Things are going better on House #29.  As I posted earlier, the company that sold it to us is very un-organized and in charge with lining up the retail buyer.  We put some extraordinary pressure on them and they had their Buyer do some things that showed us a lot of confidence.

The Buyer removed all contingencies and agreed to make his $40k+ deposit non-refundable early on in the process (before appraisal or loan approval).  He also agreed to buy the property as-is and without a home inspection.  I felt kind of awkward asking for these things and expected a negotiation, but they send the signed docs back shortly after.

Since the Buyer has got loan approval and we should be getting loan docs by tomorrow.  So this house should close by the end of the week.

Here is a video tour I took of the house last month.

I don’t know how much I have written about it, but we bought House #29 from a wholesaler.  The deal was not stellar, about 70% on the dollar with 3% for repairs, but it came with a buyer that is paying about 95% on the dollar retail.  The wholesaler did not have the money to float the escrow for 45-days from purchasing it, to waiting for a conventional loan to be approved.

So they basically offered us most of the profit as long as they got to collect commission on the purchase and on the sale.  We agreed and moved forward, but from day 1, I was un-easy with this company.

They are a local firm, they have an office and I would estimate 5-6 employees.

Complaints I have

1. The escrow company they used is very slow
We wired money after Christmas to close our escrow, but the property did not get recorded into until Jan 15.  So that basically delayed us 2.5 weeks.

2. Communication from the wholesaler
I think they used flash funding (sometimes called transactional funding), to close their escrow for 1-day.  For some reason, they didn’t want to disclose why they needed all this extra paperwork and my money to sit.  I wish they would have been upfront with me. Every time I would call with questions, I would speak to someone else.  This made a relatively simple transaction difficult.

3. Weird Excuses
When I complained to the owner about the speed of the transaction, he basically said they are “We are a really big company and sometimes that makes transactions slower and more complex.”  I still don’t understand if that comment is the owner trying to impress me or he truly believes that is why things happen so messy.

We will see if their buyer can perform.  If they do, it will be worth the trouble.  The funny thing is, all of my complaints would be very easy to fix.  If you have a good team (escrow company) and decent communication I would be a happy customer.

The good news is, if the buyer does not perform, I can sell the house at 100% or 105% of market value and make a little bit of extra money (although my ROI would probably go down).  So it is a good house that I got at a great price.

I’ve been promising I would post more, but just have not had the energy or anything real exciting to write about.  We have got some properties, I will quickly write about.  But generally speaking, I am busy trying to buy more, get everything rented out and run the other business ventures I have on my plate right now.  Definitely a very busy time for me, but everything is going well.

House #28 – This house is not in the best neighborhood at all.  We got a decent deal on it, will make a good rental and cash-flow.  One of our network agents called me on this property and we got it right at the list price.  It needs some minor repairs.  It is a 3 bedroom, 2 bathroom house that is 1,000 sq feet.  We are just painting the inside right now, so it should be done shortly.  As I mentioned earlier this property is in a different city than our farm, so we have tossed around the idea of selling it, but we are still unsure of what the best plan of action is.

House #29 – This house is a first for us.  The first house we bought from a wholesaler.  It is a 4 bedroom, 2 bathroom house and just over 2,000 sq ft in a really nice area.  The wholesaler who sold us this property has a retail buyer lined up already, but they do not have the funds to bring to hold it 30-45 days to wait for their buyer to get approved for a conventional loan.  So ideally, the hold-time on this property should be under 45 days and we should see a nice 15-20% return.  This house is being sold completely as-is, so no repairs will be done.  We are working with a partner to bring in some of the funds, so this deal is not 100% ours.

House #30 – No pictures yet, but this is going to be a great rental property.  It is a 3 and 2, on a small lot, built in 1985.   No HOA fees.  I do not know how we got this property at such a great price.  My guess is, we put it under contract between Christmas and New Years and many investors took that time off from looking at property.  As you can tell, I am excited about this one, I wish all our rental inventory could look like this!

House #31 – This house is going to be another rental.  This house is cheap, but the neighborhood is just so-so.  We are going to keep the rent cheap and should be able to get a good tenant pretty quick.  It needs very few repairs.  This house is on the same street as House #22 (actually less than a block away).  No pictures yet.  We are actually set to close on Tuesday, so I should probably get out there and take some pictures!

As for the sales:

House #17 – Loan docs are drawn and we should close this week.  The buyer’s agent has turned about to be very in-experienced which has made more work for me, which is frustrating.  I am thinking this is her first deal (she is asking how utility companies switch owners, so they don’t have to pay my bills).

House #18 – We had to do some minor repairs to the roof, we should get loan docs on Tuesday and close by Friday.  I am more comfortable with the people in this transaction, everything has been going pretty smooth so far.