So much has happened in the last few weeks! I'm behind in everything.
To start, the CA condo went up for sale 2 weekends ago. I posted before pics in a previous post. BB and his friend went to CA for 10 days and added new floors throughout, repainted every surface except the cabinets, had the heating replaced, changed all fixtures and had the place professionally cleaned.We had a stager come in and finish off the place to get it ready to put on the market.
Here are the after pictures:
We recieved an offer $20k below asking within 3 days and countered at $3k below asking. They did not counter back. Then 3 days ago we recieved an offer $3k OVER our asking price!
There are some issues for concern. The buyers want to use an FHA loan, and this HOA FHA eligibility expired a few months ago. The realtor is concerned about getting an appraisal to support the purchase price. Before this offer, she really pushed me to be happy with a purchase price $10k below asking. I thought our asking price would be a no brainer easy to get, but she had a lot of hesitancy. And now she is worried about the appraisal. Also the buyers are purchasing AS IS, but you never know how the inspection will turn out. But those are out of my control, so I am letting the realtor handle it.
In other news, on my side of the country, BB has been working hard on his new rental property. The downstairs unit has been complewtely repainted, recaulked, new bath vanity, smoke detectors and some window fixings. The roof has been repaired. The place was listed on Craigslist for rent since Sunday and we have 2 showings set up before the weekend.
Here are pictures of the downstairs unit:
So this weekend, BB and I will get the upstairs ready to rent. The upstairs does not need nearly the work the downstairs needed.
And then my work has been exhausting me. My boss is out this week b/c he had twins over the weekend. I unofficially took over his job as best as I could. I simply dont have enough hrs in the day to get everything done. I knew this would be a tough week, but I have put in 40 hrs in 3 days! Thursday and Friday will be pure overtime for me. I was so stressed today, I almost cried. But I didnt. I now have so many people to report too...I leave the office every night in good shape. I have a to do list set up for the next day and it seems managable. Then throughout the day there are so many unexpected phone calls, so many unexpected interruptions, and so many more people emailing me for updates! Asking when X report will be done, when I last did Y, am I going to do W, why hasnt Q been done. OMG I cxould get everything done in the day if I didnt have 5 people breathing down my neck constantly requesting updates. And I dont think the 5 people are very aware of each other...they think they are the only person I am reporting to.
But it is a great opportunity for me. I am being given responsibility to handle things way beyond my authority level, and aside from not getting things done fast enough to please my temporary bosses...there have been no catastrophes. Well, there were an unusual amount of catastrophes last week that I'm still cleaning up this week...Aand that is slowing me down too. But thankfully those issues cant be attributed to me taking over and making mistakes. They were problems that had been building and we couldnt contain them any longer.
Ugh. I wish I had more time to focus on the Real Estate. But right now I really trusting people around me so I can focus on work.
It feels good to vent.
So much has happened in the last few weeks! I'm behind in everything.
A lot going on right now, I'm writing to just organize my life.
On the property side of life...
BB has returned from California. The job remodeling ended up being way bigger than we anticipated. New paint, flooring went down in every room, the heating was replaced, new faucets, light fixtures and then cleaning every surface.
I have not yet organized the receipts to get an idea of the cost of this trip. Including airfare, car rental, food, I am guessing in the $7-9k range.
BB and our friend spent about 8 days working on the condo getting it ready to list. They had 2 full days to play. They enjoyed the Haight Ashbury area of San Francisco but really loved the Redwood forest.
So the property went on the market a few days ago. Yesterday there was an open house and I am told 9 couples came out to view it.
I've got a few more papers to sign, send back and then that place will be off my priority list and fully in the Realtors hands.
We close on the Chocolate house Monday. The lawyer found a problem with the title and the bank needed a few days to get that cleared up.
BB has lined up a few contractors to make repairs, updates next week and we are hoping it will be ready to rent by the end of the week.
Renters move into the upstairs unit of my other rental in February. January was a tough month to go without renters, but I have learned to show the units after they are vacant. Showing while the old renters are still occupying the unit hoping for a seamless transition does not work for me. The unit is generally filled with dirt, chaos and does not show very well. So I wait till the old renters move out, clean it up and show it. This means a few weeks of vacancy, but saves me the hassle of giving 24 hr notice to the renter, and then showing it 10+ times. When it's vacant, it rents easily. This time I only had to show it 3x.
When BB returned from CA his back was really in pain. We went to FL to see his back Dr to get injections to reduce swelling. BB is feeling better now. But he still cant do much around the house.
We are waiting on Cobra paperwork to fill out for his health insurance. I think the old insurance ran out in early Jan, and we need Cobra to cover these injections. On Monday, BB will call to see where the paperwork is.
I ran the numbers last night to get a sense of our 2012 income verses 2011 income (when BB was employed). We are short about $2400.00/month even if we count the full $3k of new rental income.
There are a lot of variables that changed besides losing BB salary. He recieved bonuses a lot which averaged to about $1k a month. Our health care was free. His employer matched 10% retirement contributions.
We were collecting rent from the CA property as well. The property that is now up for sale.
But on the flip side...selling the CA property...I plan to pay off my primary house mortgage, HELOC and CC bills, reducing my expenses about $2k a month.
And once those are paid off, I want to refinance our mortgage on our first house from a 5.5% rate to maybe a 4% or whatever I can get. That will reduce the mortgage by maybe $100.
So although we are losing a significant income with BB job loss, we can still pay our fixed monthly expenses. I am anxious to get everything settled so we can get a feel for our new financial normal.
So..the big news is that it appears we are buying the Chocolate House. We are taking the plunge and BB is going into a real estate career pretty heavily.
The last post stated that we had countered the banks counter offer by increasing our 1st counter offer by $1k.
The bank accepted!
I think we had a good negotiating hand because we made the first offer a few days before Christmas, and we negotiated through until we had an accepted offer about 2 days after christmas.
We didnt plan it that way, but we knew we had a strong hand because people are not looking at properties during the holidays, so it was unlikely there were any other showings around the time we submitted our offer.
On top of that, it rained for 2 days over christmas and we were able to make sure our realtor indicated to the banks realtor that there are water marks on the ceiling from the roof. We already knew the roof needed attention and built that into our offer, but since it was raining during negotiations, we reminded the bank that there are more water marks growing by the day! (There are not really, but the bank doesnt know that.)
So it was lucky timing for us.
We close in a few weeks, whenever the bank is ready, we'll be ready. We offered a 10 day closing, but have heard the bank wont be ready in time. Works for us.
So far we have had the pest guy out there, no termite damage.
A roofer is coming out in the next 2 days to give us an estimate.
The Air/HVAC is being inspected tomorrow.
The home inspection is scheduled for Wednesday.
The electricity and water was just turned on. BB and I did a walk through to see what is needed to get it renter ready.
The place is missing a lot of ligh bulbs, faceplates and some broken windows. One floor washer/dryer needs to be replaced, and a faucet downstairs. And several rooms need to be repainted.
When everything is done, I'll post pictures!
There is a local private college in town that fills most of the city rentals. We are hoping to rent each unit to the students. I doubt many students are looking to rent in February, but I think we'll get it rented to someone pretty quickly.
In other news, the tenants moved out of the upstairs unit of our original duplex (my Heart House). I'm not sure when they moved because when I went by this morning it was vacant. They never called to say they were going.
So BB and I worked for 3 hrs today cleaning the unit. It took longer than expected, and we did an inventory of some biig expenses coming in the next few yrs. But for now, we just needed to get a new stove and kitchen light. We ordered a stove for $360 and it will be in on Saturday. I picked out a pretty brushed nickle light for $130 to replace the pretty gross flourecent light.
I listed the place on craigslist today.
I saw the downstairs tenant (2 single guys) and they have requested pretty girls for the upstairs. I told them they have a 50/50 shot!
I hope the calls come soon!
Well 2012 seems to be here and my life did not get sorted out before it arrived. So I'm going to set some goals, though I feel like my life is still unpredictable and might head in wild directions.
Goal 0: Implement CA plan. This is to sell CA, pay off our primary mortgage, CCs, HELOC, lawyer, and find a safe place for the remaining money to rest.
Goal 0A: Get a lawyer to draw up paperwork sorting my inheritance from BB's financial contributions. My inheritance is my money unless I mingle it, which I have by putting so much into real estate, and BB has agreed that we should seperate it on paper to put my mind at ease.
Goal 1: build up a $5k emergency fund for each property we own.
Goal 2: by May 2012, go back to saving $200 month for a replacement BB car.
Goal 3: Start horse riding again.
Goal 4: Start a ROTH IRA for BB so he can save for retirement.
I guess those are my goals. My head is mostly filled with plans and it's hard for me to separate the two, though I do think it is important to create both plans and goals.
I try to look down the road and envision what I want next Christmas to look like, but it's so fuzzy. I'm still wrapping my head around the changes going on. BB retiring from baseball and going head on into a real estate investment career.
But that means good things are on the horizon. BB has found another career hes really passionate about. We just need to do it right.
Happy Holidays everyone! I enjoyed reading everyones Christmas blog and hearing about their family celebrations.
BB's father came down here to GA for a week and we spent the day watching movies. Relaxing day for sure.
On the real estate front, I last stated that we were going to look at a property for a rental income.
We went and saw the place that day, it is very impressive. I call it "The Chocolate House". It is painted a chocolate brown with white trim. It is a duplex and with 4300 sq ft it is huge! One of the biggest duplexes I have seen in the city. The upstairs is 5 bd 2 bath, and the downstairs is 4 bd 2 bath. It needs to be cleaned up, fresh paint and it'll be ready to rent.
It's a foreclosure listed at $189,900. We put in an offer for $165,000 with 10 day closing. The bank countered at $185,000 and asked for 10% earnest money.
We have countered at $170,000 with 10% earnest money. We are waiting to hear what the response is.
We went out and looked at it again 2 days ago to double check everything before we countered. We went over it as thoroughly as we could. It has been winterized, so the water and electricity is off. But assuming those areas are good, for work we found:
Thorough cleaning/touch up paint needed
Washer/Dryer upstairs needs to be replaced
Stove downstairs needs to be replaced
Upstairs toilet missing
Upstairs kitchen sink faucet needs to be replaced
Some porch boards needs to be replaced
The biggies is the roof and siding.
The roof might be leaking in spots. Because there are water stains along the outer edges of the ceiling. It is either the roof or the gutters are not working. We'll get a roofer up there if we go under contract. If it can be patched for a year, we'll be ok. If not, then we wont buy the house.
The siding. The paint is peeling pretty bad. It could use a paint job today. But can wait a year or two. The siding has not yet been impacted by peeling paint so no rot.
We think we can rent the upstairs for $1600 a month, and the downstairs for $1400 a month. With a $3,000 income, we will put $1k a month away for future repairs, $400 for taxes and insurance, and that will leave $16oo cash flow for the investor.
If we save $1k a month for 9 months, we can put on a new roof. After that, if we save $1k a month for another 7 months, we can repaint the whole house. So the big items will be taken care of in the next 1.5 yrs.
The next big question is the electric/plumbing/HVAC.
We feel that paying $170k plus $5-10k in repairs/closing costs is the very top of what we can afford. So if any of the systems are out, we are not going to go forward.
The reason we feel good about this house is because a very high end investor owned the property and restored it before he went into foreclosure. He had a reputation to use high end rehab materials and saw his projects as a restoration of the community. His vision was in line with mine, to have a quality product that will last a long time and add to the value of the area.
So we feel optimistic about the systems.
In the meantime, to keep BB from having his heart set on this property, we have tried to find back up properties.
We found one yesterday that we thought had already sold. We saw the "For Sale" sign out front and checked online. It had sold in Nov, but the deal fell through so it's back on the market.
The duplex had belonged to a contractor friend of ours in 2009. So now we refer to it as "Jason's House" We had dinner there once. He lived in the top floor with his wife and son. A few months after we met him, his wife got a job in another state and they moved.
The house did not sell and went into foreclosure.
The current owner bought it for $130k and now has it listed for $200k.
We walked around it yesterday and looked at the pics online, it does not need anything to make it renter ready. Actually, the bottomn floor is already rented for $1400/month. It's 3300 sq ft.
BB called our realtor today and learned that the new owner put alot of updates into the house, and thats why they are asking $60k more than they paid for it.
So thats a bit of bad news. We were hoping there was a lot of negotiating room. Noneless, we are going to look at it today.
If the numbers figure that the Chocolate House and Jason's House are the same all in, then we'll be on an even playing field and I'm not sure what we'll decide.
But having Jason's House enter our conversations has really calmed BB. He is much less into the Chocolate House now and he's being more conservative with what he is willing to pay for it.
Thats exactly what we needed, so even if Jason's house is a no go, it accomplished my goal of showing BB that there are new opportunities everyday and we dont have to be fixated on one place.