I just finished listing House #32 on the MLS.  The rehab went smooth, we ended up framing in a fourth bedroom and it turned out really spacious.  Next time I’m out that way I will take a video of it.

The kitchen turned out great and overall, I like the house a lot.  Great neighborhood with a spacious layout, but I am a bit bias.

Front – Before

Front – After

Before – Porch

After – Porch

Before – Kitchen

After – Kitchen

Before – Fireplace

After – Fireplace

Before – Bathroom

After – Bathroom

Before – Hall

After – Hall

Update on House #30

We rented House #30 to some great tenants on Monday.  We broke down and put it in the MLS and got a ton of interest and phone calls, but at the end of the day we ended up renting it to someone who called from the sign.  They gave a full deposit, plus a non-refundable pet fee.

Escrow for House #16

House #16 is by far the oldest non-rental house we own.  The buyer has approval and the bank is drawing docs and going to send them to escrow.  So it should be closed by the end of the week.  That will make House #32 our most recent house in “work in progress.”  That is great we are happy with how lean we are running on inventory right now.

Update on Acquisitions

We have been making offers like crazy lately.  In the last couple of weeks we put three in escrow, two are firm and one is a short-sale and we are waiting on the bank to approve the HUD.  I think it looks good.  They’re all pretty great deals, but we are shopping very hard for about three more.  I have a 10 day vacation for April so I want to make sure we get a head start.

Happy buying!  Wish us luck.

Well, if you read my last post you probably know what I think about most real estate gurus.  I do believe in that a strong team can save you a lot of money, but it doesn’t happen overnight.

For House #16, we put it into escrow on Tuesday.  Last week I sent a informal counter-offer to 5 out of the 8 offers we received.  Basically, explaining how we do things, what we are expecting and what will help their offer stand out above the rest, since the 5 offers all netted us within $2,000.

The three things that would help their offer stand-out:

1. If the Buyer is willing to pay their own closing costs. Since we deal mostly towards an FHA clientele, this is always a tough one.

2. If the Buyer would work with my lender. This is pretty self explanatory, but important.

3.  Escrow must be Seller’s choice.  This is also pretty self explanatory and it is pretty common for the Seller to have their pick of services in this market.

Surprisingly, only two buyers responded.  One raised their offer by $5,000 and the other offered to raise their offer $5,000 and use my lender.  All other things pretty much being equal, you can probably assume which Buyer we choose to work with.

Now the fun parts, this is where things get easy:

1. I call the lender I use and ask him to schedule an appointment with the Buyer and pre-qualify them.

2. I call escrow and let them know the address and the details.

3. The next day the lender calls me back and lets me know the Buyer is easily qualified and he has ordered an FHA case number and had the appraiser give him a verible that she can get the property to come in at contract value.

4. The lender ordered a second appraisal from day 1, so we will not need a review appraisal.  Some banks allow this, since he is the branch manager with a direct lender, his bank rolls with this.

So now we have an escrow with many of my team-mates involved.  If anything goes wrong, I guarantee their loyalty lies with me and they will not delay things.

How did I build this team? Along the way…

1. My escrow lady did a couple purchase transactions early on and simply asked for my business.  I gave her a chance and have not looked back since  (probably 30+ escrows later).

2. Title Insurance I never really get to pick, since I buy Title Insurance Binders that the Seller pays for when I buy property.

3. I have had quite a few loan officers “ask for my business,” this is my second time referring this one a loan, so we will see how it works.  This is always the hardest part to push people on.  But, always, always, always call the loan officer before you do a transaction! You ask them many important questions: “are you a direct lender?;” “are you investor friendly;” “what is the time-frame for a typical transaction;” “how are appraisals ordered;” “how often do review appraisals get ordered, and how;” “what will be the major hurdle for this loan;” “when will you have desktop underwriter approval;” “can you send me a copy of doc and funding conditions when you receive them;” etc…  Can you tell I ask a lot of questions?

4. The appraisers used are usually part of the lenders team, but they often-times do lenders favors.  So, if the lender wants to impress you, they will help protect you from the bad appraiser.

I think it is very hard to build a lot of these team members before you actually start doing transactions.  Everyone wants business, but it is really hard to see how you work together until you do a couple transactions with a person.

Now just for fun, here is the final walk-through of House #16

So Steve, you’ve owned this property for almost 5 months and haven’t sold it or given us an update?  Yes, it’s true, we have owned this property a long time and we just listed it on the MLS 10 days ago.  Why, well a lot of reasons, but no great ones.  We had a lot of different projects that always moved ahead of this one.  Since this was a big rehab that needed permits, we used it as our “utility project.”  Whenever our workers had no other work we sent them here, not the fastest way to finish a project.

This property started out at 1060 sq ft and needed a lot of work.  We added a second bathroom and permitted the porch.  If we bought this property 2-3 months later it surely would have gone into our rental pool.

Now let’s get to the pictures!  PS: a video should be coming soon.

Outside

Before

After

Kitchen

Before

After

Enclosed Porch

Before

After

Bedroom

Before

After

Bathroom

Before

After

We have 5 or 6 offers and it should be flying into escrow on Tuesday (since Monday is a holiday).

Sorry, the pictures are not that great for this one, we have been slacking lately.

I just got back from House #23 to meet the wholesale buyer and one of the “middleman.”  About a month ago one of my colleagues introduced use do one of the biggest wholesalers in the area.

He helped us sell House #21 and he is working on the duplex (thinking one of his buyers is going to submit an offer tomorrow) and he also brought in a buy for House #23.  This buyer said the deal was a little “too tight” for him personally, but was going to sell it to one of his friends.

Push comes to shove and there is myself, a wholesaler, another wholesaler and the end buyer in this deal.  Made things kind of difficult, but we finally all came together and got the property sold.  No one is making that much money, but it was just enough to make it happen and we are going to move on.

This buyer is going to close my escrow and I am going to give him a copy of the deed in exchange for our commission.  He is going to record the deed at the county himself, that way we do not have to do two escrows.  I am excited that it looks like I can really ramp wholesaling up, and we are working a ton of rehab houses right now.

House #19
We put in counter tops today, we need to put in french doors and it should be rent ready by the end of next week.  We ended up fixing this place up way too nice to be a rental property, but lesson learned, oh well…

House #18
We have almost ten guys working at this property yesterday and today and we finished what we needed to and are going to start painting tomorrow. It probably is 2 weeks from completion.

House #20
This is going to be a rental too and we are really trying to keep a tight budget for this house.  It is huge, almost 2,000 sq ft and really a great property.  We finished our plans and we have a crew starting demo there tomorrow.

House #16
This one is a bit on the back burner… we are trying to finish some of the rentals up and we should have this one ready right around our 90th FHA day.  Demo is done.

House #22
I closed escrow on this one yesterday.  We need to make plans, but one of our workers wants to rent it.  We’ve agreed to a number so now we just have to get it ready for him.

Just a quick note for today, but I thought we where supposed to close House #16 yesterday.  I tried calling the escrow office three times and never got a return phone call.  After that, I called the Listing Agent and asked him what the deal is, he said he would call and get some more info.

It turns out the escrow company involved lost the Grant Deed the bank gave them.  So now the owner (the bank) has to get the Grant Deed re-notarized, send it to escrow, and escrow has to send it to the county.  So best case scenario we will record on Wednesday.

This is frustrating as we have all the money sitting in escrow, waiting for the property to close.  The Listing Agent told me the bank is absolutely furious over this mistake, as they should be.  But, they picked the escrow company, and I would imagine they will not be picking them again for a while.

House #18 "Kitchen"

Tomorrow we are closing our purchase escrow on House #16 and House #18.  We probably will not start the rehab process for 30 days on either though.  Both are likely going to go to an FHA buyer and we need to wait 90-days to sell to them, due to the 90-Day FHA Rule.

House #17 should close Friday next week if everything stays on track (who knows if it will or wont) and as soon as we close escrow on this one we are going to start the rehab.  It is in a good better town and there is a chance we can sell this one conventionally.  So we are going to make this the top priority and hoping to have all the remodel done by the end of September.

It everything goes as planned, House #4, House #12, and House #13 should all close escrow this month, which will be a nice surprise, if it happens.  We are out shopping for more properties and would like one more flip and two rentals in September.  It sounds like we are going to get another one under contract tomorrow (it’s on the same street as House #18) and it has almost 1-acre of land.

Well, today was a pretty good day in our world.  We finally closed escrow on House #14 today!  And we broke out of our rutt and finally got a contract accepted.  The deal is good, but not great.  It will depend on what the market does this winter.

It is a 3 bedroom, 2 bathroom house in a decent neighborhood.  We are planning to flip this one and not add it to our rental pool.  It needs quite a bout of work, our rough estimate is about $30,000 but we have not done our final budget yet.

The listing agent we bought this one from is not an agent we have worked with before, so hopefully we can start a relationship with their office too. The agent had me digitally sign the contract with a system called DocuSIGN.net.

With the phone calls we got today we are expecting to get two or three more accepted offers this week, that has us pretty excited, but it hasn’t happened yet so we can’t be sure!

Everything else is moving along…