Not much to share in the way of “sexy” progress at House #3, but almost all of the demo work is now done, new subfloor added instead, all foundation work is finished, and about half the rough plumbing work.
Pay no heed to some of the newer studs and framing in the walls, as much of it is going to have to be re-done as that’s more stellar work that was done by the previous owner.
The owner of the vacant lot next door and an abandoned house two lots down stopped by while I was over there earlier today. I’d sent him a letter about possibly buying the two lots back at the beginning of December, but he didn’t put two and two together, and didn’t realize it was me that sent the letter.
I told him I was interested in possibly buying it but he didn’t seem too interested, and I didn’t really push things or try to give him the hard sell. He said that his brother wanted to sell it for $20,000 a few years back but he knows it’s worth more than that, yada yada yada…
The tiny little abandoned house really needs to be scraped, and the lots are both little 50′ x 100′ lots, which would together probably sell for $8K-$10K. They owe about $2,500 in back taxes, too, putting an even further kibosh on dreams of getting $20,000+ for the properties. I wished him luck, told him I’d pay him $10,000 in cash if he ever decided to sell, and left it at that. He seemed a bit offended but, hell, that’s what they’re worth and I just don’t have the time or motivation to make him understand that.
Part of the REI maturation process for me seems to be getting out of the mindset that opportunities are limited and that the universe is doing my as favor by offering up potential deals. That and realizing that some people will never, ever be realistic about what their property is worth, as it’s far too easy to build it up in their heads, as far as the money it will someday produce when sold.
With the properties I’m targeting at the moment, I’ve got virtually zero competition and, if anything, am doing any seller a huge favor in taking a junky old abandoned house off their hands, in a tough market to sell any house, much less a boarded-up, unloved one. That’s not to say I should be arrogant and lowball everyone to death and not do what it takes to get good deals done, just that it makes no sense to do a lot of hand-holding and cajoling in a market like this, especially if your expectations aren’t exactly realistic to begin with.
Spent a few hours this morning driving around and rustling up more prospects, as far as finding obviously abandoned, boarded-up houses. Added about 15 more to the spreadsheet I’ve been keeping for those, looked up the owner info online, and have letters ready to go out tomorrow expressing interest in buying them.
The jury is still out on the ultimate value in drive-by house hunting such as that, but it’s got other nice side effects such as helping me learn various neighborhoods in town better, as well as tendencies in appraisal values, and other stuff. For each one I find I enter in all the pertinent details I can grab online from the country records, as far as owner, owner address, if any back taxes are due, year the house was built and square footage, lot size, and what it’s appraised for.
If at all possible, I’d like to have another house similar to House #3 lined up and ready to roll, preferably even before we finish up House #3. Our contractor has a crew of five guys working for him at the moment and nothing else scheduled, so he’s fired up to get this one done and start another. Which is getting ahead of myself in some ways, but not so much in others, as I’ve already got a few good leads on tenants for House #3, and assuming I can find a similar small house for the next project, they’re pretty straightforward as far as the rehab.
