Here’s a quick recap of our accomplishments:

• 24 Houses Purchased & Resold (Every One Profitable!)
• 5 Mobile Homes Purchased and Resold (4 out of 5 Profitable)
• 2 Houses Held as Rentals for Short Periods

Of the 24 houses that we purchased and resold, the level work completed breaks down as follows:

• 18 Full Rehabs
• 2 Minor Rehabs
• 4 Wholesales to Other Investors

In addition to the 29 deals that we did directly, we’ve also started carving out a niche helping a couple other investors with their rehab and resales. My wife has staged nearly a dozen other properties for other investors (including a model apartment for an apartment complex), we have managed several rehabs and we have listed and sold several properties for a couple very select investors.

Some financial statistics of the 24 houses purchased and resold:

• Total Profit on Flips: $478,083.10
• Average Profit Per Flip: $19,920.13
• Minimum Profit: $3,416.21 (House #1)
• Maximum Profit: $40,487.06 (House #16)
• Average ROI: $94.37%
• Average Annualized ROI: 421.80%

Also worth noting is that by having our own real estate licenses, we have saved or earned over $82,400 in commissions over the past 3 years. That about one-sixth of our total profit.

Of course, those numbers don’t take into account the cost of employees (myself, my wife and our project manager) nor the overhead costs of the business. Between the costs of being real estate agents (my wife and I), the cost of equipment, vehicle maintenance, staging furniture, etc, we actually spend a good bit of the profits, though I don’t have the exact percentages. So, don’t assume the numbers above are what we’re taking home — it’s a pretty good business, but not that good!

In terms of our rehabs, here are some interesting statistics:

• Average Purchase Price: $47,541
• Average Rehab Costs: $24,242
• Average Rehab Project Time: 28.5 Days
• Average Sale Price: $101,108
• Average Hold Time: 103.4 Days (not including the two rentals)

One of the places where we’ve been tremendously successful is in marketing and selling our properties in this tough market. While many investors have properties sitting for months on end and/or selling for far below what they expected, so far we’ve been very good at getting properties sold quickly and near our expected sales price:

• Average Time From List to First Contract: 17.9 Days
• Average Time From List to Final Contract: 43.0 Days
• Longest Time Property Took To Sell: 184 Days
• Shortest Time Property Took To Sell: 0 Days (Twice)
• Average Sale as % of List Price: 95.2%

Probably my favorite stat above is the 95.2% of sale price to list price. This means that on average, we sold our houses for over 95% of what we *ORIGINALLY* listed the houses for. Even in rare cases where we had to drop our prices, the average was still tremendously high.

Lastly, it’s nice to know that we’ve had a small little impact on our local economy. In addition to rehabbing 24 properties, which inherently improved the neighborhoods where we buy, we spent a good bit of money doing so:

• Gross House Purchase Costs: $1,141,000
• Gross Sales Revenue: $2,426,600
• Total Spent on Contractors: $465,000
• Total Spent at Home Depot: $117,000

It’s amazing that in three years, we’ve bought and sold over $3.5M in real estate and have spent nearly $600,000 on renovation costs.

This was a long and sometimes frustrating project, mostly from the perspective of trying to sell it. In all, we had dozens of interested buyers, six formal offers, three contracts, and of the six months it was for sale, it was actually under contract about five of those months (just waiting for closings that never came). In the end, we did well with this one, and more than achieved our profit goals; but the fact that we held this property for nearly 8 months has detracted from our feeling of success.

Part of the problem is that, while the house is beautiful, the neighborhood is less so. It’s not a bad neighborhood, it’s just very “active.” Lots of people at all hours, lots of cars parked on the street (and on the curbs), etc. Because the roads and driveways are all narrow, the excessive number of people and cars makes the neighborhood feel very cramped and confined. This is part of the reason why we had so many more interested buyers than contracts; many of the buyers were wishy-washy on whether they wanted to live in the neighborhood.

We’ve already sold two properties in this subdivision — The Hat Trick House (Final Analysis) and The 16-Bid House (Final Analysis) — and we’re now completely out of properties in this neighborhood. Given our overall success with these three properties — we’ve earned over $60K in profit for very little work — we’ll definitely consider future purchases in this area, but for now, I’m glad to be done in there.

Anyway, here is the run-down of the project results, with the final set of statistics at the bottom…

Timelines

The total holding time on this house was 232 days. Again, most of that time the house was under contract, but still, it’s not fun having to go back to the same property day after day for 8 months waiting for a buyer who is able to close.

Here are the key timeline milestones:

• Purchase Offer Date: 1/12/2009
• Purchase Closing Date: 2/12/2009
• Rehab Completion Date: 4/1/2009
• Sale Listing Date: 3/31/2009
• First Sale Contract Date: 4/17/2009
• Final Sale Contract Date: 9/16/2009
• Sale Closing Date: 10/2/2009

Financials

We were able to sell this property for $104,900, just $5,000 less than our originally asking price. Our first offer was full-price, so we were disappointed to not ultimately sell for full price, but given the length of time we held it, I’m not complaining. Our total profit after all fees, commissions, rehab costs and other expenses was just under $29,000, which I’m thrilled with given the long selling period.

The rehab was pretty small, with total expenses at around $17K. We were hoping to keep it to $15K, but with multiple contracts and multiple requests from different buyers, we ended up spending a few dollars here and a few dollars there that were unexpected. Ultimately, the final buyer decided not to have an inspection (we gave her a copy of a previous one), so there were no requests for repairs or concessions after the final contract was submitted; that said, the final contract asked for about $1500 in furniture to stay, so that needs to be taken into account as well.

Here is the breakdown of financials for this project:

While these numbers don’t reflect the final holding costs — the final utility bills, a pro-rated loan-payoff credit and insurance refunds have not been received — the final results should be a few hundred dollars higher.

In terms of ROI, my total investment into this property (Purchase Costs, Rehab Costs, Holding Costs) was $23,542; this puts my ROI at over 120%, and adjusted for the time this project took, my annualized ROI is over 190%. This ROI is a bit lower than what we’ve gotten accustomed to, but again, I’m not complaining.

Final Statistics

Here are just some of the final statistics that I’ve been tracking for all my projects, and that summarize the success/failure of each project pretty well:

• From Offer to Purchase Time: 31 Days
• Rehab Time: 44 Days
• Selling Days on Market: 17 Days
• Selling Close Time: 16 Days
• Total Hold Time (Close to Close): 232 Days
• Total Profit: $28,679.49
• Return on Investment (ROI): 121.82%
• Annualized ROI: 191.65%

But, unlike the previous four offers, I’m actually confident that we’ll be able to get this one closed. The buyer submitted the offer this morning, and gave us a deadline of about two hours to accept it or counter-offer (obviously they are anxious).

It was a very good offer, but they wanted a good bit of our staging furniture as well. Unfortunately, some of that stuff is irreplaceable, as my wife found some perfect pieces of furniture on Craigslist that she hasn’t been able to find anywhere else. So, we counter-offered with all the same financial terms, but taking out about half of the furniture that they had requested. They quickly agreed to the counter-offer, and we now have a binding contract.

The best part of this offer is that the buyers are not FHA. While it doesn’t matter from a timing perspective (we’re well past 90 days that we’ve owned the property), their conventional loan can close much more quickly and will only require a single appraisal. Plus, the buyers are allowed to select their own appraiser (and have asked our recommendation), so we shouldn’t have to worry about any appraisal issues.

The buyers have 5 days to do their inspections, and want to close on September 30 — two weeks from today. I don’t think we could have asked for anything more than that…

Btw, that now makes four properties we have under contract and scheduled to close in the next three weeks…if all four close on schedule, we will officially be out of properties to work on, other than The Poor House, which we officially purchase next week…I guess that’s a good problem to have…

Anyway, I think it’s been about a month since I’ve done a general update on all the properties and business activities, and with everything going on, I feel like I’m falling behind by only posting on one topic per day. So, here’s an update on where each of the properties stands, and what is going on with the business:

House #1: The Corn House

We have our lease-purchase buyers working with our credit repair company, and I’m hopeful that by the time their purchase option expires (February 2010), they’ll have their credit to the point where they will be able to purchase the property.

The husband has been very diligent about keeping in touch with the credit company, doing his part and working hard to get his creditors paid off. And the credit company is doing their job, appealing all the the issues that have come up on the credit report, and giving our buyers good advice on where to focus their payments and their efforts.

I still have no idea if these buyers will ever be able to actually purchase the property, but I know they want to and are working hard to get there.

House #6: The Red Garage House

This property has been the bane of my existence the past several months. We’ve already received four offers, had two contracts, have gotten four appraisals, done two inspections, and we just can’t seem to sell this thing! Unfortunately, both buyers who had contracts couldn’t get their financing done, so the house is still sitting, and every day it sits on the market, it starts to look less and less desirable to buyers who wonder what’s wrong with it.

We actually just dropped the price a bit (to $107,500), and did some heavy marketing over the weekend, and we’re seeing a few potential buyers coming to look at it so far this week. So, hopefully we’ll find someone interested very soon. If not, I’m planning to greatly reduce the price in a week or two, to the point where we can quickly move this one. I hate having cash and credit tied up for more than 4-5 months at a time, and this one just hit six months.

House #8: The 16-Bid House

This one is under contract, and we have a closing scheduled for Friday afternoon. The buyers have until midnight tonight to do their inspections, but it doesn’t look like they plan to actually do one. I still don’t know if they’re planning to use the house as their primary residence or if they plan to hold it as a rental, but either way, I think they’re getting a great deal, and I’ll be happy to get this one off the books at the end of this week.

House #11: The Sunglasses House

The rehab on this one is pretty much complete (final pictures/video coming soon), and now we’re just dealing with the final inspections. Last week, we failed both the final plumbing and final HVAC inspections. Of course, both our plumber and HVAC guy disagreed with the reasons for the failures; but ultimately, the inspectors are going to get what they want, so both companies came back out to make the required changed.

As of today, we’ve now passed all of our rough inspections, and have passed our final plumbing and final electrical. Our HVAC guys should be finishing up their work this week (they’re waiting for a part to come in), and hopefully we’ll get signed off on the final HVAC inspection by the end of the week. That just leaves our Certificate of Occupancy (CO), which is the final overall inspection, at which point we’ll officially be done.

This house is being sold to my brother and his fiancee, and because it’s an FHA loan, we can’t close until after we have owned it for 90 days. My brother’s lender has been able to push most of the preliminary loan work through already, and thinks that they could possibly close within 1-5 days of hitting the 90-day mark! In fact, we’ve already had two appraisals (both came back well-above the purchase price), and because we will have an CO, we don’t need an FHA inspection.

It’s possible we could close on the sale of this property as early as mid-next-week…but anytime in September would be fantastic…

House #12: The Mini House

We just got a final contract from the couple who put in an offer on this house last month. They were forced to wait until this month to start the financing process, due to the FHA 90-Day Rule, so we didn’t formally accept their offer last month, and hadn’t spoken with them in a few weeks. We can’t formally sign the contract until we hit Day 91 (end of September), but we’ve verbally accepted, and assuming no financing or appraisal issues come up, I think we have our buyers!

The buyer’s lender thinks they could be ready to close in early October, so this could be another property we get sold in the next few weeks…

House #13: The Poor House

We’re schedule to close on the purchase of this one next week, and are just starting to put together our budget and our contractor list. It looks like this is going to be a more expensive project than we had anticipated, as we finally figured out the source of all the mold in the basement. Apparently, one corner of the basement has some serious water-proofing issues that we’ll need to rectify before we can start on our cosmetic renovations.

We got our water-proofing company out to give us a quote on the work, and he came in at around $7K for what he recommended we do. I very much trust their opinion, but for this price, we needed to get a few more quotes, so we called a couple more water-proofing companies. We’ll get three more bids this week, and hopefully we can get that price down a good bit. Unfortunately, I don’t know much about water-proofing, so it’s going to be a tough area for us to negotiate.

In addition to a full cosmetic makeover on the interior, we’ll also be replacing all the siding and the roof on exterior of this house, so overall this is going to be a big project. This rehab will likely come in around $50K, but we’re picking up the house for a great price, so hopefully we’ll still be able to make a decent profit.

Mobile Home #1

We’re meeting with the mobile home (MH) buyers for MH #1 this Friday to get all the contracts signed, collect the rest of the down-payment and then let them move into the property. This first sale was almost too easy, but we’ll see what happens. Worst case, they don’t pay their mortgage payments and we need to repossess, but with their $500 down-payment, we’ve already collected 25% of our purchase price back.

After doing some further research, we’ve realized that in order to buy and sell MHs in Georgia, we need a dealer/broker license. This is going to take a couple weeks to get and is going to cost us $200, but if we’re going to make this a long-term business, we should be following the rules. Of course, this now brings up the issue of having to collect sales tax from the buyers, and creates a whole lot more paperwork for the business, but I guess that comes with the territory.

Anyway, that’s it for today…more tomorrow, unless the baby decides he ready to join us…

As a reminder, our first offer was back in April, and that one fell through in mid-July, after months of underwriting hell, culminating in a low appraisal and the buyer losing his job. We put the house back on the market, and quickly got our second and third offers, on the same day. The offer we accepted fell through when the buyer got cold feet, and by that time, the buyer with the third offer had found another house.

So, after just a few days back on the market, here we are with offer #4…

The offer is a bit lower than we want, and there are a couple offer terms that we’d like to revise (closing date and inspection time-frame), but we’re planning to make a counter-offer, and hopefully the buyer will be willing to compromise. Funny enough, we received the offer early this morning, and my wife has been unable to get in touch with the buyer’s agent all day to make the counter-offer. Just another example of people in this business not caring much about their jobs…

But, that’s a completely separate rant…

As I mentioned a few days ago, we got The Red Garage House under contract for a second time. Unfortunately, this deal just fell through last night after the buyer got cold feet.

We had received a second offer that same day we accepted the contract, so we’ve gone back to that buyer with a counter-offer. We know he had found another house he liked in the past few days, so we’re not sure if he’ll be interested in our counter-offer or not. But, I guess we’ll see…

Now, I wanted to give a general update on what’s going on with all our properties, and our search for more properties…

House #1: The Corn House

We were hoping to close on the lease purchase of this house at the end of this month, but given some recent events, I’m pretty sure that won’t be the case. First, the buyers were supposed to contact the lender at the beginning of the month to get their credit pulled and see if they were close to qualifying for the FHA loan they’d need to close on the house. They didn’t actually contact the lender until just the other day, so we don’t know if their credit has improved or not, and even if it has, there’s little chance we’ll be able to hit an end-of-month closing.

Additionally, the buyer’s rent check bounced this month. This is the first time this has happened, and while they were tremendously apologetic and immediately got a cashier’s check for the balance owed, it didn’t provide me any more confidence that they have their finances in order.

Tomorrow, we will speak with the lender about where their credit is, and we also have a meeting scheduled with the buyers to discuss next steps. Assuming they won’t be able to close on the house before the contract expires on 8/31, we need to figure out what we won’t to do with them. Our two most likely options are: we could cut them loose, and put the house back on the market; or we could extend their lease purchase for another several months. Considering we’re making great money off the lease purchase (both the rental income and the monthly option fee that we’ll keep if they can’t close), extending their contract probably isn’t a horrible financial decision.

That said, we still have $100K of our own cash tied up in this property, and with them bouncing their rent payment this month, I’m a little concerned about future payments. My wife and I need to sit down tonight and figure out our strategy before tomorrow’s meeting.

House #6: The Red Garage House

The Red Garage House is under contract again! We received two offers at the end of last week, and one seemed much more likely to result in a smooth closing than the other, so we pursued that one. The buyer immediately accepted our first counter-offer, and now has 7 days to complete their inspections and any other due diligence they want to do. We provided them a copy of the Inspection Report from the first set of buyers we had on this house, so they may not even choose to have another inspection on their own.

That said, it’s an FHA loan, so the lender will want to do an FHA inspection, and will also need to do at least one — and probably two — appraisals. I expect those to happen later this week, and assuming we don’t run into any appraisal issues, we’re scheduled to close on the sale of this property on September 7.

House #8: The 16-Bid House

It’s now been 24 weeks since we got this one under contract to buy, and we still don’t have a closing scheduled. At this point, I’m fairly certain they won’t get the title issues resolved anytime soon…while there is no possible title issue that should take this long to clear, my guess is that Fannie Mae (the seller) is just very backed up in resolving their title issues.

The contract expires for the 5th time at the end of the week, and assuming the seller doesn’t back out, we’ll just sign another extension. This time, I may ask for some of my earnest money back (we have $10,000 tie up in earnest money), though I don’t expect them to be reasonable about it. Between the listing agent and the seller, nobody’s been very reasonable in trying to help us with this deal.

Anyway, there’s nothing more to say here…it’s still just wait-and-see…

House #9: The Hat Trick House

After several delays due to RESPA regulations, we finally close on this house first thing Monday morning. It feels like forever since the last time we closed on the sale of a house, so I’m pretty happy about this one.

We moved all the furniture out the house on Friday, and we’re meeting the buyer and her agent over there right before the closing to do a final walk-through. The only issue that needs to be fixed is a roof problem that the inspector found a couple weeks ago; apparently the roofing company knocked out a piece of soffit at the top of the roof during the maintenance they performed, and just need to come out and reattach it. They’ve been putting off coming to fix it for two weeks, and with the walk-through scheduled for 9am, we’ve told them they better get it done very early so that the buyer doesn’t complain.

More on this after the closing…

House #11: The Sunglasses House

This one is almost finished. The oak hardwoods went in last week, and all that is left is the kitchen cabinets, a bathroom vanity, carpet, finish plumbing, and new garage doors. Hopefully all of that will get completed this week, and then it’s just the little stuff, like door knobs, switches and new outlets.

This project is going to end up going about 8 weeks (a week or two over schedule) and will end up costing about $65K. The results are fantastic.

I plan to do another video this week, so stay tuned…

House #12: The Mini House

We have buyers for The Mini House all lined up. After some back and forth with counter-offers, we finally came to agreement on terms and everyone is happy. Unfortunately, though, it’s an FHA purchase, and the buyer’s lender has informed us that they can’t even put the house under contract until after the 90 day seasoning period, which ends on September 26. That means we’d likely close mid-October at the earliest.

We’ve told the buyers that, as long as we don’t find another buyer who can close significantly sooner, we’ll hold the house for them. I figure that if we don’t find a buyer who isn’t subject to the FHA seasoning before mid-September, we’ll get the ball rolling with these buyers and have them start their due diligence. That way, by the time they sign the contract, we can be sure they they’ve completed their inspections and are ready to move forward as quickly as their lender can do it.

Making Offers

My wife and I spent about 8 hours today checking out properties, as we’re ready to purchase a few more. Unfortunately, we weren’t thrilled with the inventory that’s out there right now. We did find a couple houses that we plan to put offers in on tomorrow, and hopefully there will be some new listings in the coming weeks that are attractive investments.

That’s it for now…more tomorrow…

Today we received our second offer (the first offer since many months ago), which is nice considering how many times we’ve gotten positive feedback from buyers on this house. The offer was solid, and we were planning to counter it immediately, but then my wife talked to another agent this evening who says she will be putting in an offer in the next 24 hours on this same house.

So, it now seems that we’ll have competing offers on this house, which will be even nicer. One way or the other, we expect to have this house under contract in the next 48 hours, which means that every one of our remaining houses will now be under contract to sell!

I’ll have more to say about this once we get an official contract with one of these buyers…

We fully expect this closing to go smoothly, so we have no concerns about the date slipping out a couple days; that said, we’re moving the furniture tomorrow, and can’t wait to officially have this house sold.

In other news, we believe that our counter-offer on The Mini House is about to get accepted. And we have two agents who are telling us that they are getting ready to submit offers on The Red Garage House sometime in the next 24 hours. At this point, I never believe we’re getting an offer until I see it on the fax machine, so I’m not getting my hopes up.

But, if we do get both these houses under contract this week, we’ll officially be out of houses to sell.

House #1: The Corn House

We’ve collected four on-time rent checks, and according to the contract, we should be closing on the lease-option on this one at the end of next month. Unfortunately, based on the credit check that the mortgage broker ran last month, it’s unlikely the buyers will be in a position to qualify for a loan by the end of August.

We haven’t talked to them about it yet, but my guess is that they’ll want to extend the option, and given how much we’re making in rent and option fees on this property, we’ll be inclined to extend the contract for them. I expect we’ll probably extend the contract through the end of the year, and hopefully by then they’ll be in a position to get funding and purchase the house outright.

House #6: The Red Garage House

The Red Garage House is still on the market, and we’re actually hoping we don’t get an offer before the end of next week. The Hat Trick House is in the same neighborhood and is under contract, and we’re hopeful that once it sells, that will help us generate a higher appraisal for the ultimate buyer of The Red Garage House.

If you recall, the sale of this one fell through when it didn’t appraise for what we needed, so having The Hat Trick House sell will likely help us to avoid that problem the next time around.

House #8: The 16-Bid House

It’s now been 19 weeks since we got this one under contract to buy, and we still don’t have a closing scheduled. The title company has given up on trying to get two liens cleared from the title, and have passed the issue on to Fannie Mae, who is now working on getting the title cleared.

The extended contract expires again next week, and we’ll see what the title company has to say before we decide if we want to extend it again or whether we want to just give up on this deal. My project manager stopped by the house last week to check on it, and apparently some kids decided to throw a 4th of July party there (used fireworks on all the floors); there was some other new damage as well, but until we hear something from the title company, I’m not even going to bother spending time trying to run the new numbers on it.

House #9: The Hat Trick House

The Hat Trick House is still under contract, and we’ve already been through two inspections. On the first, the inspector from NACA (the lending program the buyer is using) did a full inspection and made a list of the issue that he and financing agency would be concerned about. There were about 6-8 little things that he noted, with only 2 issues required to be fixed in order to process the loan (inoperable garbage disposal and inoperable gas fireplace).

It turns out that neither of the two issues were really issues — the garbage disposal did work (he just noted it incorrectly) and the gas supply for the fireplace was just turned off at the meter. So when he came out for the re-inspection of those issues today, it only took about 5 minutes and everything was signed off.

The next (and hopefully final) hurdle with this loan is the appraisal. As I mentioned previously, the offer was significantly higher than the asking price (based on the way the loan is funded), so it must appraise for a good bit more than we had expected. It turns out that NACA has their owner appraisers, and that they will fund up to 110% of the appraised value of the property. So, we only need to the appraisal to come back at 10% below the offer price, which is good. And the fact that they are using in-house appraisers is also good.

I’m still concerned about whether this property will appraise high enough or not, but everyone is so motivated to make this deal go through (especially the buyer), I have a feeling we’ll figure something out regardless of where the appraisal comes in.

House #11: The Sunglasses House

If you’ve been following the progress we’ve been making on this one (rehab video #1 and rehab video #2), you know that we were planning to complete the exterior landscaping and the interior painting this week. Well, we finished the landscaping, but instead of painting the interior this week, we switched things up and had the tilers come in to tile the fireplace and the shower instead. We also had our pest control company come in and do termite and rodent treatments.

Next week, the privacy fence goes up, the gutters go up, and the interior will be painted. After that, it’s down to reinstalling the HVAC systems, installing cabinets, fixtures, flooring and the finishing details.

My brother and his fiancee will be purchasing this house, and the last big renovation decision they need to make is whether to put a window in the downstairs “bedroom,” thereby officially making it a bedroom (county code requires an egress window or door to the exterior for the room to be considered a bedroom).

House #12: The Mini House

This property has garnered a lot of interest over the 3 days since it was listed. We’ve already had two showings and we have another three scheduled for this weekend. In fact, the first person who looked at the property has been back again, and supposedly she is planning to view it again this weekend with her family.

The only problem we face is that all the potential buyers we’ve spoken with would be getting FHA loans, and with the FHA 90-Day Rule, we wouldn’t be able to to sell to any of them until at least the end of September. Of course, FHA can take 45-60 days to process anyway, so even if we received an offer this weekend that we wanted to accept, the time frames aren’t that unrealistic.

That’s the scoop for this week…have a great weekend!