After over a month's drought of not putting bandit signs out, I decided I needed to get cracking to get the phone ringing. So, I got my tired body out of bed Saturday morning at 5am and left to put up some signs. I went to a different area this time, hoping for better luck. I quickly ran out of the staked signs I had and decided to start nailing signs on telephone poles. In all, I hung 14 signs in a little over an hour. My wife and MIL wanted to go to garage sales, so when I came home, I was immediately transformed from a RE investor to a chauffeur. Ugh, no rest for the weary.
Saturday came and went with not even a single call. Sunday, my FIL decided to fix our shower in the 2nd bath. For a few years now, the shower head would leak water whenever the bath spout had water flowing through it. I recalled a plumber telling me on a message board that I would need to replace the diverter. I just never had the time or inclination since the bathroom was never used - until now. So, my FIL spent almost an hour getting the old one out as it had either calcified in there or the original plumber glued it in. Either way, he had to chip it out with a screwdriver and hammer. We then made a trip to Lowes, but they didn't have the part, so we went to Home Depot. On the way back, my cell phone rang. Without really realizing it, I answered it thinking it was my wife.
No - it was a customer. Good thing I answer my wife politely. ;-P
The lady asked if I buy houses, to which I said "yes". She said she has a 2-story house ina nearby town she wants to sell because her husband is transferring to Dallas. She says they owe about $146,000 and believe the house is worth around $165,000. Not a good deal at all, but may work as a flip or Sub2. I asked her if it would be possible to call her back in about 30 minutes (I had pulled off the side of the road and was writing chicken-scratch on the back of my biz card - nice time to be without my tablet).
When I called her back, this is basically how the conversation went ...
Me: Hello Ms. XXXXX?
Her: Yes?
Me: Hi, my name is Steve and you called me about 30 minutes ago regarding a house you wanted to sell? I am the person who has the "We Buy Houses" sign you mentioned. Could you tell me more about the property, please?
Her: Oh yes. It's located at ZZZZZZZ. It has 4 bedrooms and 2 baths - no wait - 3 baths. (I could hear someone else telling her something.) I'm sorry, it has 2.5 baths.
Me: Thanks. Do you have an idea how big the property is ... square feet?
Her: I believe it's around 2400, but I'm not exactly sure.
Me: No problem. You mentioned you wanted to sell because your husband had a job transfer?
Her: Yes. We were going to sell it ourselves, but time has crept up on us. We just want to sell it now quickly. (---> urgency?)
Me: I understand. Do you know if it needs any repairs?
Her: Nothing major. We just had new tile put in ... (blah blah - talks about the tile ordeal). But it doesn't need anything like appliances or a roof. All that is in good condition.
Me: That sounds good. So maybe some paint and possibly carpet?
Her: Yeah, it could probably use both, now that I think about it.
Me: I see. You had mentioned you owe around $146,000?
Her: Yes.
Me: If you don't mind me asking, what are your monthly payments
Her: Fifteen ... I ... hang on. Yes, $1,543 per month.
Me: Do you know if that include property taxes and insurance?
Her: Not insurance.
Me: I see. How about property taxes?
Her: Yes, it includes taxes. (At that price a month, I figured it would.)
Me: Thanks. Do you know if there are any leins or encumbrances on the property?
Her: I'm not sure what you mean?
Me: No problem. IOW, do you know if anyone has put a lein on your house? For instance, if you had a contractor do work and didn't pay him, they could put what's called a Mechanic's Lein on the house, so when you try to sell the house, it would show up.
Her: Oh. No. Definately not.
Me: Okay. Thanks. That's all the information I need right now, Ms. XXXXX. I will run some numbers and do a little more research on my end, and will get back to you as soon as I can with a decision on whether or not I'll be able to buy your house.
Her: Okay. Thank you.
Me: Have a good evening, Ms XXXXX, and I'll try to get back to you before Tuesday.
Her: Thank you. You, too. Bye.
Me: Bye.
The reason I didn't ask about some things was I had already found her property information in the online tax records. The records showed it was 2,209sf and was built in 1997. It was appraised at the following values:
2005: $161,525
2004: $162,993
2003: $155,509
2002: $171,928
2001: $150,231
2000: $120,674
The deed was dated: 04151996
Since it had such a low value in 2000, and the owners owe around $146k, I'm guessing they refinanced sometime in the last 5 years. I still need to run comps, but from the information I have, I'll probably flip this to another investor. The $1,543 payment/mo. is a little steep for me right now - especially going into the heart of fall and with the holidays approaching. I'm thinking I can hand this off to another investor and just pocket the $500 or so birddog fee. But first, I want to run comps and do a rental analysis to see.
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This property is located in a subdivision that quite frankly has not seen any action in a while. There's only about 30 homes in the area, and none are showing up as sold/rented in the last 6-9 months. Ugh. There aer a few subdivisions located down the road, but those appear "different" in many ways. Even then, their data doesn't support a $1,543/mo payment for a likeable house. So renting is definately out. Comps in those areas also don't support much of a puchase price above $150k, so I'm highly reluctant to take it Sub2 and retail it. I'd have to mark it down a good 10% below the $150k mark just to move it quickly, and that would have me well below the $146k that is owed. So it doesn't look good even for a w/s flip as no investor in their right mind would take it over. I'm guessing someone could do a L/O, but with the new laws in Texas that make it next to impossible to L/O, I wouldn't see how they could swing it.
One day I'll get that motivated caller WITH a property that will make it a match.
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