Wow - What a difference a day makes

I drug myself into work yesterday after being on vacation for a little over 19 days. I was feeling a bit down as I really hadn't done much to help my REI career over that time, and knew my free time would again be cut short soon with the arrival of my wife's and my twins. By the time I went to bed last night, however, several things happened to me regarding REI that really lifted my spirits:

Tenants - We hadn't received the January rent check from the tenants yet, and our lease agreement stipulates it is due no later than the 3rd of each month at 5:00pm. It wasn't like the tenants to be late paying, so I blamed it on the holidays. Sure enough, when I got home, the rent check was in the mailbox. Whew! I would have hate calling them to sort that mess out. Another thing in our lease agreement is that they are to give us 30 days written notice if they plan to move out. To digress, they signed a 6-month lease that is renewable month-to-month unless WE or THEY give the other party 30-days written notice. We hadn't received anything from them, so I called them last night to touch base. After informal chit-chat, I reminded them about the stipulation in the lease agreement. They said they were aware of it, and - get this - asked me if they could stay for a few more months. I replied, "Sure. That is your option", while dancing happily on the other end. As I said before, they have been EXCEPTIONAL tenants, and I would have hate seeing them go. What I really like, too, is the fact that I'll be getting more rent checks for a while. If they do decide to bail in the April/May/June, this will be excellent as it heads into the prime renting months anyway.

Title Company - One of my goals that I have REALLY procrastinated on doing is calling title companies to see how their services can help me in my venture. Over the holidays, I posted a request for recommendations for title companies on the local REI club message board. I hadn't gotten a response, so I never thought anything more about it (okay, I got sidetracked on other stuff). Yesterday, I get a call from a lady who works for a local title company, saying a gentleman gave her my name/number and said I was looking for a title company to help me. I waited until I got home and called her back. Turns out she heads the marketing portion of the title company, and wasn't the exact person I needed to speak with. I gave her some questions, and she said she would forward them to their head closing agent, who would call me back. She also asked if I could come in to talk, which I said "yes", but it wouldn't be until this Friday or next Monday (I got too many meetings scheduled at work on Wed and Thu). Since this was a referral from someone who saw my message in the REI club message board, I feel confident they work with investors, and can help me.

Possible Deal - I also got a call from an owner who wants to sell their house. Again, they left a message, and while their voice and demeanor didn't sound like someone who was motivated, they did give me enough information to figure out their history. When I got home, I ran some numbers and found the following:

Description: Built in 2000, 1500sf
Deed of Trust: 09/23/2003 for $126,520 (15yr note)
Comps: $125,000 - $130,000 (depending on # of bedrooms, etc.)

After doing some more digging, I figured their current situation looks similar to this (based on a loan for $126,520 @6% for 15yrs):

Loan Balance: $113,500
Loan Payment: $1,070/mo.
Taxes: $263/mo.
Insurance: $53/mo.
Total Monthly Debt: $1,386/mo.

That's probably a little too high to rent out, but I could still get it and sell via owner-financing for a nice profit:

Purchase Price: $135,000
Interest Rate: 9% (30yr)
Downpayment: $7,000
Cashflow/Month: $16

The monthly cashflow is out of the range I'd like ($200 min), but the fact that the existing note is for 15 years means the debt paydown will occur more quickly, leaving me more backend profit. After two years, I could be looking at:

Downpayment: $7,000
Cashflow (Total): $384
Equity Balance: $132,980 - $99,600 = $33,380
Total Profit: $40,764

Of course, that doesn't account for acquisition costs (~$2,000), holding costs (~$4,000), and repairs ($0?). All told, I could still be looking at $30,000 in profit, minimum, in two years. Of course, I have to see what the seller's needs are first. :-)

Another Deal - I have another deal in the works, which I want to keep mum about right now. If things work out, I may reveal some of the details, but we'll see.

Birddogs/Investors - I've been in touch with a couple of birddogs and two investors that work my area. Both birddogs are new to REI, so I'll have to "mold" them into my criteria. The investors appear to be both knowledgeable and easy to work with (first impression). One of them even owns a coffee house in a nearby town.

CPA - I faxed our CPA a copy of our 2004 tax returns (she said she needed them to better understand our financial history for tax purposes), more mileage info, and the total of our water/sewer bills for 2005 (part of the home deduction write-off).

All-in-all it was a very uplifting day for me. I just hope things pan out today, and I can close a lot of these open items. Stay tuned!