A better name for this house would have been “Brian’s Mom’s House”, but unfortunately that name is just too long for me to have to type in every post. But, it would have been fitting. You see, we originally submitted an offer for this property about two weeks ago. Before submitting the offer, we called the listing agent (whose name is “Brian”) and gave him a heads up that the offer was on the way.

At the time of the call, Brian was apparently in the car on the way to the airport, leaving the country for 10 days. He said that he would be gone, but that his mom would be handling things during that period. Long story short, Brian’s mom did handle things, but the process was long and drawn out. It was not Brian’s mom’s fault at all; she was tremendously nice and helpful. But, it was also clear that she hadn’t had much experience dealing with REO offers or dealing with bank asset managers, so each step took a couple days longer than it normally would have.

But, in the end, she helped us get this house, and it was actually a fun little saga…

Anyway, The Silver House is a 3 bedroom, 2 bath one-story house built in the mid 1980’s that we’re picking up for $46,000. It’s a marginal deal from a rehab/resale standpoint, but should be an easy project that will allow us to make our minimum profit target. That said, we are also considering just trying to wholesale it to another investor (someone looking for a good rental property) or to an owner occupant with cash.

Since it is a Fannie Mae property, we will be restricted from reselling it for more than 20% above the purchase price for 90 days; given that we’ll likely only make our minimum profit on this one as a flip, I’m not sure I’m happy about holding it for a minimum of three months. I’d rather sell it quickly for a small profit, if possible.

Anyway, we’ll figure out our plan at some point before we close on the purchase…at which point I’ll have more to say about this one…

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After nursing the puppy back to health for a few days, my brother found an animal rescue organization that was willing to take him and try to find him a good home. That organization is actually pretty big in this area, and does a monthly TV spot on a local morning show. The pup was featured this week (he’s the one on the left):

They apparently changed the story of how we found him (saying he was found unconscious on the side of the road), but he looks healthy and happy and hopefully they’ll find him a permanent home very soon.

My brother picked the pup up from the vet Monday evening, and the vet basically said that he has some neurological issues and may have some blindness in one or both eyes. The vet really couldn’t predict if he’d get better or worse, but said that he was doing okay as of then, and was ready to go home.

Well, the pup seemed pretty happy last night, was eating and drinking, and seemed pretty normal for the most part. As my brother and his fiancee just aren’t in a position to keep another dog (they already have the dog we found while renovating The Red Garage House last year, plus a few other pets), so he spent most of today looking for a rescue organization to take him.

It seems nearly all of the animal shelters and rescue organizations are full around Atlanta (probably because of all the foreclosures and families giving up their pets), and it took him many hours to find someone to take the pup. Ultimately, he spoke with a woman who runs a large rescue organization in Atlanta, and after hearing the whole story, was happy to take the pup.

The organization is affiliated with an animal clinic that can give the pup 24-hour care until they find a home, and also has a monthly appearance on a local Atlanta morning television show — “Good Day Atlanta.” She said that if he isn’t adopted in the next week, he’ll be featured on “Good Day Atlanta” on August 9, where he’ll surely draw a lot of attention. Worst case, she said she’d be happy to keep the little guy herself if they can’t find a suitable home.

So, it appears we have a happy ending. Hopefully, we’ll get an update at some point in the future on how he’s doing…if so, I’ll certainly let you know…

So, you may be wondering, why does this particular house warrant its own name and blog post? Unfortunately, it’s because there’s a sad story associated with this house that we looked at over the weekend…

We were out on Saturday looking at houses, it was about 100 degrees out, and we were in a vacant foreclosed house that we really liked. My wife was downstairs and screamed for me to come down. In the basement bathroom tub was the tiniest little puppy I’d ever seen. It was a white pit-bull mix that couldn’t have been more than a few weeks old. He was alive, but not in great condition.

It’s unlikely a puppy that age could survive without food or water for more 8-10 hours, so our best guess was that he was abandoned some time in the previous several hours; perhaps some neighborhood kids found him, wanted to keep him, but couldn’t take him home, so they broke into a vacant home and were keeping him in the tub?

Who knows…

We immediately gave him some water (which perked him up quite a bit), and drove to the nearest animal hospital. He was given a good bill of health (vet suspects he’s about 5 weeks old), with the exception of intestinal worms, an eye infection, and dehydration. We figured it wouldn’t be too difficult to find him a good home, but the vet suggested that he’d need constant care for another week or two while he got stronger and older; turns out he still doesn’t even know how to eat solid puppy food. My brother volunteered to take him while we tried to find him a home.

Sadly, last night, the puppy went into convulsions at my brother’s house. He rushed the pup to the animal emergency center where he was kept overnight. This morning, my brother talked to the vet, and they’re still not sure what’s wrong. It could potentially be the worms or another parasite causing the seizures, it could be malnourishment or dehydration, or could be trauma that he suffered at some point, etc.

At this point, we’re at about $1000 in vet bills for this little guy, and it’s unclear if he’s going to recover or not. But, we’re hopeful, and we’re still looking for a good home.

Here’s a pic of the sleepy little guy:

After two years of constant house flipping and blog writing — and with the $8000 homebuyer tax credit expiring at the end of this past April — we decided to take a one month hiatus from flipping (and mostly from writing) to focus on some other real estate business ventures. That one month break turned into two months, and now we’re on a week-long vacation to visit some family and friends we haven’t seen in a while.

Starting in about a week, we’ll be back to business, and I plan to start posting at least 4-5 times per week like I’ve been doing for the past couple years…

In the meantime, I’m honored that BiggerPockets.com — often considered the premier real estate investing site on the web — has named 123Flip.com as one of the 20 Best Real Estate Investing Blogs!

Check out the whole list here:

The Top 20 Real Estate Investing Blogs

There’s a couple (good) reasons for this…

First and foremost, with the tax credit expiring at the end of last month, we are quite confident that the numbers of buyers for all residential real estate has diminished. This means two things:

1. From a purchase standpoint, there is going to be less competition for bank-owned (REO) properties. This means that we expect to see increased inventory and lower prices for houses we want to buy over the next several weeks/months. Therefore, we want to hold off a bit before putting in offers, to give prices a chance to dip; and
2. From a selling standpoint, there are fewer buyers out there to buy our rehabbed properties, so we’re in no hurry to get any properties renovated and back on the market.

All that said, we plan to start buying again come June, and will hopefully have those properties back on the market in the August time-frame. While there probably still won’t be a lot of buyers out there come the end of the summer, I imagine there will be more than there is now.

So, for the next couple weeks, we’re in a holding pattern with respect to buying properties.

The second reason for the slowdown is that my wife and I have been working on a couple other business projects (some real estate related and some not), so our attention has been split between rehabbing and other ventures. Stay tuned, as we’ll be announcing a new venture in a couple weeks that all my readers will hopefully find very useful in their investing endeavors!

As of February 1, 2010, the FHA will be waiving their 90-Day Rule for flipping houses. The waiver is planned for 1 year, though that can obviously change at any time.

This means that investors will have the option to resell houses they purchase and renovate at any time after their purchase, without the requirement to wait 90 days prior to selling to an FHA buyer.

According to the official FHA documentation, there are a few (fairly obvious) requirements for these transactions:

1. All transactions must be arms-length, meaning that there must not appear to be any impropriety taking place between buyer and seller. This requirement also indicates that any prior flipping activity on the home in the previous 12 months may be a red flag to the lender.

2. In cases where the sale price exceeds the previous purchase price by more than 20%, the lender will be required to take extra steps to ensure the sale is legitimate. This includes a second appraisal and a full FHA inspection.

3. The waiver only applies to forward mortgages, and not to Home Equity Conversion Mortgages (HECM).

The waiver of this rule will most likely have a huge impact on the real estate investing community short term. I’m certainly looking forward to the positive impact it will have on our business.

It’s been several weeks since we submitted any offers, but as I mentioned the other day, we are in the process of going after about a half-dozen houses this week. Two of the offers that we submitted were on REO properties owned by Fannie Mae (the large mortgage lender). On both of these properties, we received calls from the agent saying that Fannie Mae was not yet accepting offers from investors.

After a bit more research, here’s what I found out about this new “First Look” program that Fannie Mae is instituting (this is directly from Fannie Mae literature):

“During the first 15 days a property is listed for sale, only offers from owner-occupants, public entities or their designated partners will be considered. Offers from investors can be submitted, but they won’t be considered until after the initial 15 days.”

Here is a bit more info from Fannie Mae…

First, for everyone who has provided great feedback and compliments on the site (through comments, emails, etc), let me say a very sincere THANK YOU!

The goal of this site is to provide “in the trenches” information on rehabbing and flipping; stuff that you might not find by buying a course or sitting in on a guru seminar. That said, I’m interested in hearing your thoughts on topics you’d like me to cover, questions you’d like me to answer, or any other ideas you might have that will allow me to better assist those of you who have been loyally following my real estate adventures these past 14 months or so (or even those of you who have just stumbled upon my site accidentally ).

If you have any topics you’d like suggest or questions you’d like to ask, feel free to enter a comment on this post or shoot me an email.

I’ll do my best to address anything suggested either in this blog, in an article or in an upcoming eBook I’m writing.

Thanks again for all the support!