Feb
19
Poor, Poor Neglected Real Estate Blog
February 19, 2008 |
I know. Indeed. If this space were a house it’d have knee-high grass in the front yard, newspapers and collection letters for the last 19 occupants piled up on the porch, and tumbleweeds blowing past it down the street.
I’m still alive, still plugging away, and all that good stuff. House #2 has pretty much sucked up my will to live, which leaves me less than motivated to update here. Well, I exaggerate, as I’m not completely beaten down yet, more that I’m running at max capacity trying to juggle all my freelance work, work on House #2, the day job, the husband job, and who knows what else.
I’m probably 1-2 weeks away from finishing House #2, which is exciting, true ’nuff, but I’m way too tired and jaded for backflips. And even that finish date is conditional on, yes, you guessed it, the plumbers finishing their work.
Apologies to all the wonderful plumbers in the audience (or significant others of wonderful plumbers), as I’m sure you exist, somewhere, all two of you, but I swear, hands down, dealing with plumbers has been the absolute most frustrating thing I’ve done in recent memory. They finished all the rough plumbing weeks ago, it passed inspection, htings were flying, and they just had to come back to finish up a few things, just “an hour or two” of work, and bam, they were done.
And, of course, it’s been weeks now, and they aren’t done. To be fair (and I’m taking them at their word here), their father has been in and out of the hospital, and it’s just a two brother operation, so there’s a very valid reason for some of the delay. That said, I made the mistake of paying them 90% of the total amount due when they were last there, which is a fairly valuable lesson I’m learning on this project.
No matter how nice they are and how hard you’ve just watched them work, don’t let any contractor or subcontractor leave, no matter what. Use brute force and bribery if necessary. While rational, logical folks might think (and respond to) a statement like “We’ll be back tomorrow to knock out the last hour of work”, odds are great that you won’t see them again for weeks and weeks, if you ever see them again at all.
Especially if you give up any financial leverage you have and paying them what seems fair, as far as payinh 90-95% of the total amount due if they’ve completed 90-95% of the work. Because that last 5% will always cost more if you hire someone else, yet they have little incentive at all to come do the 5% left, as they’ll always make more money on other jobs. Don’t let them leave, but if they do, make sure they’ve got a financial incentive to come back.
So we’re waiting on the last of the plumbing to pour concrete in the new bathroom, which’ll let us finish the last of the Sheetrock in there, which is the last big thing other than painting and switching out outlets and 9 million other small little things.
On the brighter side, the wife of the furnace/electrician has been by twice more to look at the house, bringing her mom and sister to see it yesterday, and she’s sounding more and more serious. They’re looking for a house in town to move their family to, and her mom is going to move in with them. They’re looking for at least a 5/2, which is pretty damn hard to find, especially one that’s reasonably priced. She’d discussed converting the rest of the garage of House #2 into a small kid’s bedroom with her husband and they seem to think it’d work, thus the renewed interest in House #2.
They own the pre-fab house they’re currently living in outright, and their mom also owns the house she currently lives in, so other than the timing of selling/renting those houses, they’re really good prospects as far as getting financing to buy House #2. Don’t know about their credit but both have good jobs, income, all that jazz.
They didn’t seem too scared when I mentioned wanting to sell the house for around $145,000, which would net me about $25,000 in profits after taxes and commissions and all that. I’d take that in a heartbeat, as I’d really like to move this thing quickly. There’s also the possibility of bypassing agents and commissions entirely, as they’re pretty reasonable and savvy about real estate, so I could potentially give them a price break by going the FSBO route. So yeah, fingers crossed.
We did get an offer on House #1 from the lady interested in building a hair salon on the property, but, umm, it was less than stellar. I actually felt like Steph’s seller from awhile back who just countered with a huge handwritten “No!”. Which takes a bit, as I’m so ready to be done with House #1 at this stage, so I’m not exactly the pickiest of sellers.
Their offer? (The house is listed at $89,500; you’ll just have to take my word on it that even that is a bit low based on the comps, and of 3/1s in that price range, it’s definitely a nicer one, and their are some complete junkers listed at $90,000-$92,000).
They offered $60,000, a full $30,000 below list price, but that wasn’t even the best part. They wanted a closing date of July 31st, an option fee of $5, and a 90 day option period.
So, umm, yeah. “No!” I get the idea of lowball offers and that doesn’t insult me all that much, but the other terms were the ones that set me into fits of giggling. They did request that we counter their offer, though, and I wanted so badly to use reverso Homer Simpson logic on them and counter at something like $120,000, with a closing date in 12 hours, and an option fee of $5,000 and a 30 minute option period. I pretended to be a mature adult, though, and countered at $87,000 with reasonable terms, and they disappeared and we never heard a peep back.
I’m going to give it until the end of February but I’m pretty resigned to renting it at this stage and hanging tight for a few years. I’ll recap the whole sordid deal with actual figures and numbers when it’s rented/sold, but needless to say it’s been a pretty frustrating, especially since it’s entirely my fault that I didn’t make some quick cash on this one many months ago, or immediately rented it out and produced some cash flow.
Comments
3 Comments so far
Wow, a July 31st closing date? Seriously? That’s 5 months away.
I bet they just got back from a Ron LeGrand seminar.
Though using the “reverso Homer Simpson logic” would not have been nice, it think it’s absolutely hillarious! You kinda wish you could set up a spy cam to see their reaction upon reading the counter offer. You could have made $10K on AFV for sure!
Don’t give up! Warm weather and green grass is just around the corner. Well…. in a few months anyway!
Advise please, I want to flip houses for a living, but have read about 30 books and gone to countless classes but still cannot find the answers I need.
I want make a business of this, what is my first step? I want to be able to write off as much as I can on my taxes and get the most benifit of owning a business.
Is it a bigger benifit to flipping houses if you start out as a business? Or should I remain as just a investor with no business name?
Please help,
Rachael Ward