KEB'S later years

My first deals were in a small town in california called taft (pop 14k). I made an offer (sorry I used carlton sheets books and forms before I knew of dean) to put an offer of 55k on three houses and a lot with owner carry of 8% for five years with interest only payments. I, with a partner put up 5k each and they took the deal. The homes needed work and I knew nothing about construction but I knew how to do the deal and BAMM enter Brian my partner. Our payment only started after escrow closed and that took 9 months..yea nine..Land was oil lease and homes were personnel...nine months. So we took a chance and worked and finished the first one for 5k. We rented it (2/1) for 500 per month and our loan payment was 300. We were on a roll now. This was in 2002.

your journal up to this point. You have helped me for sure in the past and I look forward to following your journey!! Maybe I'll close a deal soon. I have a real estate agent who is with Remax and says she has been working with investors for 26 years. So far she has sent me last 90 days of sold properties, but haven't heard from her in 2 weeks. I told her what I need, but so far, no other response. HMMMMM.. maybe she's not the one. I'll give her a little more time.

Shirley
Shirley

your journal up to this point. You have helped me for sure in the past and I look forward to following your journey!! Maybe I'll close a deal soon. I have a real estate agent who is with Remax and says she has been working with investors for 26 years. So far she has sent me last 90 days of sold properties, but haven't heard from her in 2 weeks. I told her what I need, but so far, no other response. HMMMMM.. maybe she's not the one. I'll give her a little more time.

Shirley
Shirley

Glad to see the D.O.M didn't carry you away.lol How you been? I see you are still at it which is great. Have seven offers on the table right now so I have stuff to write about....Will keep you posted..

Keith,

that is so great that you started a journal; you're always working on amazing deals so I know that everyone who reads your journal will benefit from it!

It has been my pleasure knowing you, and I will always be grateful for all your advice that you so generously give.

Looking forward to reading all your posts!
Val

Thanks for the kind words but YOU and you only put in the time and energy to make it happen for you in Ohio. I look forward to finally meeting you at the training on the 15th in SM.

So in 2002 we had one rented and two to work on. Started work on a nice 3/1 at the top of the town with a view of the city. You have to understand taft here. South taft is in the county and there are no sidewalks, street lights and oh yea they have septic. It is like a time warp when you enter this side of town that I have all these homes. There is a good rental market thou. So a couple of months go by and we finished (only worked every other weekend because 2 hours away and we did the work)the 3/1 and rented it for 850 per month. Note here: I put my team in place first before I bought anything (property manager, agent and a handyman backup). On to #3, 2/1 that had a few issues like 9" drop in the kitchen floor. Oh, i forgot to mention that most if not all the homes in south taft do not have foundations so that is the reason for the drop in the floor (sitting on wood and wood on the ground will do what? Well 5k and alot of sweat and number three is done and rented for 600.

In 04 we ran into a few good deals in taft so we bought a duplex for 20k owner finance, another duplex for 30k cash and a 3/1 for 40k. Projects, projects.....Ran into a few problems getting the land and the house put together on the tax bill which I thought the escrow company would do..Wrong...Found a great deal on a two for one deal..Two homes 3/1 and a 2/1 on the same lot for 75k. The front house was a monster of a house..like 1800sft or more. It was set up wrong ( had to walk into a bedroom to use the only bath) so we reframed the area so all rooms could use the bath which ended up makeing it a 4/1. New roof,paint and mud, carpet and 900 per month. The back unit was WOW. The old man that lived there was the owner and his family didn't take carry of him well. He had 20 cats and the trash in the house was knee high. After we told them we would walk away from the deal if they didn't do the right thing with him, his only child put him in a home (great family values there). Six trailer loads of trash later and new roofs,foundations and others we rented it for 550.

Since the metal market did so well before 2004 i had some cash and wanted to invest in a different market because I had a partner in taft and didn't want to mix it up. Built a team just outside of youngstown ohio and went shopping for some deals. The first was a 3/1 two story home in a great area that was an reo. The bank was asking 17k so I had the PM walk it and let me know what it would cost to get it rent ready for sec8. She said 3-5k so I offered the bank 12k cash..deal..Then she finished it and rented it for 500 per month. Great return.....

The second house was an reo again from my agent(who set me up with email notifications on any 25k and below home in this area only) who was a god sent. The bank wanted 14.5k and I did the same thing as the last one. The repairs were 5k (which later turned into almost 10k because the floor had to be torn up in the bathroom on the ground floor which was all concrete) so I ask for 10k and we settled on 12k. I was ok with it because it was a 4/2 and it rented for 625 to a sec 8. The third was a investor that my property manager knew lived out of town and wanted out of their property. They had a renter move out after not paying rent for several months and left the place in a mess. They wanted 12k and the repairs were 5k. I offer 7k and they said yes. Repair ended up at 4.2k and it is rented sec 8 for 495. I have one other that I bought before my team but was in a bad area even thou it is very nice inside and out. So nice that the renter took everything when they left..Everything,,,,water heater, copper so I boarded that one up for later....
This is why you put a team in place before you buy ANYTHING....

I ordered deans books and saw that I had done a few things wrong in taft. I went to the web site and started talking with a few people there (HEY VAL)and tried to help them and learn what I don't know from some of the top people. Learned alot about real estate and what I needed to do to get to the next level. Started a buyers list by running an add on CL for my old house for a rent to own which gave me ten good buyers for the subject too's that I wanted to do.

I joined the Santa Maria california REIC which is run by Dana Klaft. Dana was buying properties in Taft at the same time I was but the diffence was he bought 50 in two years and flipped 95% of them. He ran circles around me the whole time I was there. He made over 1 million dollars during that time frame and lost it all in a bad deal on a hotel. That's got to hurt!!!!! Dana was offering a wholesale class which is next month on the 15th...Do you think I signed up...Come onnnnnnn......

In this business you have to make offers to get anything done...I have been looking at the taft/bakersfield area of california to do most of my buy and holds. I will look at lompoc for all my subject too's because if there is a problem it will be right in my back yard.
In bako I had been working on an 18 plex that as of last week fell apart. The place was run down but had great possibilities. It was all 1/1 units with block walls.There were seven duplexes and four one bedroom houses. There was two 12 by 15 garages that were run down but I was going to turn one into a laundry and the other into a mini storage for the renters. All and all this place would have brought in 10.3k gross when complete. Can you say cash cow...The asking price was 298k which was on the moon. The repairs were 6k per unit and the were 4 long term tenants there now (20 years). I worked up the cost and offered 180k with 30 down and he carry the note at 6% for ten years so that he could make more money and we could have money for repairs. He came back with 279k with 50 down and 5 years. So, i said no and waited 45 days and made the offer again with the following: 50k down and a sales price of 150k with the balance at 6% over five year. He came back with I really want 270k cash. So, I walked and will come back to revisit it in six months when the weather has beaten it up some more...
In Bako: Found out about an a pre reo from a short sale company (they did mine which I will talk about next) before it was listed with an agent. It was all 1/1 with a duplex and two one bedroom houses. They wanted 80k so I offered 35k and they came back with 64k which was a good start. I showed them the repairs needed and offered 40k cash (it's opm at 6%). This is still pending.
In Taft: same as above but it is a 2/1 that they wanted 34k for so I showed them the comps in the area and offered 15k with 2k down and they carry for one year or 18k with 3k down and carry for two years. The place is rented for 650 per month so the tenant would pay the bill and they wanted to buy it from me for 40k owner carry. Love it but pending.
In Lompo: I found several homes while driving for dollars that were empty or the listing had run out. One of the had been empty for four years and the owner lived out of state. I sent him a letter asking if he wanted to sell his problem home. Sent out seven letters and two responded with I want market price. One is still pending..
In Ohio: working on a six plex that my PM told someone from tx that called about wanting to sell her six units to call me instead. She did a walk though and made a list of repairs and I think I will get this for the pay off of the loan (152k). He had a crappy manager that was and still is ripping him off. This will eat money until I get them to the level I rent them at but will turn to a cash cow within five years. Who needs an IRA...

So during all this Ohio stuff and buying 4 acres of land and building our dream home the head injury came back to get me. One morning all hell broke loose when my feet would not work and I was sick as a dog..Up chuck after up chuck then the head pain that would drop a bull. Well to make it short the head injury from the DOJ gave way and I needed surgery now. Well you know how bad luck is right? The renters at two of the homes moved out and the money to cover the money we pulled out of them (150k each home)to buy more home and pay ourselfs back was not there. Tried to get the bank to work with me for six months but NOPE...So, I told them as of March I would stop making payments (people I am old school which means I pay what I owe and this really bugged me) because of the medical bills and the move out. Tried the loan mode and all the other crap they ask still...NOPE.. So in three months the notice came that everyone just loves to get...I called the bank and told them that we are going to do a short sale and that I needed a company in the area to work with. I got a good one...NOW: before I go on here I must say that I had wrote about this before and was told that they (some people on this site that I follow what they say and respect what they have done in RE)consider what I'm about to talk about as bank fraud. If you find that this is the case I'm sorry but this is what I had to do to make it right by my partner and myself. So, back to where I was I got a really good short sale company in Bako and they gave me the agents info. Called and told the agent that this will be the easiest SS he will ever do. I told him that I had a buyer in place for both SS and that it was all cash. Now all we needed was the company to get a good price with the bank. The bank came back with 50k each (from 150k interest only too 50k). I let the company know that the comps in the area are way lower than that like 23k. They came back with 40k and I said that I would not sign off on that (remember on a SS the owner has to sign off on it). They came back with 37.5k and I said deal even thou it was still alittle higher than most. These homes were done with renters back in place now. The way this happened was that my buddy in town had several homes free and clear with approved heloc loans in place at 2.50%. So, he bought both homes for 75k at 2.5% interest. He agreed to let me have them back in a few year at 6% interest plus the 75K. So, reading this you would think that the bank lost right..Wrong let me tell you what happened...
The bank got 48k in payments from me (interest only so it's all profit) then they got bail out money to the tune of 80% of the loan amount (150k -20% = 120k so if you take 120+48= 168k on a 150k loan. Do you see why the loan mods are not working they make more the other way. So, I worked my but off in 100 degree weather to get these homes done so that I could let the bank take them because I had brain surgery....It was luck that I had a good friend and the right SS company. So his bank won,my buddy won, i won and what do you know the bank won.

So now the SS company is happy because we did both sales for 37.5k and closed them fast. They called me up and ask if I wanted the short sales from taft, lompoc and a few other areas because this one went smooth. I ask if this is before an agent gets them on the MLS and they said it's while we are talking to the banks... Oh yes I would....So, now I am getting deals sent to me that I can work with the SS company though the bank at a hugh savings. So far it's been two but if I get these more will come.. What a door to open up...Hell that was a garage door...

I just got off the phone with the out of state owner of a six plex that I have been working on in ohio. The place needs work but can be turned into a cash cow in about a year to a year and a half. Poor venting in the roof has caused some mood issues in the bathrooms and the rain gutters are not flowing because the under ground drain that carries the water away from the building is full of rocks from the driveway because it has holes in it. Water is staying next to the building. Easy fix but it takes money and time and so on. He tried to find out what I would pay for the units if they were in turn key shape. I told him that they are not and that I would like to wait for the cost of repairs to be completed first. This will be a subject too or I will walk away from it. Will let you know how it turns out...

I am so glad you have started your journal. It has been a very interesting read.

Karen

I have started working and partnering with a member here on the site for a deal in Tx. He found a 2/1 in his small town of coleman that has been sitting empty for awhile now. There was a for sale sign in the front yard so he called it and found out that he wanted 10k for it. He talked him down to 8.5k and ask me for help. After some checking, the house is worth 25-35k in turn key shape so I ask him to give me a repair cost and time frame. 3k in repairs came from him with pics and more. Not bad for a newbee...I ask him if I could get the guys number so I could find out a few things and work the deal more. He gave it to me and I made the offer last night for 7k because of repairs. He said he will need a few days to think it over and would call me back. If it is a yes I will partner up with my DG bud and do a rent to own for 3k down with a 500 a month payment with a sales price of 25.5k in two years. My dg bud will make 1k for the work and 150 per month for being the PM. In the end he will make 1/3 of the profit (three people in deal). He is happy, I am happy and the owner will have gotten a house moved that would have sat for years. Win,win win on the the next if he says yes...And we already have one lined up. Get out there and MAKE it happen people

Thank you for reading the book. I will write as it happens everyday if I can. Val is planning a trip to Ohio to check out her properties and close on the last one. She got alittle nervous for a minute there but with your help and mine she pulled though. You Ms Karen need to get a deal done. I have been reading you for awhile now and you are pass due here...You are on here alot so I would say take a few days off and go get a deal locked up.

Spent the weekend in taft moving stuff to our new job site. Earlier this year we had a fire at one of the homes next to a 3/2 that we had bought two years earlier. That fire ended up burning up our trailer and the house. The trailer was insured but the house had not been lived in for years and was boarded up so they would not insure it. So, this weekend we bought a fema trail (great deal) and set it up at one of our empty lots. It is done and we will never have to move it again....Amen to that... Got two empty connex boxes from the city for free because of my business and moved them onto the back of the lot and put all our construction material in it. Another done ..amen Cleaned lot, put power and water to the trailer. We dug (yes by hand) a new septic tank (three 55 gal plastic drums) with a leachline two weekwnds before. Another big one done... Moved 6,500 lbs of bad concrete to the dump,,,And I feel that one.....The best thing is I plastered the town with bandit signs (25 in all). They are eight foot up and nailed in so good luck getting them down boys..lol
Back to work and RE in the morning...Go get them people

where did you find the FEMA trailer? We were looking for a portable storage shed for a project and that may work. Keep up the good work!

where did you find the FEMA trailer? We were looking for a portable storage shed for a project and that may work. Keep up the good work!

This was in the locale photo add under trailers. It stated that it was a park model and could only be used in a full hook up park (no storage tanks). Check this out. The guy that I bought mine from bought five from an MP that worked on the base and bought all 200 units for 106.53 each..yea that was 106. Sold the all in lots of ten or more...Great goverment deal there. The base paid 3k each to have them moved from Tx to ca...He was in the right place at the right time and managed to pull this off without getting in trouble. I thought this guy was full of it but the title paperwork showed it all..He sold them all for 2,500 each and make 50k in two weeks...Nice.. They are 32' long and have a full frige in them,queen and small bath..There are hundreds still in tx and a few other states...I paid 4,700 for mine and I will rent in out this next summer and get all my money back plus some...

So, when we got to Taft at 10:30 pm on Friday night and unloaded the tools and our bags I locked the truck and went to bed. At 2am woke up to dogs banking at the house next to us but I didn't hear anything so I went back to sleep. At 8am I found out why...I forgot to roll a window up that was all the way down and I got robbed. They took all the property keys and my check book...Real nice....I spent three hours with the bank and every check cashing place in town to make sure they get no money.. Most of the keys had been changed out from one house to another so only we know what was what except for two and I had those changed on Monday..
On Saturday I had my contractor come over and give us a quote on a duplex they we need to get done. He ended up being cheaper that us so we let him have the work and now I am pulling the permit for that. No, calls on the signs yet which is a surprise..maybe the sign police got them...

Keith!
I'm sorry you got robbed! that is terrible! luckily you put away the tools... now you know... when you hear a dog barking, go and check!
(that happened to me once when my husband was away; except I didn't hear a thing because we have double pane windows-to block the noise!

You are working a lot in Taft lately-that's great that you are getting someone to get your properties rehabbed-more time for you to put up bandit signs!

Learning and progressing every day,
Valerie

Yea I can see the papers now..OUT of town landlord beats drug user to death wearing nothing but his underwear...In any other town this would not be normal but Taft....

Keith,
I didn't say to beat the poor old guy- hey, I think that if he had just seen you, he would have run as fast as he could! (I'm picturing this in my mind now...)

Val

Well it goes to show that dumb people are just that. They tried to cash a $400 check today in taft from the checkbook that was stolen from my truck Friday night. Well that didn't happen for HER...They called me and I called the police...They arrested her today and the police are looking for the #%%%%%$& that went into my truck (him) so we can get the keys back...Good police work there.....
Starting on new project next weekend (duplex) with the contractors we hired to do the roof, front and back porch. We will start on the inside while they are working on the outside. When this project is done it will rent for 450 per side (2/1) and will take about thre months because of funds and permits. We will then turn our attention to the last duplex and the other two empty lots for MH. I will push to get everything done by the end of next year...Let's hope anyway...Lol

I have been working this deal for about two months but as of last night we came to an agreement. The owner had contacted my property manager in ohio wanting to sell his six plex since he now lived in Tx. The manage he had was ripping him off and letting the place go to hell. He changed manager to my but still wanted out of this money pit. I ask my PM to give me a break down of the cost of repairs once I talk with the owner. I found out that he bought it in 08 for 229k and had a loan then for 172.4k at 7% with a ballon due in 2018 for the balance. He stated that his payment was 1,500 per month and the rents when he got them was 3,600. Property sits on 1.25 acres of land and has six seperate apn# which means I can sell them off if I have some like of HOA in place to cover the shared roofs and walls ect...
So, the PM came back with a bigger than planned repair list of 50k for all. But, she stated that most repairs can be done over time...She stated that for 152k which is the pay off it is a great area and deal.. She said that there will be a waiting list on these for sec 8. Made the offer subject too and he took the deal. THIS is a true no money down. The rents from my other properties there as well as the four units that are rented now will pay for all the repairs and in about two years I will have a real nice net egg. Winter is the only slow down in ohio...They are out there so go get them people...You can read more on this and others at my journal (kebs later years). Good hunting

The 3/1 we have been working on with HUD in Lompoc looks like it will happen soon as well. The bank called the agent and ask us to resummit our offer (same offer) because they wanted to move this property off their books. The agent called me and told me this as well as the following info. The house had a murder/sus in it in 09. She just found out so she has to let me know about it. I told her to resummit the offer for less because if I sell it I have to let people know as well. So the offer is now at 60k from 65k which I could have went lower to 50k but I have this house either rented for 1,400 or sold for 120k. I want it to close....Good week