House #13 - Kitchen

I am way behind on home sales posts.  13 is supposed to be an unlucky number, but this was a good one for us.

We bought the property at the end of April, and sold it 131 days later for 2.5x what we bought it for.  It was listed for 4 days and we got 11 offers all at list or above listing price.  We sold it for 10,000 over what we listed it for and 40,000 above what our hard money lender appraised it for when we bought it.

The buyers are extremely happy with the property.  The most amazing part of this deal was it was an FHA transaction that we closed in under 30 days.  Somehow it made it through an appraisal and a review appraisal.

I am constantly whining about FHA loans and the approval process.  My posts on “FHA 90-Day Rule … A Major Pain” and “FHA 90-Day Rule – Revisited“  outline my frustrations with the process. But now, I finally have something good to say about the FHA Rule!  House #13 we put in escrow July 27, 09 and I just got an email today (Aug 18) that they are drawing loan docs and we should have them this week.

The Buyer’s Agent just sent me this email:

all conditions have been met, the appraisal review is in already, there is no problem with the appraisal, we should be getting loan docs by Monday, we will do our final walk thru this weekend

So in under 30-days we did the original appraisal, the review appraisal and got all conditions removed.  The oddest part is, the lender for this file is Wells Fargo.  It is not some small bank, but Wells Fargo is able to close something in under 30-days.

We are selling the property for almost 2.5x what we bought it for, but we did do a 175 sq ft addition to the property.

I am trying to evaluate why this one is going so much faster.  House #13 did get over 10 offers, I only countered the top 3 offers (in terms of qualifications and price).  When the review appraisal happened, my partner met her at the property with a stack of comps, permit approvals and the executed contract.  The buyers deposit is also non-refundable after 17-days, so once we hit that, the buyers usually do not back out.

The remodel on our first rental is coming along excellent.  Our contractor is very motivated to move-in so he is rushing everyone along.  The kitchen cabinets went in today, the granite will go in tomorrow.

I am still at a pretty big loss on all the paperwork required to “do it right”.  I have almost finished reviewing the course we got and will start doing some research.  The goal is to have all the rental docs, the deposit in and the paperwork signed early next week.  Rental agreements, amendments, all that fun stuff need to be figured out.  I trust the tenant a lot, but I want to separate the relationships between our work and renting the house to them.

Not much else to post about right now, we are working on closing our purchase escrow on a bunch of properties and selling a bunch of properties.

House #13 got a review appraisal on Tuesday.  My partner met the appraiser out there and she told him “not to worry,” but I am worrying a little bit, based on the comps she could easily come in 20,000 low.  I printed a stack of comps (two of them where our previous sales) and we will see if she ends up using them.

House #4 the appraisal came in at the purchase price and they are working with Bank of America for the loan.  Bank of America is really slow.  The 17 day full contingency removal comes up tomorrow, I sent them the form today and we will see if they send it back signed tomorrow.

House #12 is set to fund Monday, and record Tuesday next week.  If everything goes as planned I will be really happy as that is by far our best deal yet!  The buyer has put all the money they need to escrow (almost 50,000 down on an FHA transaction).  I guess that is what happened when they pay over appraised value.

That’s all for now.

We now have over 10 offers on House #13.  After isolating our 3 favorite offers we sent them all the same counter and the two responded quite interested.  We did some additional negotiation and one couple was going to re-submit their offer today.  The agent called and said the couple was going to withdraw their offer, they looked up the address on Megan’s Law web site and there is a convicted sex offender on the same street.

I’ve never really looked into this before, but I typed in a couple addresses and it seems like there is way more out there then I would have ever guessed.  Even in the neighborhood I live in there is quite a few of them.  The site is well done, you can type in your address and it has pictures and stars where the people live.

Does this change our buying strategy?  I think from now on I will look up any address before we buy, but don’t know if it will stop us from buying a property in a certain neigbhorhood.  It is sad to me that there are so many in each neigbhorhood.

Just another thing for Real Estate Investors to watch out for!

Well, I can’t really complain, but we listed House #13 Monday night and now (Thursday night) we have 5 offers all above asking price.  The market seems to be really hot right now and we are sure reaping the benefits, if only we could of bought more properties!

There are two other properties we have put in escrow, one will be our first rental house and the other will be a quick flip.  So things are still moving forward.

House #13 was finished this weekend, but I was on vacation so I waited before I listed it.  Our FHA 90 Days is not up until next Friday.  So we are in no rush to accept any particular offer, but we have been negotating with one that came in about $25,000 above our asking price.  The sad part is it will not appraise anywhere near that high.

I do not have great pictures on this property, but here is the quick run-down.

Before

After

Before

After

Before

After

Before

After

I am pretty happy with how it turned out, we have full approval from the inspector.  I will let you know when we put it in escrow and hopefully the process will go smooth!

The rehab of House #13 is going great, no major problems or budget over runs.  We could have been finished by now, but the FHA 90 day period is not up for another 3 weeks, so we aren’t rushing things.  We did a 175 sq ft addition (bathroom and walk in closet) to this house, which we probably didn’t need to, but live and learn.  The kitchen is the main thing that is not finished yet.  They are installing cabinets right now, granite tomorrow and carpet goes in on Friday or Saturday.

House #13 is very close in location to House #5 and the sales comps in this area have actually gone up a bit since we bought it.  We are going to do okay profit wise, but not make great money, we spent a little bit too much for the neighborhood, but sometimes that happens.

If you’ve looked through any of our pictures the color scheme is almost the same in all of our houses.   It’s kind of boring, but it makes our life easy and they look good.  Might as well stick with what works!

We didn’t just buy this one, I just “took a break” from blogging so you don’t know about this one.

Escrow closed April 24, 2009, it was a small 3 bedroom, 1 bathroom very close to House #5.  This house was built in 1954 and it has no master bedroom, so we decided to add a second bathroom and a walk in close off of the front room.  In hindsight, this probably was not a great decision.  Cheap properties are selling extremely fast right now, and eventhough a 3/1 is not very desirable it would of sold fast, especially if we priced it right.

It’s too late and we’re well on our way.

Here was the outside early on in the demolition process.

The addition adds 10 feet off of the house and here is what the layout looks like.

The funny part is the walk in closet addition is almost bigger then the “master bedroom.”  But, once again, it is what is is.

Repairs will probably be done at the end of June and we will have about two weeks before our FHA 90 day period is up.  We will list it and see how many offers we get.

Wish us luck, I will upload another set of pictures when it is done.