave me was the lender is going to enforce a prepay penalty on the loan. I can either pay 1.5 points and get no prepay, 1/2 point and a one-year penalty, or 0 points and a 3-yr penalty. ARGH!
I still need to do a few things before the tenants move into House #1. I plan to go over there tonight and do a final cleaning. I'll also install the security alarm battery and garage door lockset. I also want to take some more pictures of the place - both inside and out - so I have a snapshot of its condition right before they move in.
Agent
I haven't heard from my agent in two days. I sent her an email yesterday morning, asking her when the tenants would like to meet on Saturday. I also asked if she was going to be there. Last night, I sent her another email, explaining to her that I wouldn't be able to get to her office to sign the lease until Thursday afternoon. I also asked her about the addendums I requested a couple of weeks ago, and asked her to have those available when I come in on Thursday.
Broker
Aye Carumba! I'm hoping this will be my last time using a mortgage broker to finance my properties. After this, I'm going to start calling banks and get loans directly through them. Not only will it save me some $$$, but I'm hoping some of the red tape will disappear as well. If you may recall, I told you I agreed to get an option ARM on House #1. At the time, he quoted the rates at around 1.375% for the MTA portion and around 2-2.5% for the lender's margin. Well, he called me yesterday and said the rates have gone up some. I can now expect to pay around 5% total at the beginning. Not a big deal, but now I'm starting to question if this was such a good move - especially since I heard Greenspan today say the fed expects to keep raising rates. Another blow my broker gave me was the lender is going to enforce a prepay penalty on the loan. I can either pay 1.5 points and get no prepay, 1/2 point and a one-year penalty, or 0 points and a 3-yr penalty. ARGH!
Tuesday, July 19, 2005
Automatice Garage Door Opener ... or Not?
I was about the width of a human hair away from going to Lowes last night to pick up an automatic garage door opener (AGDO) for House #1, but decided against it. I may install one later (especially if the renters howl and scream about it), but for now I think I'll just get the lockset for the garage door and be done with it. I priced some AGDO models at Lowes and Home Depot, and the cheapest was $129, however, that was for a belt driven model. If I were going to get one, I'd get the screw drive type. The cheapest one of those was $155 at Lowes.
What changed my mind was I started thinking of the places I and other family members have rented in the past that had AGDO's. I can only recall one. Most of the time, we used the garage as a giant storage anyway, so it wasn't utilized on a daily basis to store our vehicles. I priced the lockset at Lowes, and it runs around $18, so I'll save ~$140. Again, if the tenants make a big fuss about it, I'll see what I can do.
What changed my mind was I started thinking of the places I and other family members have rented in the past that had AGDO's. I can only recall one. Most of the time, we used the garage as a giant storage anyway, so it wasn't utilized on a daily basis to store our vehicles. I priced the lockset at Lowes, and it runs around $18, so I'll save ~$140. Again, if the tenants make a big fuss about it, I'll see what I can do.
Monday, July 18, 2005
Friend Onboard?
Okay, so maybe I was a bit premature in analyzing my friend's vision of this industry. As I said in a recent post, my friend appeared very negative about REI.
Well, I got a phone call from him a little before lunch, and he said he would like to know more about what I was doing. I said I could meet him for lunch today and give him a general idea of where I was coming from.
So, we met for lunch, and I told him the basics of REI, starting with the old adage: You make your profit when you buy. After spending the next 30 or so minutes explaining the "why", I asked if he was interested in the "how" - to which he answered "yes". He didn't seem 100% convinced about using the equity in his personal residence, but he wasn't 100% against it, either. He also mentioned he has a relative who is getting his RE license soon, who could help in locating properties on the MLS.
I didn't want to spill too many beans in this conversation, because I want to make sure he is totally onboard with this venture first. The last thing I want to do is regurgetate 10 months of my hard earned experience to him and have him run with it alone (or worse, relay the info to one of his other friends and they run with it). So, now that I have the clay in front of me, I need to form the new relationship in a way that benefits the both of us. And I will tell him the "how" in later meetings.
Well, I got a phone call from him a little before lunch, and he said he would like to know more about what I was doing. I said I could meet him for lunch today and give him a general idea of where I was coming from.
So, we met for lunch, and I told him the basics of REI, starting with the old adage: You make your profit when you buy. After spending the next 30 or so minutes explaining the "why", I asked if he was interested in the "how" - to which he answered "yes". He didn't seem 100% convinced about using the equity in his personal residence, but he wasn't 100% against it, either. He also mentioned he has a relative who is getting his RE license soon, who could help in locating properties on the MLS.
I didn't want to spill too many beans in this conversation, because I want to make sure he is totally onboard with this venture first. The last thing I want to do is regurgetate 10 months of my hard earned experience to him and have him run with it alone (or worse, relay the info to one of his other friends and they run with it). So, now that I have the clay in front of me, I need to form the new relationship in a way that benefits the both of us. And I will tell him the "how" in later meetings.
Quiet Weekend
I had planned to go over to House #1 to mow one last time before the renters come in next Friday, but we managed to get hit with some scattered thunderstorms that nixed that idea. On Sunday, I went over to the property to gather any remaining stuff and to do a general checkup. I had forgotten that I left all the manuals and installation material for the microwave/vent hood in the mocrowave, so I loaded that in the car. I also wanted to get the security alarm battery, so that I can run to Radio Shack and pick one up sometime this week. One other thing I wanted to do was to write down the numbers on all the meters (gas, electric, and water), so I'll have them when service is xferred to the renters. While I was at the property, I decided to check if the electric was still on. Remember, I had called the electric company early last week to have it shut off. They said it was scheduled to be turned off this past Thursday. Well, the first thing I noticed when I walked in the kitchen was the LED clocks on both gas range and microwave flashing. I also turned on some lights around the house, and MOST turned on. I thought it was strange only some turned on, but I was in a hurry, so I didn't try to investigate it any further. Suffice it to say the electric was STILL on. I'm not sure if the electric company forgot somehow (doubtful), delayed the shutoff, didn't physically turn it off (only stopped the billing), or the renters have already turned it on in their name.
Speaking of ... The last word I got from my agent (which was last Thursday) was the renters were going to be in town over the weekend to sign the lease and to look for some land. I thought I would get an update Saturday from my agent, saying the renters signed the lease (and actuallya ttach the lease to the email), but I got nothing. Sunday? Nothing. Monday morning? Nothing. I guess I should come to expect this now, though. I'll send her an email after I get done here.
Also, last Friday, I stopped by my agents office to pick up the renters' check. This will pay for half the security deposit, the prorated rent in July, and a small part of the August rent. I was going to deposit it on Saturday, but my bank is about 10 miles away and I wanted to wait to hear from my agent first if the renters signed the lease. Well, here it is Monday morning and still nothing from my agent. With time ticking, I'll run to my bank and deposit the check today, so that it will have time to clear before they move in on Friday.
Speaking of ... The last word I got from my agent (which was last Thursday) was the renters were going to be in town over the weekend to sign the lease and to look for some land. I thought I would get an update Saturday from my agent, saying the renters signed the lease (and actuallya ttach the lease to the email), but I got nothing. Sunday? Nothing. Monday morning? Nothing. I guess I should come to expect this now, though. I'll send her an email after I get done here.
Also, last Friday, I stopped by my agents office to pick up the renters' check. This will pay for half the security deposit, the prorated rent in July, and a small part of the August rent. I was going to deposit it on Saturday, but my bank is about 10 miles away and I wanted to wait to hear from my agent first if the renters signed the lease. Well, here it is Monday morning and still nothing from my agent. With time ticking, I'll run to my bank and deposit the check today, so that it will have time to clear before they move in on Friday.
Friday, July 15, 2005
The Doers and The Dreamers Revisited
I've become rather accustomed now to the two different ideaologies of financial independence. Practically everyone dreams about financial freedom, but some do while others just continue dreaming. I've mentioned a friend of mine at work before about this topic. He and I have always talked about opening a business and becoming financially independent, but it never went further than just talk. Since we've both endured different paths in our IT careers, this meant we haven't kept in touch as much through the last several years. I've tried on a couple of occasions to 'enlighten' him on this venture called real estate investing, but on both occasions the idea seemed to go on deaf ears. I thought I'd try one more time.
I managed to catch him on chat the other day, and we agreed to meet for lunch today. I didn't tell him at the time that I wanted to discuss REI - only that we'd "catch-up" on what we've been doing in and out of work. So, today rolls around and I send him an IM asking if he's ready to go. He responds that he was but would like to bring along a friend. I know a couple of his friends, and am not too partial with any of them - most of the people where I work are very ... ummmm .. how should I say it? ... conceited. And these friends are no exception. They believe they are Bill Gates reincarnated, and become rather offensive if someone disagrees with their viewpoints (ask me how I know). So, I asked my friend who he was bringing as I thought it was only going to be us, and he mentions it's "Jack" (one of those friends of his). I tell him I have no problem going with him and "Jack", but that I had some important personal information regarding some business ventures I wanted to discuss with him, but would only discuss them with him alone. He asks what kind of ventures and I tell him real estate. I go on to tell him since our last discussion on RE, I've acquired one property and have my foot in the door to buy many more on my way to financial independence. Immediately he reverts to what most dreamers envision: only the negative aspects of RE investing.
Him: "I have friends who have tenants and they tell me nothing but horror stories."
Me: "I've heard horror stories myself, but it won't dissuade me."
Him: "I wouldn't go down that route, if I were you. You'll end up losing more money and pulling your hair out when your tenants refuse to pay rent and tear up your house."
Me: (laughing) "Well all investments come with some risk now, don't they?"
And so on for a few minutes. After awhile, I realized that my efforts were futile, and I abruptly (but nicely) ended the chat on REI. I understood his mindset was not going to change, and he would always be a dreamer only. I told him that I had brought my lunch (which I did) and that we could met again next week or some other time when "Jack" wasn't around to catch-up on our lives. If we do, I'll wait for him to bring the subject up (which I doubt) as I cannot burden myself with anymore negativity. Kiyosaki and others I've read say you need to surround yourself with like-minded people in order to succeed, and I understand why now. Not only does it waste your time, but the negativity really does interfere with progress.
I managed to catch him on chat the other day, and we agreed to meet for lunch today. I didn't tell him at the time that I wanted to discuss REI - only that we'd "catch-up" on what we've been doing in and out of work. So, today rolls around and I send him an IM asking if he's ready to go. He responds that he was but would like to bring along a friend. I know a couple of his friends, and am not too partial with any of them - most of the people where I work are very ... ummmm .. how should I say it? ... conceited. And these friends are no exception. They believe they are Bill Gates reincarnated, and become rather offensive if someone disagrees with their viewpoints (ask me how I know). So, I asked my friend who he was bringing as I thought it was only going to be us, and he mentions it's "Jack" (one of those friends of his). I tell him I have no problem going with him and "Jack", but that I had some important personal information regarding some business ventures I wanted to discuss with him, but would only discuss them with him alone. He asks what kind of ventures and I tell him real estate. I go on to tell him since our last discussion on RE, I've acquired one property and have my foot in the door to buy many more on my way to financial independence. Immediately he reverts to what most dreamers envision: only the negative aspects of RE investing.
Him: "I have friends who have tenants and they tell me nothing but horror stories."
Me: "I've heard horror stories myself, but it won't dissuade me."
Him: "I wouldn't go down that route, if I were you. You'll end up losing more money and pulling your hair out when your tenants refuse to pay rent and tear up your house."
Me: (laughing) "Well all investments come with some risk now, don't they?"
And so on for a few minutes. After awhile, I realized that my efforts were futile, and I abruptly (but nicely) ended the chat on REI. I understood his mindset was not going to change, and he would always be a dreamer only. I told him that I had brought my lunch (which I did) and that we could met again next week or some other time when "Jack" wasn't around to catch-up on our lives. If we do, I'll wait for him to bring the subject up (which I doubt) as I cannot burden myself with anymore negativity. Kiyosaki and others I've read say you need to surround yourself with like-minded people in order to succeed, and I understand why now. Not only does it waste your time, but the negativity really does interfere with progress.
Gnip-Gnop
What a roller coaster ride.
As I mentioned in a reply to my last entry, I got an email from my agent this morning saying the renters are now becoming shaky with the whole deal. All the fees - mine and the utility company's - would cause them to run out of cash fast. The renters told my agent they would leave their pets with in-laws to avoid my pet deposits ($200 refundable / $200 non-refundable), but even that wouldn't probably be enough.
I emailed my agent back with a compromise. I told her the tenants could pay me half of the security deposit by or at lease signing and the balance before or with the Septemeber rent. She relayed my new terms, and the tenants agreed to the compromise. Whew! Investor, "rehabber", accountant, manager, and now diplomat. And this is just ONE property. :-)
Instead of cutting me a new check, my agent said the tenants agreed I could go forth with the check they already submitted, and use it for half the security deposit, the prorated July rent and the remainder as balance forward for Aug rent. In August, they will pay me the balance of the rent due only. Then in September, I'll get the rent check plus the remaining half of the security deposit.
I'm a little uneasy about this whole deal, but I can live with it for now. I just hope that (1) they don't "sneak" their dogs in the property after agreeing not to have pets, and (2) when September rolls around they have the funds to pay the rent and other half of the security deposit.
As I mentioned in a reply to my last entry, I got an email from my agent this morning saying the renters are now becoming shaky with the whole deal. All the fees - mine and the utility company's - would cause them to run out of cash fast. The renters told my agent they would leave their pets with in-laws to avoid my pet deposits ($200 refundable / $200 non-refundable), but even that wouldn't probably be enough.
I emailed my agent back with a compromise. I told her the tenants could pay me half of the security deposit by or at lease signing and the balance before or with the Septemeber rent. She relayed my new terms, and the tenants agreed to the compromise. Whew! Investor, "rehabber", accountant, manager, and now diplomat. And this is just ONE property. :-)
Instead of cutting me a new check, my agent said the tenants agreed I could go forth with the check they already submitted, and use it for half the security deposit, the prorated July rent and the remainder as balance forward for Aug rent. In August, they will pay me the balance of the rent due only. Then in September, I'll get the rent check plus the remaining half of the security deposit.
I'm a little uneasy about this whole deal, but I can live with it for now. I just hope that (1) they don't "sneak" their dogs in the property after agreeing not to have pets, and (2) when September rolls around they have the funds to pay the rent and other half of the security deposit.
Extra Time for Decisions
Now that I have another week to make some decisions before the renters comes in, I have to figure out what to do about the garage door (and a few other nit-picky stuff). I have already cancelled the electric service, so I would need to re-connect it in order to install an automatic garage door opener. The other alternative would be to hire a locksmith and rekey the garage door lock. But I think manually unlocking/locking and opening/closing the garage door will be a very big pain for the renters, so I'm steering away from the locksmith idea. My agent said she overheard another agent say he uses this one guy religiously to install garage door openers. She said she'll try to get the guys name, so I can call for a quote. I checked at Lowes, and I can get a decent one installed for a total of about $250. However, that still leads me back to my initial dilemma of how to get it installed when I have already shut off the electric.
Here is what I have in mind ...
Instead of going through the trouble of turning the electric on/off again for this one little thing, I'll wait until the renters move in to do it. I'll tell them ahead of time that I have someone scheduled to install the garage door opener, but it won't happen until soon after they move in. Three reasons why I plan to do it this way:
The so-so good news is that I ran figures on everything, and will actually come out ahead by about $1320 by the end of this lease (or, stated monthly, about $110/mo CF). Of course, that's IF there are no unforeseen repairs, which we all know is really wishing for a miracle. :-P
Here is what I have in mind ...
Instead of going through the trouble of turning the electric on/off again for this one little thing, I'll wait until the renters move in to do it. I'll tell them ahead of time that I have someone scheduled to install the garage door opener, but it won't happen until soon after they move in. Three reasons why I plan to do it this way:
- With the slowness the electric company goes through when turning on/off service, I fear there may be an overlap in me activating/deactivating service and the renters activating it. All I need is another headache.
- For all I know the renters may back out of the agreement at the last moment, and I'll have stuffed more money into an empty house.
- Okay, I'm not greedy, so don't take this wrong, but I'll save a few $$$ by not activating/deactivating service AND by having the renters pay for the $0.20 of electric that will be used to test the opener. (I know, terrible reason.)
The so-so good news is that I ran figures on everything, and will actually come out ahead by about $1320 by the end of this lease (or, stated monthly, about $110/mo CF). Of course, that's IF there are no unforeseen repairs, which we all know is really wishing for a miracle. :-P
Thursday, July 14, 2005
Some Breathing Room
Whew!
After two emails and one voice mail message, my RE agent finally responded to my requests for more information on the tenants (albeit, none of my questions were truly answered). She emailed me all the paperowrk that I need to look over and sign. When reading the lease agreement, it appears the actual start date will be NEXT weekend, and not this weekend. I saw that and breathed a huge sigh of releif, although, I'm still a bit pissed at the lack of communication. I also found that the tenants have two dogs. While I don't like the fact they have dogs, I wasn't going to deny tenants the opportunity to keep any pets (whithin reason), and they must pay me a non-refundable pet deposit on top of a normal security deposit, which it appears they will agree to.
The questions I were really wanting to know were:
It'll get better - I know it will. :-)
After two emails and one voice mail message, my RE agent finally responded to my requests for more information on the tenants (albeit, none of my questions were truly answered). She emailed me all the paperowrk that I need to look over and sign. When reading the lease agreement, it appears the actual start date will be NEXT weekend, and not this weekend. I saw that and breathed a huge sigh of releif, although, I'm still a bit pissed at the lack of communication. I also found that the tenants have two dogs. While I don't like the fact they have dogs, I wasn't going to deny tenants the opportunity to keep any pets (whithin reason), and they must pay me a non-refundable pet deposit on top of a normal security deposit, which it appears they will agree to.
The questions I were really wanting to know were:
- Are the tenants still scheduled to come in Saturday?
I'm assuming by her short message in the email and the lease agreement, the answer is 'no'. She just mentioned for me to review the docs, sign them, return them to her and she would get them to the tenants to review/sign.
- Do the tenants have all the utilities squared away?
Again, I'm guessing they have the info, and will have everything - except the water and sewer - set to go upon moving in, but I don't have a definate answer.
- Do they have the funds required to move-in and will it be in the form of a cashier's check or money order?
My agent said they have already made out a personal check for the security deposit, so I can verify the funds. How I'm supposed to do that is a mystery to me. Guess I'll just call their bank??? Will they release any info to me???
It'll get better - I know it will. :-)
OT: Phishing
I received what looked to be a very legitimate email from: "NCUA.gov - verification@ncua.gov", saying I needed to click on a link to start the process of verifying some information about my accounts since a case had been opened. I must say the email looked VERY legitimate, but I still had an inkling of suspicion - especially since the URL on the link went to an IP address and not a DNS address, and there was no personal information in the email. Sure enough, I used a test computer at work and went to NCUA.gov, and right on the front page they have an alert about phishing. I've had several emails from supposed banks in my email that were easily recognizable as phishing scams, but this one was probably the most legitimate-looking. Beware!
More on Prep
I managed to get over to House #1 last night to hang up the blind I damaged the day before. After I hung it up, I couldn't tell it had even been damaged at all. Hopefully this will be the extent of the "repairs" I need to do on this place, but ...
The more and more I think about it, I am going to have to do something about the garage door's access. As it stands now, there is no way to unlock it from the outside. It has a lock on it, but since this was a HUD foreclosure, it didn't come with the key. I never gave it much thought because I had planned on selling the property - not renting it out. To have it rekeyed will probably be around $30, I'm guessing. I got a flyer in the mail yesterday from Lowe's that has a special on certain garage door openers. I may just fork over the ~$250 and get one installed after the tenants move in. Speaking of ...
I still haven't gotten any updates from my RE agent regarding the tenants. Last I heard, they were still planning on coming in on Saturday, but I really don't see how. I scheduled electric service to be shut off today, and I know the electric company here is S-L-O-W about getting service connected. And the lady at the gas company said they need a week's notice to get things set up. My RE agent supposedly told the tenants this earlier this week, so it's really out of my hands now. The only things that ARE on are the water and sewer. I've got the paperwork for the water to be transferred, but I need the tenants to verify the meter reading with me and sign it. I'll touch base with my agent today to see what the status is.
Also, I haven't heard a peep from my mortgage broker. We met with him last Thursday to start the refinancing of House #1. He said he will probably need me to send him some documentation, but he would have to wait to see what the lender wants first. I guess he's still waiting. I'll follow-up with him today as well.
The more and more I think about it, I am going to have to do something about the garage door's access. As it stands now, there is no way to unlock it from the outside. It has a lock on it, but since this was a HUD foreclosure, it didn't come with the key. I never gave it much thought because I had planned on selling the property - not renting it out. To have it rekeyed will probably be around $30, I'm guessing. I got a flyer in the mail yesterday from Lowe's that has a special on certain garage door openers. I may just fork over the ~$250 and get one installed after the tenants move in. Speaking of ...
I still haven't gotten any updates from my RE agent regarding the tenants. Last I heard, they were still planning on coming in on Saturday, but I really don't see how. I scheduled electric service to be shut off today, and I know the electric company here is S-L-O-W about getting service connected. And the lady at the gas company said they need a week's notice to get things set up. My RE agent supposedly told the tenants this earlier this week, so it's really out of my hands now. The only things that ARE on are the water and sewer. I've got the paperwork for the water to be transferred, but I need the tenants to verify the meter reading with me and sign it. I'll touch base with my agent today to see what the status is.
Also, I haven't heard a peep from my mortgage broker. We met with him last Thursday to start the refinancing of House #1. He said he will probably need me to send him some documentation, but he would have to wait to see what the lender wants first. I guess he's still waiting. I'll follow-up with him today as well.
Wednesday, July 13, 2005
Preparing for the Renters
My FIL and I spent about three hours last night putting up some blinds I purchased from Home Depot on my way home from work. It took us about one hour to figure out how to install one, and then two hours to install the other 14. I also took the time to water the trees/shrubs one last time before the renters move in. I got the cheap plastic blinds, but they still set me back about $180, but it makes the place look nice. I was putting one of the blinds up and it slipped out of my grasp. As I went to catch it, I managed to snap the ends off two of the blades. Luckily, the blinds come with spares, and I took it hoe with me and managed to repair my blunder. I'll run over there tonight and put it back up.
I'm still not sure what to do about the garage. It is wired for a garage door opener, but I never put one in. It also has a lock on it, but I was never given a key for it or had it replaced. If the tenants scream and yell about it, I guess I'll fork over the money to put an automatic garage door opener in or replace the lock.
I also made a few calls to the utility companies. Electric will be shut off on Thursday. The water and sewer will need to be transferred to the new tenants name. I guess I'll have to coordinate with them on getting this transferred. I also called the propane gas company, and they said they are still working with HUD in getting the previous owner's balance taken care of. However, they said this has no bearing on me or my tenants. Whew! The problem though is that they said they need a week to get things set up and to schedule an orientation with the tenants. The tenants are expecting to move in this Saturday, so I see headache #1 coming on.
I wrote my RE agent (since she is responsible for getting the tenants in properly) with all the information. She also sent me the tenants credit reports and criminal background, which I still need to find time to read. I glanced over both quickly last night, and while there are a few blips, I don't think they'll be troublesome. (But who really knows.)
I'm still not sure what to do about the garage. It is wired for a garage door opener, but I never put one in. It also has a lock on it, but I was never given a key for it or had it replaced. If the tenants scream and yell about it, I guess I'll fork over the money to put an automatic garage door opener in or replace the lock.
I also made a few calls to the utility companies. Electric will be shut off on Thursday. The water and sewer will need to be transferred to the new tenants name. I guess I'll have to coordinate with them on getting this transferred. I also called the propane gas company, and they said they are still working with HUD in getting the previous owner's balance taken care of. However, they said this has no bearing on me or my tenants. Whew! The problem though is that they said they need a week to get things set up and to schedule an orientation with the tenants. The tenants are expecting to move in this Saturday, so I see headache #1 coming on.
I wrote my RE agent (since she is responsible for getting the tenants in properly) with all the information. She also sent me the tenants credit reports and criminal background, which I still need to find time to read. I glanced over both quickly last night, and while there are a few blips, I don't think they'll be troublesome. (But who really knows.)
Tuesday, July 12, 2005
Just My Luck
I got on my Gmail account in the early afternoon yesterday, and I found not one, but two feedback emails on House #1. My RE agent set up an accont on Homefeedback.com that allows showing agents to give feedback on a property after they've seen it. Before yesterday, I had a total 5 showings. Of those 5, only 3 responded - and they were all neutral (one actually said it was priced too high). Well, lo-and-behold I get a renter to commit on Sunda, and then what happens? I get THREE positive feedbacks (two yesterday afternoon and one this morning), who thought the price was "At market value", and could submit an offer. I called my agent last night to go over a few things with this bit of good news as the main item, and she asked if I wanted to sell the property more than I wanted to lease it out, which I said 'yes'. She said if things align right, I could still sell it to one of these three interested parties, but it would require the renters to back out for some reason. She said she'll talk to the renters again, but the chances are slim-to-none that they'll back out now. That's just great. :-/ Two months with no interested parties, and then BAM! right when I get a renter in FOR LESS THAN I WANTED. I could possibly have this thing sold for about a $13k profit, but I decided to pull the trigger too soon.
Where were these people 2-3 weeks ago?!?! :-P
[Edit - Has anyone heard from Joe or Mike? Last I saw, Joe had a big deal on the horizon, but I tried going to his blog this morning, and it no longer exists. Mike hasn't had an entry since early April, either.]
Where were these people 2-3 weeks ago?!?! :-P
[Edit - Has anyone heard from Joe or Mike? Last I saw, Joe had a big deal on the horizon, but I tried going to his blog this morning, and it no longer exists. Mike hasn't had an entry since early April, either.]
Monday, July 11, 2005
NOI for House #1
Instead of trying to decipher pages of financial info, I decided to just break down the monthly NOI and CF for House #1. These figures are a little misleading, because I have to still recoup some costs, and left out a bunch of information that will adjust the bottom-line tremendously. Suffice it to say I'll still be negative by year's end as far as cash: ($10,500), but I'll have approximately $30,000 in equity, so my bottom line will be around +$20k in networth.
(a) The quoted 4.875% interest rate is the current P&I rate for the option ARM I got. I could also pay interest-only @3.125% (or $445.51/mo) or pay negative amortization @1.375% (or $352.72/mo). I will have to pay the 1.375% for the first payment, and subsequent payments will adjust based on the MTA rate. The 10yr history shows the MTA at a high of ~6.5% in the 1990's. The lender adds a margin of 1.5% to 2% to that amount depending on several factors. Since the rate is an average of an average, the potential for sudden spikes in rates is almost nonexistent - the increases (and decreases), if they occur, will reflect slowly over time.
Loan Balance: $104,000
Interest Rate: 4.875%(a)
Monthly Payment: $550.38
Rate Monthly
======== ===========
Potential Rent Income: - $ 1,100.00
Vacancy: 0.000% $ 0.00
-----------
Gross Operating Income: $ 1,100.00
Real Estate Taxes: 2.354% $ 268.72
Property Insurance: - $ 47.67
Property Management: 8.000% $ 88.00
Maintenance: 5.000% $ 55.00
HOA Dues: - $ 11.00
-----------
Total Operating Expense: $ 470.39
===========
Net Operating Income: $ 629.61
Debt Service: 4.875% $ 550.38
===========
Cashflow (before taxes): $ 79.24
(a) The quoted 4.875% interest rate is the current P&I rate for the option ARM I got. I could also pay interest-only @3.125% (or $445.51/mo) or pay negative amortization @1.375% (or $352.72/mo). I will have to pay the 1.375% for the first payment, and subsequent payments will adjust based on the MTA rate. The 10yr history shows the MTA at a high of ~6.5% in the 1990's. The lender adds a margin of 1.5% to 2% to that amount depending on several factors. Since the rate is an average of an average, the potential for sudden spikes in rates is almost nonexistent - the increases (and decreases), if they occur, will reflect slowly over time.
Renters for House #1
I didn't really expect to hear from my RE agent on Sunday. I thought either the people from Houston would postpone their trip to Austin again, or they would reject my house and/or offer. Well, it turns out that not only did they want to rent the property, but agreed to the price I had on the table. If you recall, my agent said they were only looking at properties with a rent price of $1,000/mo or less. She said she would try to get them up to $1,050/mo, but I told her I would stay firm at $1,100/mo.
Of course with every upside there always has to be a downside (albeit the downside isn't really that bad).
My agent said they were deciding on my house and a 2-story in the same neighborhood. She said she convinced them to go with mine since it was a 1-story, newer, no back neighbors, and so on. They agreed, but said that I would have to install blinds in all the windows and they would only lease the place out for 6 months (and month-to-month after that). I realized before that I would probably need to install blinds if I got a renter in, but I wanted to wait to see if it got purchased before spending unwarranted cash on blinds. The 6 month lease term also hit a sour note with me. My agent said beforehand that they really want to find some land and build a home, so they probably won't stay past 6-9 months. This will give me some reprieve, but if they vacate in 6 months, I'll have an empty home to fill or sell right in the dead of winter.
Regardless, I discussed it with my wife, and we both agreed to the terms. I asked my agent when they expected to move in and she said THIS Saturday! Now I'll be in hurry-up mode trying to get things ready for them. I went to the house right after I talked to my agent and measured all the windows for blinds. She said we can get the cheapos, which is what I plan to do. I understand Home Depot has some for $4-$5 each and will cut them for you. If so, I'll (hopefully) only fork over another $100-$150 for this. I also need to get a battery for the security system, cal the utility companies, make a list of contacts, draft up a list of "House Rules", and about 100 other things.
Of course with every upside there always has to be a downside (albeit the downside isn't really that bad).
My agent said they were deciding on my house and a 2-story in the same neighborhood. She said she convinced them to go with mine since it was a 1-story, newer, no back neighbors, and so on. They agreed, but said that I would have to install blinds in all the windows and they would only lease the place out for 6 months (and month-to-month after that). I realized before that I would probably need to install blinds if I got a renter in, but I wanted to wait to see if it got purchased before spending unwarranted cash on blinds. The 6 month lease term also hit a sour note with me. My agent said beforehand that they really want to find some land and build a home, so they probably won't stay past 6-9 months. This will give me some reprieve, but if they vacate in 6 months, I'll have an empty home to fill or sell right in the dead of winter.
Regardless, I discussed it with my wife, and we both agreed to the terms. I asked my agent when they expected to move in and she said THIS Saturday! Now I'll be in hurry-up mode trying to get things ready for them. I went to the house right after I talked to my agent and measured all the windows for blinds. She said we can get the cheapos, which is what I plan to do. I understand Home Depot has some for $4-$5 each and will cut them for you. If so, I'll (hopefully) only fork over another $100-$150 for this. I also need to get a battery for the security system, cal the utility companies, make a list of contacts, draft up a list of "House Rules", and about 100 other things.
Sunday, July 10, 2005
Ramblings
Business Plan
As I said in my last entry, the talk I had with my mortgage broker regarding the need to treat this venture as a business really hit home. I've been using the time in-between (when I have time that is) to research writing a business plan. Even if I never use the plan to secure any type of financing or whatnot, it will still give me better insight on what it is I am trying to do and how I plan to do it. The Small Business Administration is probably the best source for this type of thing. There are also real estate investors out there who push their own business plans (for a price, of course).
My RE Agent
I sent my RE agent an email the other day asking her about a few items. The main item was the addendums my wife and I signed last week that she was supposed to send me copies of. She said she's been busy since she got back from the July 4th weekend, but would have them to me ASAP. It's now Sunday, and I still don't have them. She also said the people who were supposed to look at my property last Tuesday decided instead to wait for today to see it. She asked me if I was still firm on my rental price, and I told her 'yes'. I'm thinking now that maybe I should just lower my rental price to get someone in the house just so I can sever the ties with this agent.
Foreclosed Multi-family Units
I did some investigating over the weekend, and found not one, not two, not even 3 or 4, but FIVE multi-family properties that have been or are going through foreclosure. Interestingly enough, all of them are within a stone's throw from one another. Four of them are duplexes and one is a 4-plex. Stay tuned.
As I said in my last entry, the talk I had with my mortgage broker regarding the need to treat this venture as a business really hit home. I've been using the time in-between (when I have time that is) to research writing a business plan. Even if I never use the plan to secure any type of financing or whatnot, it will still give me better insight on what it is I am trying to do and how I plan to do it. The Small Business Administration is probably the best source for this type of thing. There are also real estate investors out there who push their own business plans (for a price, of course).
My RE Agent
I sent my RE agent an email the other day asking her about a few items. The main item was the addendums my wife and I signed last week that she was supposed to send me copies of. She said she's been busy since she got back from the July 4th weekend, but would have them to me ASAP. It's now Sunday, and I still don't have them. She also said the people who were supposed to look at my property last Tuesday decided instead to wait for today to see it. She asked me if I was still firm on my rental price, and I told her 'yes'. I'm thinking now that maybe I should just lower my rental price to get someone in the house just so I can sever the ties with this agent.
Foreclosed Multi-family Units
I did some investigating over the weekend, and found not one, not two, not even 3 or 4, but FIVE multi-family properties that have been or are going through foreclosure. Interestingly enough, all of them are within a stone's throw from one another. Four of them are duplexes and one is a 4-plex. Stay tuned.
Friday, July 08, 2005
Meeting with My Mortgage Broker
Prelude
My wife and I met with my mortgage broker to discuss refinance options on House #1. It turned out to also be an education in the pitfalls of procrastination.
First, the main reason for the meeting was to discuss our financing options from this point with House #1. Right off the bat, my broker asked us what are plans were for the house. I told him we currently have it on both te retail and lease market. If it sold to a retail buyer, we'd be happy, and if we got a renter in the place, we'd be equally happy. He listened to our response, and then asked us again what we wanted to do with the house, but he also inquired as to what we wanted to do period. My wife and I looked at each other, and I told him that my plans were to acquire several SFR's, eventually get some duplexes/4-plexes, and then move up to small apartments and/or more multi-family investments. Then came something I've known about, but needed to hear from someone firsthand ...
He said that he could tell we had no plan in place for this property, and that if we decided to go forward with my vision, the first thing we would need to do is write a business plan.
He said this was something you just couldn't do without a plan. If we tried to do it halfway, we would fail. And if we continued without a plan, we might as well stop right now. I won't say this came as a shock to me as I've heard this from just about everyone I've met in this industry, except it really hit home the way he said it. We then spent the next hour talking about the subject in detail. After that, he then asked us what we wanted to do with the house. At this point, I told him that I would like to hold on to it as a long-term asset, which he then started to discuss our financing options.
Financing
I'm not a big fan of the new financing models that are out there. I've always been accuustomed to the regular 30yr, 15yr, ARMs, etc. I'm not too savvy when it comes to some of the more nontraditional financing methods nor am I "hip" on the idea of financing that takes money out of an asset each month. However, my curiosity piqued at the idea of what is commonly called a "pay option ARM". I don't like the idea of making a payment that not only adds nothing to the principal of a loan, but actually increases the payoff, but the pay-option ARM does give the holder the OPTION to do this. The holder can also make an interest-only (IO) payment if they wish, or make a full interest+principal payment. That's why it's called a pay-option ARM. Of course with any luxuary there comes a price. The pay-option ARM is adjusted on a monthly basis. The rate is directly affected by the MTA (or 12 Month Treasury Average). I won't go into the details, but a Google search for "+MTA +treasury" will yeild some hits. Even paying the P&I for the new loan, it would bring my payments down almost $200/mo. today, which would cover PM and maintenance AND allow me to reduce the rent value (if I wanted).
I'll explain why I chose this route more in a later blog entry as I will have to go more in detail of my particular situation.
My wife and I met with my mortgage broker to discuss refinance options on House #1. It turned out to also be an education in the pitfalls of procrastination.
First, the main reason for the meeting was to discuss our financing options from this point with House #1. Right off the bat, my broker asked us what are plans were for the house. I told him we currently have it on both te retail and lease market. If it sold to a retail buyer, we'd be happy, and if we got a renter in the place, we'd be equally happy. He listened to our response, and then asked us again what we wanted to do with the house, but he also inquired as to what we wanted to do period. My wife and I looked at each other, and I told him that my plans were to acquire several SFR's, eventually get some duplexes/4-plexes, and then move up to small apartments and/or more multi-family investments. Then came something I've known about, but needed to hear from someone firsthand ...
He said that he could tell we had no plan in place for this property, and that if we decided to go forward with my vision, the first thing we would need to do is write a business plan.
He said this was something you just couldn't do without a plan. If we tried to do it halfway, we would fail. And if we continued without a plan, we might as well stop right now. I won't say this came as a shock to me as I've heard this from just about everyone I've met in this industry, except it really hit home the way he said it. We then spent the next hour talking about the subject in detail. After that, he then asked us what we wanted to do with the house. At this point, I told him that I would like to hold on to it as a long-term asset, which he then started to discuss our financing options.
Financing
I'm not a big fan of the new financing models that are out there. I've always been accuustomed to the regular 30yr, 15yr, ARMs, etc. I'm not too savvy when it comes to some of the more nontraditional financing methods nor am I "hip" on the idea of financing that takes money out of an asset each month. However, my curiosity piqued at the idea of what is commonly called a "pay option ARM". I don't like the idea of making a payment that not only adds nothing to the principal of a loan, but actually increases the payoff, but the pay-option ARM does give the holder the OPTION to do this. The holder can also make an interest-only (IO) payment if they wish, or make a full interest+principal payment. That's why it's called a pay-option ARM. Of course with any luxuary there comes a price. The pay-option ARM is adjusted on a monthly basis. The rate is directly affected by the MTA (or 12 Month Treasury Average). I won't go into the details, but a Google search for "+MTA +treasury" will yeild some hits. Even paying the P&I for the new loan, it would bring my payments down almost $200/mo. today, which would cover PM and maintenance AND allow me to reduce the rent value (if I wanted).
I'll explain why I chose this route more in a later blog entry as I will have to go more in detail of my particular situation.
Thursday, July 07, 2005
Lack of Service Redux
I know I've mentioned the somewhat surprising lack of service I;ve encountered in this industry, and it just seems to snowball with each day. Here is what I mean ...
CPA - I emailed a guy my mortgage broker referred me to over almost two weeks ago. At first, I gave him the benefit of the doubt, but now I'm thinking he just blew me off for some reason as I've gotten no response from him.
Realtor #1 - I emailed a Realtor twice now about a prospective commercial property and have gotten no answer. The second email I CC'd someone else (the owner?), thinking that would generate a response, but still nothing from either person. Guess they are really in a hurry to sell, huh?
Realtor #2 - My RE agent. The last correspondence I had with her was last Friday. She told me then that she would be going out of town for the 4th of July weekend, and would return on July 5th. She also said her clients scheduled to meet with her on July 5th to tour House #1. Another thing she said she'd do is send me the signed addendums for House #1 (sell and lease agreement addendums). It is now Thursday, July 7th, and I haven't heard a peep from her.
Tax Sale Attorney - On Tuesday, I went to the county courthouse to do some records research. One of the goals I had was to get information on county tax sales - specifically, how to obtain a list of resales. Resales are properties who went to auction but did not get taken. The courthouse was of very little help and referred me to the attorney's office that handles tax sales for them. They had a sattelite office in the courthouse, so I went there. The lday at the desk knew nothing at all about what I was talking about and referred me to their main office. When I got home, I emailed the office, but haven't heard anything.
Other Investors - I've noticed most investors are pretty nice about communicating. Some, though, seem ignorant at best and rude at worst when you try to communicate them via email. I get a lot of email from "newbies" who ask questions (some of which are REALLY basic, but I go out of my way to answer them all.
I realize a lot of folks favor other forms of communication over email, but it just fathoms me how unprofessional they are to give an email address as a means to communicate with them and then they show lack of courtesy by not responding.
Oh well.
CPA - I emailed a guy my mortgage broker referred me to over almost two weeks ago. At first, I gave him the benefit of the doubt, but now I'm thinking he just blew me off for some reason as I've gotten no response from him.
Realtor #1 - I emailed a Realtor twice now about a prospective commercial property and have gotten no answer. The second email I CC'd someone else (the owner?), thinking that would generate a response, but still nothing from either person. Guess they are really in a hurry to sell, huh?
Realtor #2 - My RE agent. The last correspondence I had with her was last Friday. She told me then that she would be going out of town for the 4th of July weekend, and would return on July 5th. She also said her clients scheduled to meet with her on July 5th to tour House #1. Another thing she said she'd do is send me the signed addendums for House #1 (sell and lease agreement addendums). It is now Thursday, July 7th, and I haven't heard a peep from her.
Tax Sale Attorney - On Tuesday, I went to the county courthouse to do some records research. One of the goals I had was to get information on county tax sales - specifically, how to obtain a list of resales. Resales are properties who went to auction but did not get taken. The courthouse was of very little help and referred me to the attorney's office that handles tax sales for them. They had a sattelite office in the courthouse, so I went there. The lday at the desk knew nothing at all about what I was talking about and referred me to their main office. When I got home, I emailed the office, but haven't heard anything.
Other Investors - I've noticed most investors are pretty nice about communicating. Some, though, seem ignorant at best and rude at worst when you try to communicate them via email. I get a lot of email from "newbies" who ask questions (some of which are REALLY basic, but I go out of my way to answer them all.
I realize a lot of folks favor other forms of communication over email, but it just fathoms me how unprofessional they are to give an email address as a means to communicate with them and then they show lack of courtesy by not responding.
Oh well.
Tuesday, July 05, 2005
Exhausting Weekend
I'm seriously out of shape. I knew it before, but this weekend just solidified my point.
I got up Saturday morning and loaded the car for another trip to House #1 to do some yard work. First, though, I put out a couple more bandit signs. I then set out to remulch the scrawny tree in the front yard. After doing that, I started mowing the lawn. I have a mower that can mulch, bag, or just shoot the grass out the side. Last time I mowed this property, I used the mulcher and the mower kept dying because the grass was too high. This time I decided to try out the bagger ... wrong choice.
I must haved emptied the bagger out at least 20 times. Couple that with a blazing sun, 90+ degree temps, and 40%+ humidity, and I felt like I had just completed a marathon at the end. I have never felt so exhausted in my entire life. Matter of fact, I didn't even have the energy to weed eat the place. I just packed what I could in the car and went home. Even as I was going to bed for the evening, I was still feeling it.
On Sunday, I went to the property and completed the work. I also managed to stop by a few prospective properties. They were all multi-family units that may be promising investments. I still need to run deeper numbers, but I could potentially be looking at a CF of $1,000/mo collectively with them.
On Monday, I was STILL feeling the exhaustion from Saturday (and Sunday). This time, though, I had to help my wife with cleaning around the house. While I was still physically tired, the A/C definately made things better. ;-)
Today (Tuesday), I plan to run down to the county courthouse for the first time and snoop around. I don;t have a solid plan of what I'll do there, but I just mainly want to see where the records are kept and how to research properties. I also want to see where they post properties who've been tagged as going to foreclosure. By law, they are supposed to post this information at the courthouse - somewhere.
I'm also going to attend the loal REI club meeting this evening. I haven't been to a meeting since last December (ugh!). Hopefully I can touch base with a few other REI's and find out who they use for CPA's, property management, etc.
BTW, an investor emailed me over the weekend about a house local to me. He wants to flip it over to me for a $5k fee. The numbers appeared a little tight, though, and there were some assumptions I didn't feel comfortable with so I told him 'thanks, but no thanks'. If I had a larger cash reserve, I may have took the chance, but I'm only looking at deeply discounted properties now.
Not a single call from the 5 bandit signs I currently have up, either.
I got up Saturday morning and loaded the car for another trip to House #1 to do some yard work. First, though, I put out a couple more bandit signs. I then set out to remulch the scrawny tree in the front yard. After doing that, I started mowing the lawn. I have a mower that can mulch, bag, or just shoot the grass out the side. Last time I mowed this property, I used the mulcher and the mower kept dying because the grass was too high. This time I decided to try out the bagger ... wrong choice.
I must haved emptied the bagger out at least 20 times. Couple that with a blazing sun, 90+ degree temps, and 40%+ humidity, and I felt like I had just completed a marathon at the end. I have never felt so exhausted in my entire life. Matter of fact, I didn't even have the energy to weed eat the place. I just packed what I could in the car and went home. Even as I was going to bed for the evening, I was still feeling it.
On Sunday, I went to the property and completed the work. I also managed to stop by a few prospective properties. They were all multi-family units that may be promising investments. I still need to run deeper numbers, but I could potentially be looking at a CF of $1,000/mo collectively with them.
On Monday, I was STILL feeling the exhaustion from Saturday (and Sunday). This time, though, I had to help my wife with cleaning around the house. While I was still physically tired, the A/C definately made things better. ;-)
Today (Tuesday), I plan to run down to the county courthouse for the first time and snoop around. I don;t have a solid plan of what I'll do there, but I just mainly want to see where the records are kept and how to research properties. I also want to see where they post properties who've been tagged as going to foreclosure. By law, they are supposed to post this information at the courthouse - somewhere.
I'm also going to attend the loal REI club meeting this evening. I haven't been to a meeting since last December (ugh!). Hopefully I can touch base with a few other REI's and find out who they use for CPA's, property management, etc.
BTW, an investor emailed me over the weekend about a house local to me. He wants to flip it over to me for a $5k fee. The numbers appeared a little tight, though, and there were some assumptions I didn't feel comfortable with so I told him 'thanks, but no thanks'. If I had a larger cash reserve, I may have took the chance, but I'm only looking at deeply discounted properties now.
Not a single call from the 5 bandit signs I currently have up, either.
Friday, July 01, 2005
Possible Renter for House #1?
I got an email from my agent yesterday saying she has some clients who are looking for a place to rent for a year in my area. She said they are looking for a house that fits mine as far as size, location, rooms, etc. The downside is they have told her that they don't want to spend more than $1000/mo. on rent. She said she could try to convince them to go for $1,050, if it was okay with me. When I got home, I ran some numbers, and even at $1,050, I would be cashflow negative - and this was with NO property management company and VERY LITTLE maintenance. I sent her an email, and told her that the least I could rent for would be $1,100/mo., and even that would be pushing it. So, if the people would pay $1,100/mo. and move in ASAP, we would have a deal. I kind of doubt they'll accept, but we'll see what happens.
Coincidentally, today was the first day my new price reductions went into affect in the MLS. Perhaps now I will start getting a few more nibbles. I found out it was shown for the FOURTH time on Wednesday, but I haven't gotten any feedback from the showing agent on what the house hunters thought.
Coincidentally, today was the first day my new price reductions went into affect in the MLS. Perhaps now I will start getting a few more nibbles. I found out it was shown for the FOURTH time on Wednesday, but I haven't gotten any feedback from the showing agent on what the house hunters thought.
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