Loaded Weekend

I had another one of those busy weekends regarding REI. Not overwhleming, but just consistantly busy. Here's what happened ...

Friday
I get an email from the loan broker regarding the possible lease/purchase, asking if I'm ready to make an offer. I reply back, saying I hadn't had time to crunch numbers yet, but will hopefully get an answer by Saturday afternoon. I also make a list of potential properties to go look at on Saturday. Including the lease/purchase deal, I have a total of 8 properties to view.

Saturday
I get a late start, and head out the door around noon on Saturday. I decided to stop by Home Depot first and pick up some stakes for bandit signs. I hadn't put any bandit signs out in forever it seems. When all is said and done, I actually end up with a list of 11 properties (I'll explain below), however, I decided in the course of action not to see one of the houses on my original list (just not enough time).

Property #1 - The first property on my list was decent. It didn't appear to have any problems. Matter of fact, even the carpet looked in good condition. I noticed when I drove up to the property that the next door property had overgrown weeds, but there were signs that someone was living there. When I finish my inspection of the first property, I get in my car, and s-l-o-w-l-y drive forward. When I am in sight of the front door, I notice a couple slips of papers wedged in the door jam and some circulars on the front porch. Bingo! So I stop the car and investigate. It turns out one of the slips of paper was a notice from the water company that they locked the meter due to the H/O not paying their bill. The second slip of paper read: "Travis County Constables Office - Warrant for Arrest". I think that about summed it all up. I wrote this down as Property #2. I wrote down the address, and made some other notes and headed for the next property.

Property #3 - Nice little house in good condition overall. The carpet was lightly stained, but nothing else appeared in need of heavy repair.

Property #4 - Very nice 1-story. It had some nice architectural features inside, and it appeared the previous H/O's took care of the house. The backyard had a fence with two access gates (they usually only have one around here). However, the backyard was kind of small. Still, a very nice house - especially for the price.

Property #5 (Lease/Purchase) - This was the house that the loan broker is trying to push on me for a L/P. It's a big 2-story, and had some nice qualities. I'll talk more about the deal later in this post.

Property #6 - When I finished looking at the L/P property, I was making my way back to the car when I glanced over at the house next door. All the blinds were up and it appeared to be empty. I walked to the front and noticed one of those HUD signs in the window, which I thought was odd as this house isn't currently listed nor had it been in the recent past. I then did an inspection of the property. Part of the wood fence was knocked down, but the property looked in emmaculate condition - like it was just built. Upon further inspection, I noticed the whole kitchen was gone! There were no cabinets and no appliances. It appears the house was never completed. I wrote down some notes, and headed to the next property.

Property #7 - Another VERY nice house. It was situated on a slight incline, so that the person living there had a nice view of the empty meadow in the back. Similar to House #1's views from the back. It also had some nice indoor architectural features, like curved arches and art niches. This house was also kept in good condition by the previous owner. I found out later, though, that the list price was just way too much, and I'd have to pass on the deal.

Property #8 - While heading to the next property, I passed by a 2-story on the same street that appeared abandoned. It had all the earmarks of an abandoned property, except there were no papers on the front porch. I decided to just get the address and get a picture of the front elevation, but not do a formal inspection as someone could still be living there.

Property #9 - Decent 2-story from the info I previously had. However, upon inspection, it looked like it would need some work done inside. The carpet downstairs was heavily soiled and would need to be replaced entirely. The worst thing though was the backyard. Not only was it sloping uphill, but it was nothing but slate rock. Nothing was growing there, and nothing will with all that rock. I made some notes and onward I went to the last house.

Property #10 - This property looked similar to House #1 as far as the floorplan, but there were some noticeable differences. The overall appearance was nice, and it would definately make a promising addition to my portfolio. The only drawback was the backyard. It, too, was sloping upward at a slightly steep angle (I'd say 35-40 degrees) - but it was all grass. I made some notes on it and left.

In-between seeing several of these houses, I would stop and put out a bandit sign, or two, when I exited the subdivision. Most of the houses were located in the city that has the strict bandit sign ordinance, so I didn't get to put out too many. I spent about 3 hours already, so I decided not to see Property #11, and went straight home. Whatever little free time I had Saturday night and Sunday, I used to start analyzing the properties. I only got through with about 6 of them, including the L/P deal.

I also got a call from the investor I've been posting about here lately. He asked if I decided to get the house, and I told him I'd probably pass. He said he passed on it, too, mainly because all the prices were too high (i.e., list price, PITI). I told him I didn't see the broker's justification for such high appreciation rates (i.e., 10% over two years). I told him I know the area like the back of my hand, and the rates have been stagnant for several years now. It may go up some, but 10% in two years is really wishful thinking. He agreed and said the broker is great to deal with, but he's not an investor and doesn't analyze properties like one. I guess this just reinforced my initial thinking that this deal wasn't very good. I'll talk to the broker later today and tell him I'll pass on it.

Lastly, I went out Sunday night to pick up some Chinese take-out for us. On the way home, I saw a "WE BUY HOUSES" bandit sign, so I decided to call the number right then and there. It sounded liken investor that has been doing this for a while. He said he only does flips, and if I sent him anything, it would have to be at a very steep discount. I told him I am also looking for properties and to add me to his buyer's list, which he said he'd do. He sounded a bit ... I don't know how to say it really ... reserved? threatened? It sounded as though he likes to work alone on deals and only flips houses to his brother-in-law, so we'll see if I ever get anything from him (doubtful).