As of yesterday, House #17 is sold.  This one took two escrows and was a bit difficult to make it happen.  We got a cash offer, and right as we finished negotiating the buyer had a stroke, so he had to withdraw the offer.  Later we go a conventional offer, with $150,000 down, from an experienced agent.  We opened escrow and they made it to the inspection stage, but I guess the buyer’s father “helped” the inspector do his job and ended up calling out a bunch of stuff that became really “nit-picky.”  Looking through the inspection we agreed to portions of it, but refused to fix certain items, so that killed that contract.  And finally we hit out 90 day’s of ownership and started looking at all the FHA offers we received.

We narrowed it down to 2 offers with very similar qualifications, issued a counter to both of them and eventually decided to move forward.  It took about 45 days to close escrow, which is a big longer than I was hoping, but that 45 days was through Christmas and New Years.

Now to the numbers:

We sold this house for 23,000 more than our hard money lender appraised it for 5 months ago.  Our purchase price was 57% of the sales price and our repairs were 12% of our sales price.  We owned the property for 147 days.

We just got our third offer on House #17 today, and it was almost full-price cash.  The family is wanting to move closer to their sick mother and sold their house closer to LA.

This is not the first offer we have received on one our properties, someone gave us a cash offer on House #11, but we had already accepted another offer, so it was too late.

I issued a counter to this offer pretty quick, nothing major, just named the escrow company and increased their earnest money deposit a little bit.  They have not sent back the executed counter back yet, so we will see what happens.

I do have two other offers in, one is higher and one is pretty close.  They did offer a 15 day close of escrow, which would work for us and definitely save us some closing costs.   Hopefully we can get escrow opened up on Monday.

The marketing is a bit slow on House #15.  Our FHA 90 day period is just coming up, so we started marketing the property to FHA buyers.

Last night, we got an offer faxed to us for House #17.  The offer was about $20,000 under our list price, but the buyer seems very strong, $150,000 down and with conventional financing for about the same amount.  I have not issued a counter yet, I think I will wait until Monday to see if any other offers come in.

I never publish the lock-box combos, so every real estate agent has to email, text or call me to get inside the property.  This gives me a great feel for how many people go to the property.

• Friday, I got 4-5 phone agent calls.
• Saturday, I got at least 10 calls, 3 emails and 5-6 text messages.
• Today, it’s 11am and just one phone call so far.

Judging, by the level of interest, I would expect to have a couple more offers on Monday.  If we don’t I think the property is a bit over priced (which it very well could be).  It is very odd, whenever I list a hot property it seems like we get very little action or offers for the first 5-6 days, after that we get a ton of action.  So I am slowly learning not to get discouraged about not receiving any offers until it has been listed at least 10 days.

I am sure we will have appraisal issues on this property, but that is partly why I like how much cash this buyer has.  If they agree to pay over the appraised value for the property it will eliminate most of my fears.  I’ll let you know what we decide…

About a month ago some of the workers told me a city vehicle drove past the property and was taking pictures of it.  For obvious reasons this concerned me but I hadn’t heard from anyone so I forgot about.  Until this morning, right after I made the Before and After post I got a voice mail on my cell phone from a lady at the city office politely asking for a call back.  House #17 is in a city with a very aggressive Code Enforcement department.  The residence I live in has had violations for over-grown weeds in the trail behind us (which supposedly we are responsible for).

I weighed my options, should I ignore the message, should I be proactive and call back?  After thinking about it, I figured if we did something the city didn’t like I might as well deal with it right now.  After getting through to her extension I left a message with my contact information.

Fast-forward to the afternoon and I get a call from Mary.  She told me she was calling about House #17 and wanted to compliment us on the job well done!  Wow, all the possibilities that had run through my mind earlier, I definitely was thinking she was going to thank us for fixing the house.  I figured at best I could negotiate to a warning for something we had done wrong.

She had an active case on the house because it was abandoned by the previous owners.  I guess she had called the listing agent and they mentioned that they sold it to us and because of the past projects we have done she said she remembered our name and was going to give us a chance to fix the property.  Anyways forgive me celebratory post, but I thought I just had to share something.

I am trying to get some pictures taken of some of the properties we have in escrow.

We have completed the rehab on House #17.  It turned out very good and everyone who has seen it so far is definitely impressed.  Now we just need some conventional offers!

Escrow closed on this property in early September so we still have almost 60 days left before we can sell it to an FHA buyer.  We are willing to wait, but because this is in a higher end neighborhood we have listed it and we will see if we can garner any offers.

The rehab was slightly over budget, I am still crunching the number to figure out why, as the rehab went very smooth.

Without further adieu, here are the before and after pictures:

Front of the House

Before

After

Kitchen

Before

After

Main Bathroom

Before

After

Den

Before

After

In Progress Picture

The farther House #17 comes along the more I like it.  Here is the latest picture from today.  We put stucco over the bricks on the garage on added stucco and some design over the pillars that hold the porch up.  Obviously, we need to do our color cote on portions of the stucco still.

Originally, I thought this was going to be kind of a tight deal profit margin wise, but if we can get it to appraise we will have no problems selling it.  It is in the same city House #1 was in, and even though they are about 2 miles apart this house is 500-600 sq ft bigger and located in a better area.  We are planning on putting it on the market for $20,000 less than we sold House #1 for. Maybe a sign of how much pricing has fallen in the last 12 months.

Before Picture of the Front

The Front (Before)

Here is a picture of the kitchen.

That is all for this evening.  Sorry these pictures are not the best!

Just a quick post for today.  We closed escrow on House #17 about two weeks ago and we are already rocking away on the interior paint.

The previous owners added about 500 sq ft that was permitted, but the roof they had needed to be totally redone.  We have finished this.

Kitchen cabinets, bathroom tile and the last of the framing is going on today.  In total we have 9 laborers on the site (which I think is a record).

The house should be done by the end of next week and we’re hoping to get in on the market while it is still hot.

This was a productive week for us!  We put three houses under contract and I think we will probably get at least one or two more next week.  House #18 pictured on the right is a total mess.  The layout is terrible, it is missing a kitchen, and it got 15 offers on the first day, I’m sure most of them above the asking price and somehow we got it.  That’s how crazy this market is.

House #17 we have been working on for a long-time.  It has gone to highest and best three times, with us missing every-time and for whatever reason the buyer always ends up walking away.  It is a 4 bedroom, 2 bathroom house that needs a lot of work (probably a 30,000 repair).  The kitchen needs complete renovations and it needs some major TLC everywhere else.  Overall, the layout is acceptable so we do not have to do anything too aggressive.  It is in a much better area than our main market, but we love to buy houses in this city at the price level we got this one.  The other exciting part is, the REO office that sold us this property, is probably the biggest on in the area.  So we are hopping to close quickly and impress them and do a lot of business with them.

House #18 is a 4 bedroom, 2 bathroom with about 1,400 sq ft.  As I said above the layout is terrible.  We have some big ideas for this one we are going to move the interior layout a bit and add a “true master bedroom”.  We also bought this one from a biggish REO office and are hoping to do a lot of business with them as well.

That makes for a very exciting week.  We don’t want to get to many because we think that inventory levels are going to increase drastically around November or December.