Things have been tremendously busy the past few weeks, which is why the posting has dropped off, but I wanted to give an overview of where we stand with all our current projects:
The Full House is now more than 2 weeks past the contractual closing date, and while we’re getting close to the finish line, we still have some hurdles. The mortgage broker for this deal isn’t doing a very good job, and has missed several key items needed for the financing to complete. First, she forgot to order the second appraisal (we told her it would be needed, but waited until underwriting told her the same thing); next, she didn’t force the buyers to have an FHA inspection, which is a requirement these days, despite the buyers not wanting to spend money on an inspection; and lastly, once the inspection was completed, she never informed us of the repairs that needed to be made to get through underwriting.
The last item was most infuriating. My project manager was at the inspection, and was taking notes; so, despite the mortgage broker not telling us what repairs needed to be done, we knew about them and had them done anyway. But, the broker didn’t realize that she needed to get the repairs verified by the original inspector and sat on the inspection report for a week. Finally, the other day, she calls me frantically and says, “We need you to complete these repairs ASAP so we can get a reinspection and get this deal closed!” I informed her that the repairs had been completed for a week already (and we had made the buyer’s agent aware of this) and it was now on her to get the reinspection. Of course, she is unable to get the inspector out there again before mid-week, so we’re still at least 5 days from closing.
Hopefully we’ll close at the end of this week, but who knows…
We’re only about 60% confident the buyers on this deal will be able to close. While we’re through the inspection period without any repair issues, the mortgage broker has informed us that there are two potential financing issues on the horizon.
He is actively trying to get desktop underwriting approval on these two items (basically, a go-ahead from the underwriter that these issues won’t stand in the way of a loan), but we may not have that for a few more days. In the meantime, we’ve relisted the property and are starting to let potential new buyers look at it; if we can get a backup contract, that will make any financing issues easier to deal with (or easier to just cut these original buyers loose).
We should know in the next couple days if the financing is looking promising, but given that we’re less than two weeks from closing and haven’t even had a single appraisal yet, it’s unlikely this one will close on time, even in a best-case situation.
Renovations are moving along — slowly but surely. We’ve jacked up the house and the floors are now level (and foundation is rock solid), we’ve passed all our rough inspections and framing inspections, we’ve completed sheetrock, we’ve completed work on the exterior of the house, and now we’re ready to start putting the inside back together. This week, we’ll focus on interior paint, trim and hardwood floors. Next week, we’ll install cabinetry, complete the finish electrical and plumbing, and then we just need to do carpet and finishing touches before we’re ready to list.
This is the first property in 3.5 years where we’re not very confident of how much it will sell or appraise for, so we’ve hired an appraiser to give us his opinion. We’re expecting the appraisal to come in somewhere between $130-160K, but I have no idea where (and that’s a big range). Even if it comes in at the low end, we’ll still make our minimum profit on this one, but I’m hopeful that we’ll have some additional upside as well. We’ll know more in a couple days.
I’ll post some updated pictures later in the week…
We’re still under contract on this one, and given that we are not allowed to sell the property until mid-May, we’re not rushing the process. All inspection repairs have been completed, and the next steps are reinspection and appraisal. Once those are completed, the underwriting process should be pretty quick, as this is a NACA loan.
I’ll try to post the final pictures this week as well…