Update for 4/17/2009

April 17, 2009 · 3 comments

It’s been an amazingly relaxing week…probably the most relaxing I’ve had since we started this business…

For the most part, we’re out of houses to work on. Most of them are under contract waiting to sell or under contract waiting to be bought, and other than looking for more houses, doing some book-keeping, paying some bills (and taxes!), and working with buyers and sellers, there isn’t any rehab work to be done. That said, next week we should be back to work with plenty to do, so I’m just enjoying the down-time while I can.

With nothing terribly exciting to report, here’s my end-of-the-week wrap-up…

House #1: The Corn House

Our Lease Purchase tenants have been great so far. No issues, good feedback, and they’re apparently still very excited to buy the house.

On the down side, they asked us the other day if they could have a dog while they leased our place. My wife and I discussed it at length, and while we’d love to let them, and while we’re confident they’ll eventually purchase the house, we decided that it just wasn’t prudent for us to allow an unknown dog to live in that house. First, there are new hardwoods in the living room and dining room. Second, without a fence in the back yard, there is additional potential liability.

We hated to have to do it, but we let them know that we just couldn’t allow it. In the future, we’ll make a point of having this discussion before tenants move into our properties, just to avoid having to “be the bad-guy” by saying no later on.

House #3: The Second Chance House

This one is finally SOLD!

Though the buyers did call us today and ask if we would come over at some point and fix a couple very minor issues. While normally I would have had a very big problem with doing this, these buyers provided us a nice payday, and have been very accommodating to us in getting this house closed quickly; so, I agreed to stop by and fix the minor annoyances (specifically, removing a cable TV line that is attached to the side of the house and readjusting a shower door this is misaligned).

Hopefully, there won’t be any ongoing requests…but I’ll cross that bridge when I come to it…

House #5: The DIY House

We’re pretty much set for closing on this one. We found out that the appraisal came back at $128K, just $500 above the purchase price; it appears that the appraiser really did go out of his way to help us (and the buyer) out on this one.

The only remaining issue that needs to be addressed is that the VA inspector is requiring us to put a railing on the stairs leading to the basement and a splash-block beneath the gutter spout in the back yard. We’ll take care of that first thing next week, have the inspector verify, and then hopefully close on this sale late next week.

House #6: The Red Garage House

As mentioned yesterday, we received an offer on this one, and now have a binding contract. I’m still very curious how the FHA regulations will play out on this one…

First, I was under the impression that FHA wouldn’t fund the purchase until 90 days after my deed was recorded (which just happened this week); but the buyer’s lender says he only cares that it’s 90 days past the purchase date (which would be May 14).

Second, I’m still under the impression that FHA will refuse to start underwriting unless the purchase contract is actually signed after 90 days; so, from FHA’s perspective, the contract we currently have is probably not good enough to start loan underwriting. But again, we’ll let the lender sort this out. If he comes back and says we need a new contract, we’ll worry about it then. As long as the buyer acts in good faith, I don’t mind jumping through some hoops to make this one work.

House #7: The Roach Duplex

As mentioned the other day, the second contract on this house fell through.

Earlier in the week, we received a third offer — verbally — for a good bit less than the asking price. We rejected it flat-out, and the next day we received another verbal offer from the same guy for a few thousand dollars more. We also rejected that one, but countered with our minimum acceptable price. He’s taking that back to his partners, and if he decided to accept it, great. If not, that’s fine as well.

We also received a phone call last night from a woman who was supposedly planning to fax an offer over to us, but we never received it. It’s amazing how flaky buyers are…these days (after maybe a dozen promises of offers on various houses), I don’t even start to think about an offer until we have it in writing, signed by the buyer.

House #8: The 16-Bid House

We still don’t have a closing date for the purchase of this one, but the pre-closer assures us that they now have clean title and that we should close “by the end of the month.” It’s been nearly 7 weeks since the bank accepted our offer, so I’m ready to close and get moving on this one…as are my contractors.

House #9: The Hat Trick House

We close on the purchase of this one early next week (Monday), and don’t expect this to be a tough rehab. In fact, this house is pretty much identical to The 16-Bid House, and they’re both pretty much identical to The Red Garage House, so our contractors already know what to expect and will be able to cruise through both of these projects in just a few weeks.

The big question is whether or not we should be rushing through these projects, just to have the houses sit for a couple months waiting for the FHA clock to run down. Hopefully we’ll be able to find a local bank that can provide alternative loans to first-time buyers will similar terms to FHA, but without the 90-day seasoning period. This would allow us to sell these properties quickly, without all the FHA hassles.

3 responses to “Update for 4/17/2009”

  1. Dwayne says:

    I’ve been reading your blog and think its great. Very informative. And its nice to see someone making it happen and being successful doing rehabs. Especially when alot of people say in this market now is not the time to be doing rehabs.

    This gives me the motivation and confidence that I can do rehabs which is what I want to do the most. Keep up the good work and much continued success to you.


  2. Sam says:

    I’ve got a similar issue with FHA where my buyer submitted the contract last week, but my 90 days is not up until this Tuesday. The contract has been signed and the inspection has been completed. No appraisals done yet though.

    Like you, I’m leaving it in the hands of the buyer, her agent, and her lender. Hopefully the worst thing that happens is I have to sign a new contract, dating it after the 90 days.

    No consistency at all in how this crazy rule is handled.

  3. chris says:

    glad you finish the houses all look good. i have a question i moving to atl in a few months and looking to buy a few rental to start what area should i be looking in? price range 30-40 3/2 i looked online and see alot of 05/06 duplexes for sellin downtown areas for 40-50 all are newer houses are there deals? thanks for any help you can give me and good luck on you houses.

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