OfflineSo as a lot of you know who have been keeping up on my last post I have been trying to get a deal done for my personal house. I had an offer in on a short sale and was working on an older lady to sell me her house...
Well talked with her tonight. Went over to her daughters house where she is staying now b/c she is in a wheel chair and sat there and just talked to her for about an hour...
The details:
Property was built in 1958 and hasn't been updated since then. Majorly needs updated but is very liveable. Has new roof, windows, furnace, and kitchen cabinets.
The bad: Of course it needs updating, like the bathroom, electrical panel, carpet, and paint. The major thing is it has a foundation problem and I can't get a loan on this property until that is fixed.
3 bed 1 bath 1700sqft not including the full unfinished basement 1.25acres. Hardwood floors underneath all of the carpet.
Asking 120,000
County appraisal 130,000
Zillow 146,000
totalview 156,000
Cyber 158,000
eappraisal 172,000
So foundation is going to cost around 10,000
I offered 70,000 and she countered at 90,000. We ended up at 85,000 and she comes in takes her clothes bedroom furniture and a few other things and leaves the rest. Including all the appliances and most of the furniture... So I figured I can sell a lot of this stuff and make some money back.
But I have to get it fixed before i can actually buy it. Well we are going to move in and do a mini land contract I guess you could say. I'll pay her for the months, prob only about 2, that I have to wait for the foundation to be done and get the loan finished up.
I should have 95,000 no less the 100,000 in it by the time I'm ready to get it appraised and approved for the loan. This property is approved for USDA so I can go up to 103% of the appraisal value of this property(Thanks Jan). So of course I am praying for an appraisal to come back equal to what zillow or total view has it appraised at...
Then I can pocket some money, use that to fix some things in the house or if I can pocket enough I can buy another property and use it for cashflow...
So thats my plan Sorry for the book!!!
Hopefully everything comes through!!!
Wish me luck!
Shaun
Great going Shaun, glad you are on the move, Hey, how many estimates did u get on the foundation work. Do they have to jack it up? Man, I would call around and get 3 or 4 bids. Could be a big swing in the price. Just my 2 cents. Have fun in your new house...Jan
She had 2 done last year and I had 2 done. Estimates ranged from 6,000 to 12,000... They have to jack up 1 end of the house remove the old block and put new block back in with rebar for reinforcement... Its about 200 block they have to put in...
Hey Shaun
IT has been a long time since I said hello to you. I hope you are doing well and having a great time working your REI.
I want to offer you one piece of advice because of something that is happening to a friend of mine.
Here is my advice....get an escrow to accept your payment each month and pass it on the the lady.
Here is whats happening to a friend of mine. About 2 years ago my friend Jackie and her husband put their life savings into an owner financed deal. Well...many payments later the man they were paying filed bankruptcy (Jackies husband died) and has informed everyone he is owner financing that he is going to sell their properties at auction in order to pay off his debt. So all the monies she and everyone who owner financed are getting ready to be gone and their homes will be sold.
The judge will have a hearing on the 27th of this month and decide if he will let the owner go ahead and sell at auction or if he will stand on the side of the people who have been paying on these properties and homes for so long. This has been in the news for a long time and the TV stations are following this to see how it ends. The lawyer said Jackie and everyone else should have been making their payments through a escrow agency.
Just want to make sure you are protected Shaun.
Sissy
"THE ARCHITECT OF YOUR DESTINY IS YOURSELF"
"SUCCESS WALKS HAND IN HAND WITH FAILURE"
Hey Sissy!! Long time no talk! Hope everything is going great with you also!! Thanks for the advice.. I really appreciate it! I will make sure that this happens!!
Thanks,
Shaun
Hey Sissy!! Long time no talk! Hope everything is going great with you also!! Thanks for the advice.. I really appreciate it! I will make sure that this happens!!
Thanks,
Shaun
Be careful with Zillow estimates. Your best bet is to get actual comps in the area and come up with an estimate yourself from the comps. You will want to take homes in the area that are the same bed/bath, size, and lot size, and compare amenities of each. (Ie, note if yours has a fireplace, and another comp doesn't, yours has a 2 car garage, and another comp only has a 1 car garage, etc., difference in ages, etc.) That is really the only accurate way to find out the true value of the home short of getting it appraised by a licensed appraiser; most of these sites are very inaccurate I have found from experience. So, please check well. If you have a RE agent on your power team, give them a call and ask for some comps in the neighborhood. Zillow and other sites that give appraisals and comps are often very outdated. Your comps should be sales within the last 3 months or sooner. The closer to today's date the comps, the better.
Hope this helps a little.
Happy RE Investing!
PS.. make sure to get several quotes on all the other things you are going to need to upgrade. One of the biggest mistakes is underestimating the cost to upgrade. Did you get a home inspector to check the internal things such as heating, plumbing, septic (if applicable), roofing, chimney (if applicable), mold and rot, etc. These things can really add up and cut into your profits.
I know this city very well and everything I have looked up on zillow is always really close to the actual comp... So far I have had great luck with zillow in my area... That may be a different story for other areas!!
Shaun
So was going to try and go USDA on this house and my mortgage broker just informed me that Rural Development is out of money at the end of this month... So USDA is out of the question...
I have a house that is in my name that I Land Contracted last year... This mortgage is FHA so I can't go FHA b/c you can only have 1 FHA loan at 1 time according to my mortgage broker... So I just emailed my tenant to see if they would like to buy a year early to get that FHA loan out of my name...
If not I have to go conventional and 10% down...
So we will soon find out...
Shaun
Sounds like you are stretched a bit here. Is there any way your broker can fast-trac the deal before the end of the month. I have a feeling that this thing with USDA is only a temp problem. check it out...Jan
I am going to have to check into it but he said he has 2 loans that he is doing USDA right now that have already went through underwriter and are approved for closing that are prob not going to close b/c they do not have the money to fund them... So I am hoping that it is going to only be a temp problem... I don't have to close on this property for about 3 months.
So maybe something better will come up with it...
Keep up the great work!
"If you cannot do great things, do small things in a great way.”
Napoleon Hill quote