It was just a matter of time! The next door neighbor two house down got his bike cover stolen yesterday and his next door neighbor said he was 100% sure it was one of the Hispanics that was working in my house! The cops showed up (when I was not around) at my house and question one of my guys. Turns out that he had video and cops checked it out. They decided it was not him..
I had a meeting at 12:00 AM to sign the lease and they gave me a call back saying that the girlfriend got cold feet and does want it anymore. Probably because she got a good look at my neighbor, he looks like white trailer trash. Oh well, back to advertising!
I have someone from back east interested in the townhouse.
My latest project is going so smooth, its scarying me!
I bought this property almost two weeks ago and I am signing up a lease for May 1st tomorrow. I will not need to pay a mortgage payment.
In addition, the rehab is going great. Interior painting done, kitchen cabinets will be completed tomorrow and my tile guy has 1/2 complete in the living room. I should have the bulk completed by the end of the week.
So, life is good! I have some good guys working for me from 8-15 hour. They are doing a great job.
I am very excited, I just closed on another property this week!
Here's my story..
I got a call from a gal in foreclosure that said she wanted to sell her house fast. After talking with her, I automatically knew that she was very " motivated". The property was a townhouse in the Northwest which is in my farm area. At the time, I didn't know when her trustee sales date was, but I automatically set up a meeting with her. When I got there, it was only the wife and she showed me around the place. It was a fixer, but it appeared to only need carpet and paint. There was a few cosmetics like a broken end cap of the counter, and plastic pieces missing from the swinging doors, etc It looked terrible, but I knew it would clean up nicely.
I immediately liked the floorplan, it was a 2/1 with one bedroom as a loft. What is interesting is the bathroom is bigger than in my 2000 sqft house! Its huge.
I asked for paper work and she could only bring up a few old statements and the trustee notice. My jaw dropped when I saw that the trustee sale was in only a week!
I already did due diligence so I made her my offer. She basically said "well, at least I'll get something for it and save my credit."
The only way to do this one is private money or buying it subto. Option #1 would be subto , but my private lender was primed to do the deal. I signed up for 85k. What was interesting, was there was a comps at 85k, 100k, 120, and 123k. I couldn't figure out why there was such a big spread. I concluded that investors must of purchased the lower ones. This helped me, because I could show her some real numbers. Since I didn't know exactly what the arrears are, I told her that her profit would be 85k less all liens and arrears.
We signed up and I went to work. I hired a title company to help out, actually, she did a wrap on the existing mortage. Its the title companys way of doing a subto. I setup loan servicing so I will pay the title company and they will pay the bank directly. Its 5% fixed interest for another year or so.
I spent $400 dollars to do an appraisal. After doing more research, I decided to put this one in my long term portfolio so I decided to make it a rental. I wanted to raise some cash before buying a rental, but this one will work. I did my own home inspection.
So, exit strategy is to fix up (5k) and do a re-fi. The tricky part is that the title needs to be seasoned for a certain time before qualifying for a re-fi. My broker said that I can do this in about 30 days. This could be a no money down deal!
Fortunately, we were able to get the payment to bank the day before the sale and closed! It took about 6 days and everything had to be perfect.
The deal is awesome because I 'm finding out the comps are 10k more than I thought. After cleaning it up, this could sell for about 130k! This is how crazy some sellers can get. There was a townhouse across the street from this one that had a sold sign on it. I called it the other day and the agent said that it was listed for 135k and sold in about a week! I don't know the sale amount , but you know its going to be high! How could these guys not do their research? I just bought a subto for 70 LTV.
The sellers are moving out tomorrow and got a new apartment. I had to give them some advice on getting qualified. Turns out the foreclosure was already on their record.
I'm going to get my guys to fix the place up starting this weekend.
One of the bloggers posted, "What are your feelings with all the doom and gloom talk about the RE bubble bursting?I think there will always be a good market to move money to, so I'm not as worried as many other are. Plus I didn't do any ARM's when things were crazy!"
The real estate market is always changing, and we are starting to see the end of one cycle and a start of another. Since I live in Arizona, I have nothing to worry about right now. Neither should you, the markets are driven by GROWTH rates and jobs, and we are strong right now in Arizona. This means more years of appreciation. The best advice I have for beginner investors is to study the markets to gain confidence in whats going on. Once you find out, you can use leverage.
I don't see gloom and doom in Arizona. However, if I owned a houses in California , I would be nervous if I don't have sufficient equity.
Yes, foreclosures are going to rise and ARMs will cause a lot of people trouble in the near future, but its going to bring opportunities for investors.
Real Estate is by far the best investing method for me. For example, I closed on a property today. I am bringing it out of foreclosure , I needed to spend 9k. I got an appraisal and I already have 31k in equity (without repairs)! I bought it 70 LTV on a subto. Absolutely fabulous!
I signed up a foreclosure on Wednesday. I am buying it subto and the trustee sale is next Thursday! This one is interesting. It looks like we'll get the "loan curement amount" the day before the trustee sale. This one is too close. I'm crossing my fingers. By next week, I'll have $1000 dollars (title insurance/appraisal) into the deal so I hope it doesn't fall through. We need to pay the arrears so the foreclosure will stop.
I'm setting it up so I can re-fi in just a few months. If it works, I won't have to put any money down for the loan.
Wish me luck. I'll provide more details when I have some time this weekend.