As far as what’s next, well, that’s a good question. I did renew the line of credit with the local bank I’ve been working with, as it’s set up as a 12 month product, so I’ve got funds to play with. I’m busy with Larry’s house for the next few months, but aside from that pickings are very slim at the moment on the MLS, as there’s really not anything available at the moment that’s even vaguely tempting, as far as either  a flip or something to keep as a rental.

Aside from being a bit burnt out in general, I’m also increasingly worried about where the larger economy is heading the next few years, along with the real estate market. Looks like we’ve staved off outright financial doom, which is good, but when even the government starts warning that 10%+ unemployment is here for years to stay, well, that’s not exactly a solid foundation for a rebound in the broader economy or the housing market, especially with plenty of REOs (and REOs to be) waiting to come barreling down the pipeline, and with the tax credit shifting some potential home sales forward but not exactly spurring on tons of people to buy who might have otherwise continued to rent.

I have been kicking around the idea of getting serious about building very small homes, as I do think there’s potential there, both as rental properties and as owner financed deals. Our tenant in the Wee House couldn’t be happier with the house, and I’ve talked to her a good bit (she is definitely an ear-talker-offer) about the house, my plans for Larry’s house next door, etc. She’s single, makes decent money as a nurse, but has no desire to be a homeowner again now that she’s older and her kids are grown, yet she also has absolutely no desire to live in an apartment building. So for her a 600 sq. ft. house is perfect, easy to clean, she has a yard and no loud neighbors above or below her, etc. Her rent is about the same as what she’d pay for an apartment, so in her eyes it’s a great deal.

Assuming there are plenty of people like her (and I think there are), I think there’d definitely be a market for simple little 1-1 homes, around 400-500  sq. ft. Something like this, from one of the Katrina Cottage plans:

If I could build something like that $20,000-$25,000 (which seems crazy at first but is doable if you keep it very simple), you might have a nice little revenue generator. I could rent a house like that in a heartbeat for $400-$450, so it’d cash flow if you kept it as a rental, but it’d also be something I could potentially owner-finance as well, as you wouldn’t have a ton of capital tied up in them, so I wouldn’t be pressured to get my capital back out of it quickly. Owner financing wouldn’t be my first choice, but again, I think there’s a potential market there, as I do think that the type of person who’d be willing to pay $35,000 for a house like that (single person with a decent job but not great credit; older person with some savings on a fixed income; young couple with income but bad credit) are increasingly going to have a hard time getting a loan the traditional way to buy even a small, inexpensive home such as that.

The biggest obstacle is the land cost, as far as a lot to build on, as that quickly becomes disproportionate to the size of the house and the overall budget. There are a few very small lots in town for sale which would work (one listed for $8,000 and another for $6,000, but both have been on the market for 2+ years, so likely some wriggle room in the price) but I also need to talk with the city about the possibility of subdividing standard lots into very small parcels for wee houses, etc.

So yeah, still scheming, but no immediate plans to tackle another big project in the near future. Larry’s House should keep me busy for a few months, which’ll also buy me some time to explore the small house idea a bit more, and put together some actual plans, get bids for various pieces of it, and see just what I could actually build them for.

I’ve been dragging my feet on the whole before/after photo production, but below are some collages I threw together, to give an idea of what went on. I tried to include the before after photos of corresponding areas of the house, but in some cases it’s not a perfect match:

The front and back of the house. The fridge on the deck we added in the back just hadn’t gotten moved yet, so no, the deck doest come with it’s own dedicated beer fridge. We also had to add a railing on the deck, as the city wuldn’t pass it without one because of the height.

Little more detail of the front of the house, and the back corner where we added the master bathroom, removing the door on that corner that accessed a laundry room and the kitchen.

The big living room where you enter from the front door. Pretty happy with how the original hardwood floors turned out after refinishing and staining, and the beadboard on the walls and ceiling was actually original as well, hiding under the carpet and sheetrock in the before photos. We added the interior French doors and the yellow bedroom for the 3rd bedroom (which is pretty tiny, but still technically a bedroom), as well as the French doors that lead from the yellow bedroom out ono the back deck.)

The other side of the living room that leads back into the main part of the house, as well as the French doors leading to the deck from the 3rd bedroom.

The master bedroom, plus the sitting nook and desk nook we added. We also added the French doors and transoms, leading to the back deck. The master bathroom is off to the left, which was all new as well, as the house previously just had one bathroom.

Master bathroom, which is all new from scratch and was previously an unfinished laundry room. Jacuzzi tub, tiled walk-in shower, and his and her vessel sinks. Struggled to get a good photo of it but I was really happy how this turned out, as it wasn’t a huge space but we managed to pack a lot in.

Not the greatest photos here, either, but this is the big dining room and the kitchen. We completely opened up the wall between the two areas, and added a laundry room area in the back of the kitchen. All new hickory cabinets and appliances, sink, and granite tile. It’s hard to see the detail in this photo, but we tried something a little different with the dining room, as far as using clear-coated birch plywood on the walls, broken up in a staggered pattern that I use for tile. Wasn’t quite sure how it’d turn out but everyone seemed to like it.

The second bedroom at top, which we did almost nothing to other than new closets, and more details of the kitchen and the dining room walls.

And some miscellaneous photos of various areas already touched on, as well as the existing bathroom in the top left after it got  a complete makeover.

As far as the “important” stuff, I’ll show a final profit of between $15,000-$17,500 when it’s all said and done, after commissions, taxes, etc. Which is good, and very welcome, don’t get me wrong. But man, if I had to assign myself a grade on this one, it’d probably be a D-. And that’s quite possibly being a little generous.

This project took a lot out of me, as evidenced by the decreasing number of posts and updates here. Physically, mentally, you name it. I had a lot tied up in this one, as I was hoping it’d be my ticket out of the day job grind, but in the end it turned out to be not so much an escape but just more hard work, stress, and headaches. Not even really sure where to start, but a lot of boiled down to issues with my contractor. I thought we were at a decent place as far as him understanding the long-term potential of our relationship and treating me right, without a lot of supervision and whip-cracking, but no, not so much. I very nearly let him go at the tail end of the project, as it became pretty clear that he was absolutely milking me for all he could. Not in a dramatic or even criminal fashion, but in a constantly-doing-just-enough-to-show-a-good-effort-but-really-dragging-it-out for as long as possible sort of way.

And yeah, I know, big shock. Welcome to the world of contractors. But I thought 2+ years of working together had gotten us past that point, to where I could trust him and not have to be on site constantly to make sure shit got done. Turns out not so much, and he ended up way over budget on his side of things, which meant that I ended up doing far more work myself than I’d hoped. While I was working 60+ hours a week between my day job and freelance work, just to pay the bills, as my wife quit her job a few months into the project and still hasn’t found gainful employment. Add to that the fact that my day job somehow has managed to become even more depressing and frustrating, and yeah, I’ve been kind of depressed and not gung-ho about anything for the last 2-3 months, just trying to keep the trains rolling and get this house done and sold.

The real frustration is that if I’d been able to just work on this project full-time and manage the job, the house would have been sold months ago for a profit of $30,000-$35,000. No doubt in my mind at all, as this really was a project with that much potential, which I manage to half-ass pretty thoroughly, with too many balls to juggle, ending up with a nice profit in the end (which I’m grateful for), but one that really doesn’t change the equation, as far as the need for a day job, etc. Plus I feel like I’m back to square one with contractors, without anyone I can trust to run a job on budget unless I’m constantly there. Which I can’t be, because of the day job, which I can’t even think about leaving due to the economy and my wife being out of work, etc.

And so it goes. Not really sure where this leaves things, as far as my REI plottings. I don’t really feel like I’m able to tackle another major project like the Creek House, at least not now, and that leaves pretty slim pickings on the MLS. I’ve thought about getting more serious about marketing for deals off the MLS, but again, just not a lot of spare time floating around, and I almost feel like it’s pointless as a great deal could pop up but if it involves a major rehab, well, I don’t know that I could pursue it. And just to be clear, the current contractor I’m working with is the fourth contractor I’ve tried, here in small town USA, so I do realize that there are lotf of better contractors in the world, especially ones that respond well if you treat them right and can potentially offer a ton of work over time.  I just haven’t been able to find one yet.

For the moment, though, it’s a bit of a moot point, as once we sell the Creek House I can get serious about rehabbing Larry’s House, which I got at the tax deed sale and have been working on a bit here and there, as far as demoing it out, prepping the exterior for paint, etc. I’m trying to do the whole rehab in cash, so I’ve been holding off on the major expenses like electrical and plumbing, but hopefully I can be done with the whole rehab by Christmas, once I have a little money to play with. It’s a complete gut rehab but it’s only about 300 sq. ft. (no, really, it is) so it shouldn’t be too painful. Famous last words. Ha.

]]> http://www.flipthyhouse.com/2009/10/25/creek-house-very-nearly-sold/feed/ 0 http://www.flipthyhouse.com/2009/09/01/and-he-emerges-finally-from-distant-circles-of-house-flipping-hell/ http://www.flipthyhouse.com/2009/09/01/and-he-emerges-finally-from-distant-circles-of-house-flipping-hell/#comments Tue, 01 Sep 2009 14:20:33 +0000 Seth http://www.flipthyhouse.com/?p=272 So, umm, yeah. Hi.

I’d apologize for the pages here going dark for so long, but sometimes you get what you pay for. Ditto to not responding to snarky, gleeful emails about my implied demise or demands for updates about the progress of the Creek House, etc. Sometimes you get what you pay for.

My own snark aside, man, it’s been a rough few months. I finally finished up the Creek House yesterday, with only a few tiny odds and ends left, and signed all the paperwork with our realtor to list it and hopefully get the damn thing sold.

As far as catching up on where I’ve been the last few months and what happened with the project, well, it’d take a novel, but the short version is that I had to pull our contractor off the job when I got back from Vegas July 15th and basically finish all the remaining work myself. I’d expected to come back from Vegas to a finished house but the reality couldn’t be further from that, as not only did my contractor try to bill be basically three times what he should have, but tons of work was still unfinished.

Pretty disappointing, and demoralizing in many ways, as the budget was already about 10% over what I’d hoped for, so not only were juicy profits swirling down the drain, but I was suddenly faced with absolutely busting my butt over the next month and change to get it finished myself, as that was the only way I could hope to still show any sort of profit on the job.

So that’s basically what I did, and where I’ve been the last few months. Add to all of that the fact that I’m basically working two other full-time jobs at the moment, and free time and motivation to update these pages was pretty lacking.

But I managed to get through it, and I’m still here, and will get a post up shortly with before and after photos of the Creek House as well as all the gory details about blown budgets and potential profits (ha) and all that good stuff.

And, against every fiber of my being that wants to never own a house again, I’m starting work on the Larry House, as the redemption period from the tax deed sale has expired, so it’s all mine to start messing with.

On the bright side, at least the kitchen of the Larry House is in perfect, move-in condition:

No, seriously, that really is the kitchen sink in Larry’s House, and not the most disgusting image I could find on Google Images.

I’m here in Vegas from June 30th to July 15th, working my annual freelance gig updating the bwin poker blog for the fine folks at bwin. It’s the third year I’ve been out here for the Main Event working for them as a blogger-type for what’s a pretty sweet gig (especially since I play a lot of poker myself), as we’re staying at the Palazzo this year, so the accommodations are, umm, pretty nice.

My only mixed feelings are that I had to leave the Creek House about a week or so from being finished, and the last few weeks on that project have been pretty hellish. I’ve been killing myself the last few weeks trying to finish it up before I had to leave, and, despite all efforts, it just didn’t get done. Pretty frustrated with my contractor at the moment, as he started strong on this project but just completely dropped the ball the last month or so. I’d go into all the gory details, but, for the next few weeks, I’m just going to let that stuff go and enjoy myself in Vegas, as there’s not a damn thing I can do about it and I did everything I humanly could (plus some) the last 3 weeks or so to wrap that project up.

Even with the delays and being way over budget, I am pretty happy with how the Creek House has turned out. A potential huge profit has dwindled to a potential big profit to a potential decent profit, but I’m pretty confident that it’ll move quickly when it’s finally listed, as it really is head and shoulders above comparable stuff on the market, and I at least bought right when picking it up, so I’ll still likely make some money when it’s all said and done.

But yeah, major changes in the future if I continue to work with our contractor, as this current project went way over the line as far as what I can accept and deal with as part of doing business with small town contractors. I’ll bend over backwards more than your average monkey in an attempt to keep things friendly and smooth, but even I’ve got a breaking point.

We’re about 2/3rds of the way done with the Creek House, with most of the heavy lifting done, shifting into sheetrock/paint/tile mode. I’m hoping to be done by June 5th, which will take a little hustle but is still very much doable.

The budget is still on track, and it’s looking like we’ll come in at about $45,000 for the entire renovation. I was initially hoping to keep it at just under $40,000, but the plumbing gods had different things in mind. We eventually got a bid of $5,400 for the HVAC installation that we went with (which was close enough to the $5,000 I budgeted for that), but the best plumbing bid we got was for $4,400, way off the $2,000-$2,500 I was hoping for. (And that one turned into closer to $5,000 when they discovered that the waste line tying into the city sewer had to be completely replaced and re-routed, with two new cleanouts added.)

Overall, though, this job has been clicking right along, and I’ve been much happier with our contractor on this job, as he’s hired on some more guys and we’ve been able to do better with scheduling both work and materials arriving, so we haven’t had as many wasted days as on the last project.

Recent sales activity and comps are also pretty encouraging. The market is far from going gangbusters, but what is moving most are 3-2s in the $115,000-$130,000 range, and those are almost all generic, boring starter homes, 1200-1300 sq. ft., builders-grade fixtures, smallish lots, cookie-cutter construction, etc. The Creek House will come in at 3-2, 1,600 sq. ft. on a half acre lot, and pretty much blow everything else away as far as upgrades (12 foot ceilings, backyard deck, French doors, and all that good stuff) and should be a quick, easy sell at $129,500. I’ll be at around $85,000 as far as total invested in the property, so anything in the mid 120s would make me pretty happy.

I’m heading out to Vegas for another poker freelance gig from June 30th-July 15th, so I’m not sure what immediate REI plans are going to be, once we finish up the Creek House. Unless something too juicy to pass up falls into my lap, I may take a break after the Creek House, and knock out some more work on our personal home, as well as prepping Larry’s House for renovation in August/September, when the redemption period expires.

We’ve been getting more plumbing and HVAC bids, and I had to share the plumbing bid we just received. We’d hoped to use the plumber from the last job but his bid (all the plumbing bids are labor only as I’m supply all the fixtures and materials) was for $2,800, and I was pretty sure we could get it done for at least $2,000, maybe even slightly less, so we’ve been getting more bids.

To briefly outline the situation, the existing plumbing was upgraded 2 years ago, as far as all the plumbing in the existing bathroom, connections to the hot water heater, and the waste lines from the kitchen and bath, all the way to the street. All that stuff is good to go, inspected, signed off on, done and done.

We’re adding a master bath (toilet, double vanity, walk-in shower, Jacuzzi tub), and the plumber will need to run supply lines to the existing kitchen sink (the previous owners didn’t get that far, for some reason, as that sink is plumbed only for the waste line), add lines for a dishwasher, and add the necessary connections for a washer/dryer.

One important thing to note is that due to the layout of the house, all the plumbing work is highly concentrated. The existing bath and new master bath we’re adding share a common wall, and both share a common wall with the water heater and where the new washer/dryer will go. Except for supply lines for the kitchen sink, all of the plumbing work required is in a highly concentrated area, literally all within a 10′ arc. And there’s also a ton of space both in the attic and under the house (pier and beam foundation with a ton of room), with very easy access on both fronts as far as running vents and lines underneath the house.

So yes, indeed, there’s some plumbing work to be done here. But on the grand scale of plumbing work, this isn’t a ginormous job, and it couldn’t be laid out more conveniently, as far as location and access. For a general yardstick of what work runs around here, I had one of our rental houses (3-1, 1300 sq. ft.) completely re-plumbed (replacing galvanized with PVC/CPVC) for $1,900, and had a flip property (4-2, 2000 sq. ft.) 75% re-plumbed (with a new bathroom addition on a concrete foundation that had to be cut/jackhammered out) for $4,500.

So what was the bid (labor only) that I just got back for the Creek house?

$11,100.

I nearly spit out my coffee when our contractor called to tell me that. I mean, it’s more amusing than anything, and I always love a chance to vent and spleen about plumbers, but geez. I am most definitely in the wrong line of work it seems.

I guess I find it interesting more than anything, both from a business and psychological perspective. I just wonder what goes through someone’s head when they give a bid like that, one that’s easily 4x-5x what it should cost. Especially when you’re talking to general contractor who has clearly told you that it’s for a flip, that the owner didn’t just fall off a turnip truck, etc.

I’d normally chalk it up to a sub who wasn’t really interested in the job and just threw out a huge number, but this guy apparently really wanted the work, as he has called back twice already to see when he can start, mentioned that he had a crew ready to jump on it immediately, etc.

Does it work out for him in the end, even if only 1 out of 20 people are foolish enough to agree to a bid like that? Maybe so, but that just strikes me as such an odd way of doing business, as far as the majority of people breaking out into giggles and shooing you out of the room when they get your bid, with your bills being paid by the select few that simply don’t know enough to laugh in your face.

No real major surprises so far, and I’m hoping we’ll be done with framing and the rough electrical by Friday, so that we can get that inspection done and out of the way.

While the electrician is rocking and rolling, we still haven’t signed off on the plumbing or HVAC bids yet. The total cost for the electrical was a shade under $6,000, which is a little more than I was shooting for (hoping to get it done for $5,000-$5,500) but reasonable enough, given that we’re ripping out all the existing electrical and completely re-wiring everything, and he’s got to wrestle with some old-school framing (wooden slat walls with lots of horizontal fire-blocking throughout) issues. That bid includes installation of all the outlets, ceiling fans, etc., as well as all the equipment/breakers to upgrade it to 200 amp service.

The plumber who worked on the Wee House have us a bid of $2850 (labor only), which was pretty disappointing, as this really isn’t that big of a job, since the existing plumbing was professionally upgraded and re-done just a few years ago. The new bathroom and laundry room are adjacent to the existing lines, so it’s really just a matter of tapping into it and running the new lines about ten feet, adding vents, etc. He also included $300 for the plumbing permit, which, again, is just sort of abrasively stupid, as that’s the first thing my contractor noticed, and he should definitely know better, as both of us aren’t idiots and know that the plumbing permit for a job this size doesn’t cost anywhere near that. I was hoping to get the labor on the plumbing done for about $1,500, with us tackling a lot of the easy stuff like setting toilers, installing valves and faucets, etc.

Pretty much the same story with the HVAC bid we got, from an installer that’s the son of our electrician. He’d done work for our realtor who was happy enough with him, so I was hoping we’d quickly get that sorted and crossed off the list, using him for the HVAC. Until he came back with a bid of $8,000, that is. We were planning on putting in a decent enough unit (5 ton 14 SEER Goodman heat pump), and the air handler does have to go in the attic and duct work does need to be run, but I as expecting something in the range of $5,500-$6,000. I priced the same exact equipment online from various wholesalers and even with shipping I can pick up all of the equipment new for about $3,000, so he’s basically charging $5,000 for labor (even more if he can get the equipment cheaper, which is possible), which seems pretty damn high for what’s not the biggest house in the world at 1566 sq. ft.

So we’re trying to wrangle more plumbers and HVAC installers over for more bids, and I guess we’ll see if I’m being unrealistic or not.

We’ve also had someone try to break into the house the last few nights, attempting to pry up some windows by the kitchen, and messing around with one of the garage windows. Which is kind of ironic, as I expected trouble of that nature working on the Wee House, in a much crappier, less visible neighborhood, but we didn’t have any problems over there.

Add in getting tax stuff sorted out and off to our accountant, getting the new tenant in the Wee House squared away, brow-beating the law firm that handles tax deed sales for our county into actually recording the deed in my name for the Larry House (which they finally managed to do last, about 6 weeks after the actual auction), and who knows what else, and it’s been pretty hectic of late for me.

But things are finally settling down a bit, as much of the work on the Creek House is stuff I’ve found is best for me to just stay out of contractor and crew’s way, as far as demo, leveling the foundation, and framing in the floorplan changes we’re making.

We’re hopefully taking lessons learned from the Wee House and improving the process this go around. All of this is still very much a learning process for me in many ways, and for our contractor too, as he typically hasn’t been tackling projects this big of late (he did run a larger crew in the past but not with his current crew, in our small town neck of the woods).

One of my biggest frustrations with the Wee House was all of the time we lost from a combination of not having materials on the job site and poor planning, as far as the order in which work was completed, stuff being left half-completed because something was missing, etc. Our sole hardware store in town has to order a lot of stuff and has little stock on hand, and too many times things bogged down while waiting for stuff to be delivered and arrive at the hardware store. It’s about an hour and a half drive, round-trip, to the nearest Lowes/HD, and my contactor would apparently rather eat crushed glass than make that drive.

Nothing was hugely delayed, as I’m mainly talking about a half day lost here because they ran out of insulation, or a morning lost here from re-framing the opening for the French door because when it finally arrived, it was 2 inches larger than it should have been, etc. But that stuff adds up, and I’d guess that we lost at least 1-2 weeks from the cumulative effect of stuff like that.

This time around, we’re trying different things to address that. The primary change is that I’m meeting with our contractor early, every Monday morning, and making a list of anything he needs for the week that the local hardware store likely doesn’t stock. Then, that morning, I go and buy it, so that there’s absolutely no question we’ll have it when needed that week. In an ideal world I wouldn’t have to babysit the process like that, but I’m more than happy to do that, if it keeps things moving.

Another change is that for stuff we do buy locally, the hardware store has agreed to bill us on a monthly basis. While our contractor wouldn’t admit this to me directly, I know some of the delays were more a cash flow issue, as far as him using the most recent draw I’d paid to him for labor and not having enough for materials. Not in an intentionally sleazy or scheming way, but more due to poor planning on his part, and the fact that he won’t pay out of pocket for anything and doesn’t believe in having credit cards.

(If you’re wondering why in the world I’d put up with the above in a contractor, well, it just sort of goes with territory. All the local contractors I know run a crew with 2-3 guys at most, and pretty much tackle smaller jobs here and there. Living in a small town has lots of advantages, but professional, well-funded contractors with an army-like crew that can bang out huge renovation projects in a few weeks simply don’t exist in these parts.)

Another big change, which he’s not thrilled about but I insisted on, is that we’re subbing out some of the work on this job, especially the sheetrock work. He sees it as a point of pride that he’s done just about everything in the world, construction-wise, and can do just about everything in the world. He also wants as much of the work possible that’s done to go to his crew, as they’re primarily working on just this project.

But we just can’t spend weeks on stuff like sheetrock that could be knocked out in a day or two by another crew, especially when that means that our guys can be tackling other stuff simultaneously. I’ve tried hard to get him to see the bigger picture, which is that he could actually make more money by subbing some of this stuff out, if it means we finish a week faster here, two weeks faster there, and are therefore able to tackle an extra house or two each year.

On his side of things, he’s making his guys work 8-5, Monday-Friday, which includes a mandatory unpaid hour for lunch. The last project got messy as far as guys disappearing to take care of tickets, run errands, get trucks fixed, you name it, then working on weekends to make up time. Which works, in theory, but a lot more gets done when the full crew is there working all day, as opposed to the same hours being put in but strung out throughout the week, when just one person was working on something, etc.

Nothing huge and/or earth-shattering, but hopefully some tweaks that’ll speed up things. We’re still waiting on bids for the plumbing and HVAC installation so no complete budget/timeline yet, but in general I’m looking at a rehab budget of about $40,000, with a goal of being finished and having the house listed by June 1st.

Working on the Wee House also made it pretty apparent that things run 1000% smoother (and faster) the more I’m on the job site. Aside from various decisions to be made about the actual rehab itself, contractor and crew obviously don’t drag ass as much when I’m there, especially when I’m there getting my hands equally dirty.

Which is a long-winded way of saying I’m hoping the Creek House may be a springboard towards doing the real estate stuff full-time, if everything falls into place as hoped. This is the first deal I’ve picked up with serious profit potential for a short-term flip (in the neighborhood of $40,000 net profit), and I don’t want to squander the opportunity, as that’d give me enough of a cushion to bid adieu to the day job, and split my time between working on houses and my other freelancing work.

Pictures of the Wee House coming as soon as we get the mountain of trash out of the front yard (today, hopefully) and the last bit of cleaning in the interior done.

No hitches yesterday with closing on the Creek House, and we got the roll-off dumpster delivered late in the afternoon and are ready to roll. Poked and prodded a bit more and discovered that the massive living room not only has original beadboard ceilings, but the same original beadboard under the sheetrock on the walls, as well. It’s odd, as that’s the only room in the house with beadboard, but I won’t complain, as it’ll save some time that we’d otherwise have spent on repairing and texturing the old sheetrock in there.

We also found the old stove exhaust vent under the sheetrock in the living room, likely for a pot belly stove, and I’m seriously considering turning back the page and adding a stone veneer hearth and fireplace, with a pot belly stove (very similar to this, but likely with a natural stone look instead of brick).

As far as work on the Creek House, this week we’re basically tackling all of the demo and about half of the framing work on the interior, as well as replacing a bit of exterior trim and window sills that are damaged and rotting and getting the exterior power-washed and prepped for paint. I’m still scrambling to finalize plans for the master bath addition and trying to cram in a laundry room, so I don’t yet have the grand budget and timeline finalized, but hopefully will by the weekend.

1) The Wee House is basically done and just waiting on our certificate of occupancy, as far as passing the final inspection.

Had a few false starts and stops as far as tenants, but a lady who lives just down the street is set to move in at the end of the month and has already paid the security deposit to hold it for her and signed the lease at $500/month. I probably could have talked her up a bit on rent but that’s what I was hoping to get for it, and I’d rather be done with it and get on to the next project.

One nice thing about renting to her is that she’s lived in the neighborhood for years, knows Crazy Larry, and is, umm, not at all timid and shy. When I brought up the Larry situation she just laughed and said if she sees Larry her response will be: “Crackhead! You’ve got ten seconds to get off my property or I’m calling the police!”

2) The only thing not done on the Wee House is installing the heating/cooling window unit. All I have to say about this is that Home Depot is the devil. The devil. It should arrive in 6-8 days, so hopefully no harm, no foul, as far as the orange devil making what should be a simple transaction a very, very difficult one.

3) We’re set to close Monday morning (tomorrow) on the Creek House, and all systems are go there. I was a little nervous meeting with the bank about buying that property last week, as they have to approve any purchases and repairs I do under the line of credit. No worries there, though, and we’re in the process of rolling the purchase and repair money for the Wee House out of the line of credit and into a 15 year note.

The bank is handling it all in-house so there’s a minimum of fuss there, and the SVP I work with said to not even bother with the appraisal, as the rent amount and finished product itself will easily support rolling it over into a 15 year note.

Total cost for purchasing and rehabbing the property came ot just over $31,000, well over my budget of $27,500 (boo) but not too terrible for a 2-1 that’s rented at $500/month, and would appraise for $45,000-$50,000. The monthly payment on the 15 year note (including taxes and insurance) came out at about $275/month, so not a bad little rental to have in my back pocket moving forward.

4) As far as the Creek house, still putting the budget and overall plan together. We did a pretty thorough inspection last week (and talked to the owner a bit when he dropped by) and it was a mixed bag, slightly more on the positive side.

On the positive side, the plumbing was professionally re-done a few years ago, so it’s all good to go. We’ll be adding a bath and laundry room, so there’s some plumbing expense there, but we at least don’t have to wrestle with old original galvanized plumbing, etc. The roof is also just 4 years old, so that’s good to go as well. Tugging on flooring here and there showed that the hardwoods throughout look salvageable (but we won’t know for sure until the entire carpet comes up) and the living room has beadboard ceilings hiding underneath the ugly ceiling tiles.

On the sucky side, while there are registers and returns throughout the house, there’s absolutely no ductwork leading to any of them. Odd, that. And there’s absolutely no insulation whatsoever in the attic. None.

5) A bit frustrated with the Larry House, as apparently the law firm that handles the tax deed sales for our county is absolutely dragging their feet and hasn’t yet recorded the deed in my name, despite the fact that the gladly took my $7,000 back on February 2nd. Getting anyone there to call me back has been a pretty fruitless endeavor so far. This sucks because the 6 month redemption period starts when the deed is recorded in the new owner’s name, not when the property is actually auctioned off, so the 6 month redemption period hasn’t yet begun, despite the fact that I purchased the deed back on February 2nd. I’m in no real hurry to get to work on that place, as far as waiting for the redemption period to expire, but the sooner the better.