Update for 9/15/2009

September 15, 2009 · 7 comments

Let me first mention today that my wife and I are expecting our first baby any day now (he was due this past weekend), so if you notice a few days where the blog is not getting updated, you’ll know why… 🙂

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…

7 responses to “Update for 9/15/2009”

  1. Jingle says:

    It is strange how differently the regions of the country interpret the 90 day rule. I have no problem getting the deal contracted, inspected, even appraised while we wait for the 90th day. The loan is processed as usual. They only thing that we have to do is terminate the original contract, and sign a new one on the 91st day. Generally, if all cylinders are firing, we close sometime in that week. I feel lucky. I had one deal where I was required to get another appraisal done, but that was when almost each deal I did was getting hit with two appraisals. I haven’t seen that in the last 6 months.

  2. J Scott says:

    Jingle –

    It’s not so much the region of the country as it is the specific underwriter that you’re working with. We have underwriters that our brokers have worked with who don’t even want to think about a contract until Day 91, and then we have some underwriters who think the 90 days are just a formality, and are happy to close on Day 91, if possible. Find an underwriter who supports your business, and stick with him!

  3. Sean says:


    First off, congrats and best of luck with your impending arrival!

    re mobile home #1, why does sales tax become an issue?

  4. J Scott says:

    Sean –

    It’s only an issue because it’s an extra expense out of the buyer’s pocket. If they purchase a MH from us for $6000 (for example), they’ll owe about $350-400 in sales tax (depending on the county).

    These are typically buyers who have trouble coming up with $500 in down-payment, so coming up with another $400 for sales tax might be a factor in their decision to buy.

    Does that answer your question?

  5. Sean says:

    Sorry, I’m being dense.

    Are you saying that without having the broker/dealer license, you wouldn’t have had to collect sales tax? (if it wasn’t a law to have the license). If yes, why does have the license change the nature of the transaction?

  6. J Scott says:

    Sean –

    Legally, yes, you HAVE to pay the sales tax on everything you sell. But, without the dealer’s license, it’s much less likely we’d get caught if we didn’t pay it… 🙂

  7. Sean says:


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