House #36: Contract/Lesson

January 23, 2013 · 7 comments

We received two offers on The WI-1 House this week, and have accepted one of them. It’s near full-price, reasonable inspection period, minimal closing costs and everything else about the offer is clean. The buyers have 12 days for inspections and we’re scheduled to close at the end of next month.

I also learned an important lesson this week. The buyers asked for proof that all permits had been pulled and all inspections completed by the city building department. Not a problem — I called the permit office and asked if they could send me proof of permits and inspections. To my surprise, the permit office told me that there were still three open permits — Foundation, Electrical and HVAC! This means that there was no record of the final inspections being done (despite my being present for two of them).

I didn’t care about electrical and HVAC, as those can easily be inspected again, but if the foundation work needed to be reinspected, we’d literally have to tear apart the basement walls. Ultimately, everything was sorted out — the inspectors both had notes of the inspections and had just forgotten to mark them complete in their tracking system.

But, it was a good reminder (great reminder) to always get these things in writing from the inspector or from the building department. I wasn’t looking forward to having to tear open the basement for another inspection because the inspector forgot to update his system… 🙂

7 responses to “House #36: Contract/Lesson”

  1. Mike H says:

    J Scott,

    Can you please send me an email with your contact info? I actually went through the WI-1 house with my father who is an electrical contractor in the area and we were both very impressed. Please reach out to me when you get a chance.


  2. Shane says:

    Hey J, just curious if the coupon plugin links are something you added, or if they just kinda “happened”. “tracking system” and “electrical contractor” above show as links, with a hover message that says “click to continue -> by coupon companion plugin”.

    Weird. I’ve seen this on several sites lately.

  3. J Scott says:

    Shane –

    I don’t believe that’s from my site (unless I’ve been hacked and don’t know about it). Are you sure you didn’t accidentally install something on your browser? Or perhaps something was maliciously installed without your knowledge. Which browser are you using? Do it happen on other browsers?

  4. Blair S. says:

    J Scott,

    I stumbled on your website today and can tell you I am already “hooked.” We are getting ready to sell our 1st investment home that we bought as a foreclosure and find ourselves in a state of panic on trying to decide what is next for us. I did get my real estate license last year solely for investment purposes. Now I am having a hard time finding a brokerage that allows ‘investors only’ as agents. Many of these local brokerages will not even allow me to sell my own home. Other than having access to the MLS, which is amazing, we are having a hard time seeing the benefits of this license considering all the fees that we pay.

    I did want to ask you how you factor in your ‘capital gains tax’ when you sell your home? That is something we are trying to figure out for our next investment property. Also, before you buy your properties do you take your contractor in with you to access what needs to be done?

    Any answers to these questions are appreciated. I am so looking forward to following along on your blog, so encouraging for me.


  5. shane says:

    I’ll play around on a couple diff computers/browsers and see what it does. I saw it on your site and Flipping Junkie, using Chrome on my work pc right before I made the comment.

  6. J Scott says:

    Hi Blair,

    Not sure what part of the country you’re in, but here in Atlanta, there are literally hundreds of brokerages. Most of the smaller ones would love another agent, even if the agent is only looking to be doing investment deals a couple times per year. Have you tried finding the smaller brokerage firms (if you’ve ever heard of them, they’re probably too big). If that doesn’t help, perhaps attend a local investors association meeting and ask around — I bet other investors have their license and can recommend a good brokerage.

    As far as capital gains taxes, I’m not sure if you talking about personal residence or investments. But, for rehab/flip deals, you won’t pay capital gains. Flipping is ordinary business income and you’ll pay taxes based on your marginal tax rate (the more money you make, the more you’ll pay in taxes). I’d recommend consulting a good CPA to help you out with tax planning.

    We used to get inspections and have contractors visit all our properties before we purchased them. These days, we’ve done this enough that we know what to look for when walking through a house, so we don’t need inspections or contractors to look at the houses for us.

    As for the types of properties we buy, it used to be mainly REOs, but now we’re mostly buying short sales.

  7. Blair says:

    So helpful, thank you for the information!

Leave a Reply

Your email address will not be published. Required fields are marked *

Sign up for our Newsletter and get immediate access to our FREE 150+ Page eBook on New Construction, plus all of our business tools: Single-Family and Multi-Family Business Plans, Rehabbing and Buy-and-Hold Spreadsheets, Contract Templates, and more!
We respect your privacy. No Spam...EVER!