The life and times of an Arizona Investor

This will be my personal journal to document my failures and successes during my real estate experiences in Arizona. All stories, thoughts, and successes will be documented..

Wednesday, August 31, 2005

Everything is falling into place. Offer #14

Today was awesome! Everything is falling into place....

I got a very good roof quote of $600 that covers a lot of work. In addition, I received a notorized "estoppel certificate" from my neighbor tonight. I sent it to him last night! What a quick turnaround. This document will protect me from anybody claiming the part of the lot. I do need the original to record it, but I have a faxed one right now. Jackie even contacted me today and answered some questions. Its been tough getting ahold of her.

The guy was cleaning up the 5 toms of trash today as well.

I called Jessica with the mobile home and she said she's ready to close tomorrow! She has the titles notorized and is willing to go to the DMV with me. Its funny, you go to the DMV to get title to a mobile home!! So I will do a final walk through and get it done.

Good investing!
|| Bginvestor, 7:36 PM || link || (1) comments |

Monday, August 29, 2005

Offer #14 The trash comes for free!

One day, some mexicans dumped trash in the front yard. Came from one of the other properties that an investor is buying from the same owner. Apparently it was a misunderstanding. Its never easy!


.. Posted by Picasa
|| Bginvestor, 8:41 PM || link || (2) comments |

Offer #14 in all its glory!


Posted by Picasa
|| Bginvestor, 8:41 PM || link || (5) comments |

Bids galore!!!

I got several bids on the tri-plex today. The tri-plex will be quite a job. I should have known this, but the job is much biggger than I anticipated. The will be developing a budget and keeping to it.

The biggest issues is the roof, duct work, painting, and flooring. There was a guy working on a NICE house across the street and he gave me a quote on flooring. To do 450 sqft of tile, its about $575 in labor per unit. His work is awesome.

It was a big relief to see that the duct work is much less than I had anticipated. I will replace two coolers , roof jacks, and some duck work. Will be around $1500. So far, I think the bids have been great. I used this guy before, he's the cheapest and does excellent work.

He suggested that the painter should trowel the walls before painting. The texture will look like the new homes. What a good idea, I thought it was cost prohibited, but this guy says the painter he knows could do one unit in four hours!

This guy also has a roofer that he works a lot with. He's cheap and does good work. Hopefully, his quote won't be much on the roof work.

So, if I hire out the major portion of the work, I will do the small jobs like installing toilets, counter tops, appliances, caulking, etc.. This should work well , and if the work goes as planned, I can have tenants in by October 1st. Of course, this assumes I can get the contractors to agree on a tight schedule!

So, things are going quite well besides the seller not returning my calls.

The main issues now are:

1) POA is faxed to title company. They are saying they need to see the trust that the property is held in. Crossing my fingers..

2) I need to let her know the results of the inspection

3) I need a copy and pay history from the current tenants

4) When is the house going to be re-keyed!

I got a call that the junk in front of the house should be taken away tomorrow (hopefully).

Good investing!
|| Bginvestor, 8:24 PM || link || (1) comments |

Double Wide closes September 1st!

I'm scheduled to close the double wide September 1st. I need both notarized signatures from the husband and wife.

A couple of issues have been brought up. First, the husband lives in Texas and will not be coming to Tucson to help the wife moved as originally planned. I told her if this transaction is going to close, she needs to get him to notarize the titles before the first. So she is going to over night the titles.

Secondly, she asked if she cold store her stuff in the outside storage shed for a week until she gets her apartment on the 8th. I said that would be ok, but she needs to have all personal belongings moved from the double wide.

It's critical that I close on the 1st or I loose several good working days. All I need to do is paint and floor the living room, and I could have the double wide ready for sale. Since the tri-plex is closing soon, I need this done!

For the triplex, the escrow officer didn't know how to deal with my lot issue? Is this inexperience? She said she would talk to the regional manager. I need to know if this is a big deal and how the title company suggests dealing with it. I need to know if it should be recorded, and who needs to notorize it.
|| Bginvestor, 8:12 PM || link || (0) comments |

Saturday, August 27, 2005

Appraisal and Inspections are completed!

We'll the good news is I don't have polybutyl piping. Its copper. The bad news is one of the ducts is completely rusted out (unit#2) and another one should be replaced immediately. All of the roof jacks should be replaced. AND there's one part of the roof that is very soft due to the evap cooler. I'm talking a 10' X 15' section! The roof is not in great condition, but I know part of it needs to be replaced.

So, I estimate I have an additional 8-10k worth of unexpected repairs. Damn..
|| Bginvestor, 4:44 PM || link || (0) comments |

Issue w/ Lot on Offer #14

There's a small piece of land that is part of the legal description of the tri-plex that is adjacent to the east side lot. Physically, when you look at the piece of land, it looks like its part of the neighbor's backyard! I do not have access to it because there's a fence.

If the neighbor tries to claim this land and gets it, I'm in trouble. I need to PROTECT my rights to this property, since without it, I don't have the necessary square footage to be legal for a 3-plex. Our attorney recommended an "estoppel certificate". I will contact my title company on Monday to make arrangements.

Fortunately, the owner of the adjacent pience of land is a nice guy and understands the situation. He is willing to cooperate and sign any necessary documents.
|| Bginvestor, 4:37 PM || link || (2) comments |

Thursday, August 25, 2005

Having trouble making up your mind, ask an expert!

I was talking with one of REI buddies and he offered to come over and do an "rehab" analysis with me. I consider him an expert, he's been doing this for several years owning four plexes and duplexes.

The key things that he was saying was:

1) He was expecting me to turn these units over quick.. He was talking days, not weeks.. He's going to push my comfort level for sure!

2) He suggested carpet in the bed rooms and tile everywhere else.

3) He suggested putting out my rental sign soon.

4) He said he would try and get tenants in on the first of October which would allow for an extra $1875 to go to my pocket since my first mortgage payment is not due to Nov 1st. Great idea! However, if I have to pay more than $2000 dollars in labor to make it happen, it may not be the best choice. I have to mull it over.

5) He said the common mistake for landlords is not lining things up quickly. He feels putting out the rental sign after closing is losing several weeks!
|| Bginvestor, 6:25 PM || link || (2) comments |

Wednesday, August 24, 2005

To work or not to work, that is the question..

Turns out that I'm quite the handy man, I have done full rehabs so I know I can do all of the work necessary. Not just floors and paint, but dry wall, texturing, plumbing, and whatever needs to be fixed. However, I need to assess how much work I want to do with this project. This is a weakness, because I know I can save tons of money doing it myself. And the work will be good. I don't have to worry about contractors not showing up or messing up the project. However, sweat equity is VERY time consuming or relatively slow. I already know that I cannot do everything.

For painting, I think its a no brainer to hire someone to come in and spray (Not brush) both units. They can do this in a matter of hours. However, should I hire them to mask off everything, or should I spend my time to do it and lower my costs? It will depend on schedule and budget! I think I can get a good deal with a guy I hired last year.

The units are dirty, so I will be hiring out help to clean them up. I have some good contacts with very good rates.

The floors are going to be a tough call. Do I do them myself or hire?? I just got done completing saltillo tiles in my bathrooms. It was the first time doing it, I and did everything myself. My wife thought they came out fabulous! These tiles are very time consuming because there's many extra steps from ceramic.

These units are going to be a long, long term investment, do you think I should tile every room or everything except the bedrooms?? I have to decide if I want to do this myself. This will take some time because I'll have to tile about 2000 sqft. Holy cow!

I plan on writing out my plan in detail in hopes of more experienced investors that do rehabs like Trisha or whoever can make suggestions. After my inspections this week, I'll know where I'm at.

Holding costs are steep on this one, so I need to work fast. Although, if I have a solid plan going forward, I can get these units up and running and get this non-performing asset performing.

Good investing!
|| Bginvestor, 12:41 PM || link || (5) comments |

Tuesday, August 23, 2005

Offer #14 - Foreclosure is stopped!!

Ok, she left me a message saying that the foreclosure has been stopped and the loan has been re-instated! This is a huge relief!

This was the biggest obstacle in this deal, the second will be any title issues from the POA.

I've haven't had much time to write about this deal because I'm so busy.. In this deal alone, I had over two pages of checklists trying to get everything done. Even though I'm the buyer, I need to make sure everything gets taken cared of for closing. This is when a realtor would be nice, however, I don't mind because I like to know exactly whats going on. We have only a 3 week escrow period, so if its going smoothly, I need to make sure everything gets done on time.

We're set for an inspection this Friday. I'm crossing my fingers that there is no polybutyl piping and rusted out duct work. This is my nightmare folks...

Unit #1 is vacant and it was trashed. Unfortunately, it looked worse yesterday than the first time. Its ok though.

I was hoping that unit#2 would be a regular unit with normal wear and tear, but nope, I saw through the window that the bed room ceiling had a 2 foot hole in the white board in the ceiling. Damn!! Now I'll have to replace white board and texture the ceiling in that room. Although I didn't walk inside unit #2 , the kitchen and living room looks ok so far.

The sellers did me a favor (I think) and ripped out the carpeting in both units. I didn't ask for this, and don't know if they thought they were doing me a favor? Actually, its for the best, I plan to tile both units.

Who's doing all this work?? I'm on a tight budget, so I will have to be careful. The interesting thing about this deal is everything is 3 times. 3 times the flooring, 3 times the paint!

I didn't want to put in more than 5k for all three units. This will cover flooring, paint, and cleanup for all three units. However, if there's more, the costs will go up..

I saw the property a little differently today than before. It was a bright sunny day and I could see everything clearly and for some reason the property didn't look as nice?? Maybe its the reality that I'm in escrow and now its time to do some elbow grease. Or maybe its because the front yard looks like sh*t because theres about a ton of carpet and junk by the sidewalk.

I saw a lot more work that could be done like exterior painting and new fences... I'll take pics later this week and post them and see what you guys think.

Oh yeah, I looked at my lot size and it appears that I have a sizable 17 foot section in the neighbors back yard. The lot dimensions shows that this is MY land, but it looks like the neighbors back YARD! What's going on? I'll have to go to the county and check it out.

Its never easy!
|| Bginvestor, 12:35 PM || link || (3) comments |

Monday, August 22, 2005

Is tomorrow going to be a bad day?

Well, tomorrow is the trustee sale for the 3-plex. Did the lender accept my contract and stop the foreclosure? Or are the sellers going to pay the arrears today?

I have no clue what's going on. I'm in the dark because she has not called me back and given me status. Argghh!

I doubt she will let it go because she'll loose over 30 or 40k in equity. However, you never know what to expect with pre-foreclosures.

Good investing!
|| Bginvestor, 11:52 AM || link || (3) comments |

Friday, August 19, 2005

The others are sold!

The out of state gal had other properties for sale. She told me yesterday that her cell phone betteries went out so I couldn't contact her (umm..)

By the time, she called my back, the others were under contract.

Too bad, since I had some friends that checked out the properties and were chopping at the bit to make offers..

We're going to LA today for a mini-vacation. Hope you guys have a great weekend!!!

P.S. You if you want to buy a property, just plan a vacation, and the leads will come right before you have to go. ;-)
|| Bginvestor, 7:38 AM || link || (1) comments |

Thursday, August 18, 2005

Miracles do happen! Offer #14 Accepted!

Guess who calls me yesterday? The out of state gal who had four properties! She told me that a friend in the family had passed away and she had been completely focus on that.

So, I am now under contract on the 3-plex! This is exciting, but I'm nervous because its a preforeclosure and you never know the twists involved. This one has two: a Power of attorney, and a trustee sale next week. Talk about cutting it close!

I actually did a walk through on one of the units. Talk about trashed!! It has spray paint on the walls and the floors are completely trashed. The worst part is the frig has been turned off with food in it for months!!! :-(;) It should be the worst unit, the other two (although I haven't checked it out) should be much better. Its all cosmetic!! The walls, dry wall, cabinets, fixtures are all good.

I screwed up the second offer on the other house, I started too low and didn't push to my walk away value. Now, I can't get ahold of her (again) and she had a deadline this noon from another investor . So I'm afraid that she went with him. It would have been a good one too with 30k equity if my numbers were correct.

So, with the double wide and tri-plex closing in the next month, I should have plenty to talk about!

Good investing!
|| Bginvestor, 12:12 PM || link || (3) comments |

Monday, August 15, 2005

And you wonder why I'm having a hard time finding a rental??

Oh my god, I never thought this would happen. Arizona out performs California!!!

Check this article out.. Look up your city to see how the madness effects you..

http://money.cnn.com/2005/08/15/real_estate/historic_home_price_gains/index.htm

NEW YORK (CNN/Money) - Single-home price growth over the 12 months ending June 30 was the strongest in history, according to the National Association of Realtors.
In its quarterly survey, NAR found that U.S. home prices rose at an annual rate of 13.6 percent, to a median price of $208,300.
Of the 149 metro areas surveyed, 67 showed gains of more than 10 percent. See table tracking all 149 markets.
David Lereah, NAR's chief economist, called the increases unprecedented. "When you look at appreciation of home prices relative to the overall rate of inflation, these are the strongest increases on record," he said.
The Phoenix market, up 47 percent since the second quarter of 2004, led all metro areas. The median home price there is $243,400.
Right behind Phoenix came several south Florida metro areas, including Cape Coral/Fort Myers, with growth of 45.2 percent.
Seven metro areas posted price declines; the most severe was in the Kalamazoo/Portage area of Michigan, where home prices have declined 3.7 percent, to $122,600.
The lowest priced market was Danville, Illinois. There, the average home is $73,400. Though that's up 16.9 percent from the second quarter a year ago.
The West beat all other regions, averaging an annual gain of 19.5 percent, to $312,600. The South had the slowest growth, just 5.7 percent to $179,400. The Midwest climbed 12.1 percent to $167,800 and the median home in the East is up to $243,100, 13.1 percent higher than a year ago.
Top 5 markets
1) Phoenix, AZ
Median price: $243,400
Growth: 47.0 percent
2) Cape Coral/Fort Myers, FL
Median price: $266,800
Growth: 45.2 percent
3) Palm Bay/Melbourne/Titusville, FL
Median price: $204,000
Growth:40.0 percent
4) Orlando, FL
Median price: $232,200
Growth: 36.5 percent
5) Sarasota/Bradenton/Venice, FL
Median price: $367,800
Growth: 34.3 percent
149 markets tracked. See which areas had the fastest growth in the second quarter and which have the highest priced homes. See the table here.
|| Bginvestor, 7:25 PM || link || (2) comments |

Sunday, August 14, 2005

Business is not on auto pilot..

It would be nice to have the business on auto pilot. Whenever, I go on vacation or get taken away for a month working on a property, its hard keep the leads coming in..

I've reviewed my business plan this weekend and looked at the past/present performance, and boy, I'm pretty disappointed with the results. The leads dripple in and once in a while and I get close to hooking something.

This reminds me alot about fishing, you've got the right GEAR, you know the fishing TECHNIQUES, and you fish ALL day, but you don't catch nothing. They call that fishing , but a alot of times its called you don't know what your doing!

Of course I know what I'm doing, but I need to find the holes where the fish are..
|| Bginvestor, 3:56 PM || link || (1) comments |

Rough as they come..

I just got back from checking out a 1980 single wide 14X70. Boy, this is as rough as they come..

As I was introducing myself, the TRAIN started rolling by about 100 yeards away!! I couldn't even hear him..

I started to walk through the property and every room has water damage, the carpet is trashed, and no pride of ownership.. It was in rough shape..

And the guy wanted 5k for it! Ouch.. Turns out he bought it w/ seller's financing (neighbor) and wants to make some money.

I didn't even make him an offer, I wouldn't come close to his asking price and didn't want to piss hom off or ruin his day.

Next!
|| Bginvestor, 3:47 PM || link || (0) comments |

Friday, August 12, 2005

Bummer!!

Unfortunately, I will have to move on and forget about the outstanding offers. Its weird not to get a response from an offer of only 97% of the asking price! Jeesh..

So far the double wide is still on track...

I'm going to see another single wide this weekend. This guy bought one for 6k, and is asking 5k. I'm glad I'm getting my feet wet in the mobile home market. Its not glamorious, thats for sure. You won't be able to impress your friends by doing drive byes, but nonetheless, if your getting cashflow, than thats all that matters.
|| Bginvestor, 11:33 AM || link || (2) comments |

Thursday, August 11, 2005

Status on offers..

I put in an offer on Monday and she told me that she needed to discuss with her husband. She has still not called me back! This really does suck.. Either she is very busy with life or may be blowing me off...

I don't get it, this property is going into foreclosure on the 22nd of this month and she doesn't seem to want to get it resolved?

Although this is an excellent opportunity, I haven't lost any sleep over it. I've learned with working with preforeclosure sellers for the last several years that you never get excited until you close the deal and get the keys.

Two years ago, I would have gone crazy waiting for this gal to call me back. I've put in voice messages once a day, we'll see if touch bases today or not..
|| Bginvestor, 8:09 AM || link || (1) comments |

Tuesday, August 09, 2005

Offers #11,#12,#13,#14

Wow, just what I've been waiting for. A gal calls me up (from my forelcosure letter) that has two houses , a 3 plex, and a four plex.

She lives out of state and two of the four properties are in foreclosure. I don't exactly understand her thinking, but she's selling these properties to investors only. My buddies are confused that she doesn't put them on the market w/ a realtor because these are in some of the hottest neighborhoods in town.

Obviously, she doesn't realize this. She has power of attorney and has done a poor job managing these.

Her asking price is approx. 80% market value. This is exciting, I've put in an offer on the 3 plex and am waiting for an answer. If I get that one, I'll try for one more.

Crossing my fingers that I don't get out bid by another investor. We'll see what shakes out..
|| Bginvestor, 8:07 AM || link || (4) comments |

Wednesday, August 03, 2005

More details - House #1

What a mess..

I found out from the personal property tax department that someone else (besides the owners) has been paying their property taxes for the mobile home!! Strange, this person lives in the park with a different lot. I guess that means his taxes haven't been paid. Boy, he's going to be surprised when he sells his place.

So, the question is, if I buy the mobile, do I have a chance that the city will reverse the payment and charge me the back taxes?? That would be around $400 dollars. Ummm...

The city was going to contact the park manager to clear this up.

In addition, I decided to send the contract to the husband to sign.

Its never easy...
|| Bginvestor, 12:33 PM || link || (3) comments |

Monday, August 01, 2005

Ball is rollin - House#1

I've switched offer #10 to house #1 since I am now officially under contract.

Today went surprisingly smooth. I signed the contract today and I gave her a $50 dollar deposit.

There are a few issues. First, the title does not state the correct lot #. She knows about this. Secondly, she said that she has authority to sell the place, but on the two titles (one for each side lol) it has her husband's name and her name on one, and the other has only the husband's name.

So technically, she owns half as far as I can tell. Good thing that he will be coming in to help her move, so he will need to straighten this out.

Secondly, she has not paid her property taxes and does not know how much she owes. She thinks they are about $200 a year, so she might owe $400 total . At least she expected this and said she will pay this off before closing. I will assist her in finding out how much.

One thing that kinda of sucked was I felt I needed to put the husband's name on the contract as well so technically its not completely official because he did not sign it. I should fax it over to him this week.

On the flip side, the hardest part of this deal (the property manager) turned out to be the easiest. She reminds me of a tired government official. I got in before she opened the office and I waited for her on the couch. She open the door and just stared at me for 10 seconds like I broke in to the place. I finally asked, "Are you the property manager". She responded abruptly. I told her my business and she immediately copied and handed me some forms. Her only concern was getting the lot rent. She didn't care if I rented or resold it. Interesting. She will have to qualify the tenant and does back ground checks. As far as I'm concerned this is fine with me. I don't want to put a criminal in my mobile either.

After a few minutes, she warmed up to me and she explained that the one mobile that I wrote previously, sold for 15k and the owner is taking back paper of about $200 a month. He gave them 3-4k down as well. This is going to be just like my deal! I looked at that mobile today, and it is in better condition right now. The new carpet does look good. When I get done though, it will be nice, I have left over laminate flooring that I plan to use for the living room. It should look just as nice.

Another issue that I completely forgot about is having a dealer's license in Arizona. Technically, if you buy, and resell mobile homes you are a dealer. I found out today that it costs $570 dollars , w/ $270 maintenance each year! I have to take the test in Phoenix and pass a back ground check and finger prints. Holy crap...

I called the mobile home housing and asked the question but I got conflicting answers. The dept in Phoenix said if I only do one this year, its not necessary. However, I thought the Tucson office said if you do one or more , you need it. Since I'm puchasing this under my LLC, I hope they won't give me grief if I don't have one. I'm pretty sure I'll be alright, but I will ask some of my investor friends' opinions. I need better definition between "dealer" and "purchaser". If I do more than one, I'll have to spring for the license.

Another nice surprise is that she had a washer /dryer that I did not even know about. Everything is staying!


Good investing,

Bginvestor
|| Bginvestor, 5:19 PM || link || (3) comments |
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