Steve and Veronica's Deal, house #4

Thank you for your post here. I hope to see your slide show soon. I hope things are going well over on 5st.

Steve

most of our deals are out of state. We have been blessed with family willing to check out houses for us. We are putting in offers on houses here in CA to flip.

I hope you get your Totally Fulfilled book soon. I think it is a great book.

Steve

We are waiting on quotes from different contractors to come in on this house. We want to make sure the job gets done right the first time. That's the update for now.

Steve.

I know it has been a while on this one we were waiting on a contractor that was the lowest cost to fix this place up it does need a lot of work. After meeting with Dean and Matt last week Dean said STOP waiting you are walking over quarters to pick up dollars. First thing I did when we got back from AZ was call the contractor and I said get this job started. So work has started on this project. Dean and Matt gave us a lot of tips on rehabbing homes so I know all of our other deals will go faster and cost less to rehab.

Thanks Dean and Matt.

Steve

This is the Illinios house we call it. It is being rehabed right now the new windows are in the the new back door is in after the wall came down. Totally rotten back porch wall but it is replaced now. We will be glad to be done with this one. We will make money on it but it is costing a little more than we wanted to spend. When it is done it will be a real nice home for someone.

Steve.

Here is an update on this one. The rehab is coming along. We thought we had a set back with the furnace in this house my contractor said it was starting to cool off in this part of IL and we should fire up the boiler for some heat. The contractor said we never started a boiler before and the house was empty for over a year and he would like a heating and air guy come out and start up the boiler. So I called heating company out to start up and look the boiler over. I got a call from the tech and he told me the boiler was shot. He quoted me 1k to fix it with no garenty that it would work. He told me they can replace it for 4k. If we wanted to put in forced air heat it would cost around 5k-6k with duct work. So I asked my contractor what he thoght about the qoutes. My contractor told me he knew of a furnace he can get for $500. and knew a heating guy that can do the duct work for under 2k. The new heating guy came out to the house to see the size of the house to make sure the furnce was going to be big enough or to big for the house. the new guy asked my contractor what is wrong with this boiler. My contractor told him what the first guy had said was wrong. The new guy said well here is what is wrong replace this replace that and I will be back tomorrow to start it up. To make a long story shorter the parts cost $150. labor for the new guy $150. and we now have heat in that house for a lot less than we thoght we were going to pay.

Other things are coming a long well so far and I will keep updating.

Steve

I guess home inspections do not catch everything. I had an electrician working with my contractor today. They found some over loaded breakers and had to run a lot of new wiring. The home inspector did not catch all of the jerry riged wireing job in the attic. Well now we have 3 wire ran all over the house which is good just cost a little more. We want the renters or new owner to have a safe house. Rehabs are fun save here but then pay there. We will still come out with positve money.

Steve.

I talked to my Dad in Illinois who checks on this house for me and he told me the contractor is doing realy good work. I do hope so. We should be doing a refi loan on this house soon.

Steve

This deal has been a very hard learning lesson. This is not to be taken as a negitive but I hope others will learn from it. The main house rehab is done and the contractor did a very good job. The house looks brand new. The contractor was talking with some nieghbors in this small bedroom town next to Danville IL. The nieghbors and the contractor guessed that the house would apraise for around 70k. The bank sent out an apraiser and he came back with 33k. But we have the best looking house in the nieghborhood. other houses in the area have only sold for 30-40k by the apraisers paper work. Here is the problem. WE bought the house with cash from another refi property for 14k. we have put about 22k into this house so we are up to 36k into the deal. We were hoping for at least 50k ARV. We are doing a noseason refi on this house we will get about 26k back it will not cover all of our expenses but we will rent this house out for 400 a month and our payment will be 200 a month so that is a good thing. I know the house is worth more I just do not feel like fighting right now. In a year or so we might do another refi.

The point I want to make is do all of your home work. Just 20 miles away from this house in a small Indiana town the same size house will go for 60k. It is a better school dist. I just seen a HUD house for 17k that I bought for 14k. Dean and Matt both told me not to spend a lot of money on this house. They both told me how to get in and out for a lot less money than what we ended up spending. If I only would have done exactly what Dean and Matt told me to do we would be in a lot better shape on this deal. Stay with the recipe that Dean teaches. Do not go out thinking you know more than Dean and Matt it will bite you in the bottom end.

I know for sure what not to do next time. This is a big bump in the road but we will recover and move on. A few years down the road we may end up making a lot of money after all on this deal.

Steve and Veronica.