Update on 17 properties

Justin received my email to place contracts on 17 properties. One is already under contract. So now there are 16. To avoid me from having to write 16 earnest money checks and 16 option fee checks, I took pix of two blank checks with my signature only. Justin will make 16 photocopies of the blank checks and then he can fill in payee and amount for each contract. He uses docusign so I could electronically sign 16 contracts. But I would prefer Justin add my initials and signature to the contracts so I don't have to. But docusign works through my email address. I could give Justin access to my email address password so he could email me the contracts then go into my email account, sign them, then sign out. But i dont want him accessing my personal email account. Instead I set up a new gmail account to be used specifically for these transactions and gave Justin the password. Now he can send the docusign dox to that account, then he can go into the account and sign them for me, and then receive them back. I'll still have copies of the contracts in my personal docusign account. Justin has 2 HUD contracts to submit before midnight tonight. We'll get to the others this weekend. Christmas? Busy. Merry Christmas to all of you!

Shenandoah update, BofA, New Strategy

Shenandoah-the lender didnt like my offer, and the stated that there was an offer pending. Christie - is a BofA property. Note: BofA requires all bidders to he prequalified by BofA. Even though I'm an investor and paying cash, they want to pull my credit, see my paystubs, and complete a 1003. I asked the LO if she could waive the pQ based on my information. She said no. I told my realtor to submit my offer anyway with an explanation re the missing BofA PQ letter. We'll wait and see.
Justin sent me a list of 34 properties from the Richardson/plano/McKinney/farmers branch area. I cruised through and selected 17. But I decided to take a different approach. On a spreadsheet I put all 17 properties with asking price, then Zillow estimated market value. Then I added a column toff the tax value then another column for my market value per a market evaluator I use on InvestorBlock. Then I determined an offer price, property unseen. I sent the spreadsheet to Justin and told him to write up 17 offers (only one was a HUD property. The rest were individual owned or bank owned). Then I'll see what comes back. Probably counter offers. Then I'll visit those properties and determine the status of the counter offer. That way I don't visit 17 properties (gas and time) and I'll see who's serious. And I can use my option period to back out if I want to, or to amend my offer based on my inspection of the house. Yes, I may miss some good deals. But I will have a better chance of making a good deal on a good property. And I'm only trying to get one house right now anyway.
Any comments, let me know. Questions? Maschellhammer@yahoo.com. And please be sure to let a y of your friends or acquaintances that might be interested in real estate to subscribe by email to my blog and watch me as I go through the process of finding, buying, rehabbing and renting/selling a property. The more people we have involved, the better.
Mark

House Hunting

I looked at 4 houses this evening with Justin Miller with Keller Williams.  First house on W Spring Creek in Plano was a dog, too many foundation issues.  The second house on Shenandoah in Plano was a really nice house.  Occupied, it's a short sale.  I normally don't like those, too much paperwork.  But I told Jason if he'd do the paperwork we could put in an offer.  Market Value is around $125-$130.  Asking price is $106.  To get to 70% I need to be at $91,000.  Not a bad offer compared to $106 asking price.  I offered $60,000.  I can always come up to a counter offer.  And, being a short sale, it will probably take months.  We'll see.
Third house was on Spring St in Allen.  Bigger house, 2,273 sf, two-story, but a 4-bedroom.  Minor foundation problems, inside was nice.  New flooring and paint.  A few patch areas in the drywall, and a leaking bathtub upstairs causing an issue on the ceiling downstairs.  And speaking of ceiling, popcorn.  Biggest issues are redoing the ceiling, all new windows (all have lost their seal) and exterior siding replacement.  All is MDF board, not that good for long term.  I might consider redoing the whole exterior in hardiboard.  Expensive.  But the numbers.  ARV on this house could be $190-$200.  Asking price right now is $99k...already at 50%.  I'll offer $75k.  If I get it for that I'll put around $35k into the house and should flip this one for a profit of around $50-$60k.  If I rent it I would cash flow around $700/month.  But this house I would probably flip and get my cash out now.  It's owned by Bank of Oklahoma so, being a small bank (meaning, not BofA or Wells, etc) they may be willing to part with it quicker. We'll see what happens.
The last house was in far north allen, and was not worth the drive.  Small wooden house, 1,500 sf, reworked duplex, window a/c's, gas jet heaters (i.e. no central heating or air), two kitchens, a mess inside.  A total gut and redo, which I'm not into right now.  Also, not in a great part of town.  I passed on this one.
So house 2 and 3 get offers.
Tomorrow I look at two more houses with Vance, in Carrollton.  I'm working the initial numbers now, but will finalize them by tomorrow night and possibly submit offers on them.  Anyone who wants to accompany me to these two houses is welcome to join me.
With Christmas looming this weekend, I'll work this until maybe Thursday, then chill until next week on my return to Dallas on Wednesday.  Please be sure and call or email me if you have any questions.
I will try and take some pix in the future of the houses I'm looking at so you can get a better idea of what I'm looking at.

Princeton House

I went Friday night to view a house in Princeton.  Nice house, good price, but way out there. North of Rockwall. The address is 1200 N. 6th Street.  It's a HUD home.  Asking price is $46,000.  My realtor says HUD automatically considers any offer that's 92% of it's asking price (this house is open to investors at this time).  I offered $42,320 (92%). The bid deadline was midnight Friday night. We had it in around 11pm.  We'll wait until Monday to see if my offer/bid won.  House needs foundation work.  And 6th street is a fairly busy road.  The house is not in a subdivision.  And it has a church two doors down and a commercial property around the corner.  But for a rental property I think it will get around $950 a month.  The numbers weren't exciting on this property, but they were right at the basics.  Around $400 a month cash flow and $0 out of pocket with a $15,000 rehab budget.  Of course no utilities turned on so I couldn't tell about water/gas/electricity.
We also looked at the house in McKinney on Kentucky.  I didn't like this house that much. Minor foundation, so no big deal. But the house had no garage...just a two car carport, with a hodge-podge shed in the back yard. And the ceiling was popcorn that had enamel sprayed over it.  If it had been regular popcorn, I could accept that.  But the enamel over it meant that I couldn't match it in areas where I had to redo the ceilings because of the foundation issues.  So that meant having to redo the entire ceiling in the house.  And the kitchen would need revamping.  The house was "uninsurable" but we couldn't really see why.  HUD stated plumbing issues.  We couldn't see any visible plumbing issues, but, again, we didn't have utilities on.  It's across the street from a nice subdivision, so we can't really pull comps from that neighborhood because it's newer and nicer.  I'm not too confident about this house.
I also have another realtor pulling some houses in Plano for me that I'll be reviewing this weekend.  If I get the chance I may go look at some of them this next week and see what they look like.

Houses tonight

I'll be looking at 2-3 houses this evening after work. First house is in McKinney that Blake sent to me. If I buy it I'll give him a finder's fee or the right to participate in the deal with me. It a HUD home so bid deadline is midnight Sunday night. Numbers look good except no sure about rehab until after I see the inside. I've been trying to get into the 4 condos near Richland College but that realtors's staff is letting me down. Been 4 days and two people and still no appointment. I'll follow up this weekend. I plan on submitting at least one contract this weekend. Possibly 2. Much work to do before Sunday night. I'll keep you posted on the progress.

Updates

Well I hope everyone had a great Thanksgiving.  Here's what's happening in my new search for an investment property.  I still have a contract in on the Talisman property.  I'm assuming the bank didn't like my offer since they haven't jumped on it.  But no news is good news I guess.  I've looked at several properties on Saturdays and Sundays.  If the property is vacant, Lisa provides me with the code and I look at the house myself.  If the house has a Supra realtor key on it, then she has to go to open the house.  Most of the houses I've looked at are in terrible foundation shape.  I'm not afraid of a foundation issue, it's just that I cannot take the time to fix the foundation within my 4 week time frame to rehab the house, and I haven't been able to really tell if the seller/bank would be willing to drastically discount it for the foundation issue.  I looked at a nice house in Richardson one street east of Coit, south of Arapaho.  It was really working for me, a few small settling cracks, but nothing major. Then wham,,,the swimming pool.  I don't do swimming pools.  The agent (from Denton area) that was showing me that house is looking into the cost of turning under the pool and making the back yard back into just that.  Nothing back from him yet.  I'm looking at a couple of apartments by Richland College.  Some are cheap...$19,000 for 800sf, renting for about $600-$700 a month.  Pay Cash, get it back in less than two years.  Really doesn't fit my model/criteria, but looking at it just the same.  One of them will accept owner financing.  I've called the listing agent on this one.  Let him get the full 6% commission and maybe he'll do a good job for me and the seller.  Lifestyles Unlimited promotes this. Personally, I'll take 'em wherever I can get 'em.  Last, I was looking at a property in SW Arlington.  I'm not fond of going that far away.  Exception...I used to live and build in SW Arlington, so I'm familiar with the area.  Second, the house is about 2 blocks away from the street I lived on when I was building in SW Arlington.  Now I'm really familiar.  And, my brother Gregg, an attorney in Arlington, and who owns 3 rental units himself, now lives about 3 blocks away from the house.  He would keep an eye on it for me.  I had my (Arlington) agent called to get a showing appointment.  The seller (it's individually owned, which normally means a short sale) all of a sudden decided he wasn't accepting any showings.  His name is a foreign name, so I'm assuming he might possibly be afraid of what's happening with his home.  I told me agent to get me some information on the house re loan amount, monthly payment, etc. because I might be able to work an assumption...take over his monthly payments, fix up the house, then rent it out, or sell it.  But, I had to get in to see the condition of the house.  Again, the seller responded with no showing.  So I'll drop it and let the agent watch the property for me.  While I continue to look around.  No one said this was going to be easy.
I ordered 20 corplast signs, bright-yellow, that will have pre-printed "I buy houses.  Cash!" and my phone number.  Paid about $100 for them.  I'll start putting them up on strategic corners.  I'm also considering a magnetic sign to go on the back doors of my Explorer with the same message, in yellow and red.  Maybe this will start the phone ringing with calls directly from sellers.
Greg Norman and Blake Thorndike accompanied me last week to the offices of Sherman Bridge Lending (Hard Money Lenders) and New Western Acquisition (Wholesalers).  They are separate entities, but owned by several of the same people.  In my next blog, I'll tell you about that visit.  And I'll tell you about a "debate" I got into last Saturday night with a friend of mine who's an investor and realtor, and our differences about "cash vs financing".  I'll tell you the story, give you the facts, and let you decide which method best fits your goals.  It should be interesting.
Until then...

Post Thanksgiving

STARLING - Since my counteroffer of $105,000 was not accepted by the bank, I cancelled the utilities that I had turned on for the inspection (and for the future, I thought).  I also cancelled my insurance binder with Richardson Insurance.  Now I wait for the return of my earnest money deposit.  I worked and reworked the numbers, but it would have meant rehab costs totally out of my pocket, and that isn't within my business plan, unless the cash flow can return by OOP in at least 12 months or less.  That wasn't going to happen, so time to move on.

TALISMAN - My offer of $70,000 has not received a response, I assume because of the holidays.  Next week should let me know more.

These days you must move quickly.  I found a condo close to Richland College that was 1,300 sf selling for...$17,000.  FNMA foreclosure. Rent was around $900/mo.  I called the listing agent to see about availability.  Already under a cash contract.  Too late.  This one I would have paid cash for it.  ARV would have been around $55,000-$60,000.  Lesson is to always be looking, and to start calling and making connections and relationships with listing agents.  The listing agent on this property may have had a couple of investors in line when the property became available.  This is how you get "lucky" with the properties.  I myself need to do a better job of this.  Lifestyles unlimited had some pretty good techniques for finding listing agents using Zillow and then following up on the agents with a lot of listings.  It's a good system.  I will also begin this week emailing all of the realtors I've known as a loan officer.  Time to let them know that I'm back in the game.
Dan, we need to get together in the next few weeks and set up an "interview" time to review your property as a case study that the rest of us can learn from, once you've successfully closed on your property.  I will visit with Dan and visit his property so that we can have an intelligent conversation about this.  I'm not sure how we'll do this.  Maybe via phone, or using go-to-meeting of Skype voice.  I'll be letting you know.
I hope your Thanksgiving was plentiful and joyful.  Christmas is just around the corner.  There will be a lot of distractions, which is understandable.  But keep your antenna's up and your conversation going.  I was at my grand-niece's 2 year birthday party yesterday when a gentleman related to my niece's husband sat down next to me.  After intro's and how we were both "related" to my grand-niece, we got on the subject of retiring in Costa Rica, and how, with passive income streams, you could live comfortably the rest of your life in a caribbean paradise like CR or Belize.  With passive income from, say, real estate.  Then he asked me "so what do you do?"  I started slow with CPA, mortgage consultant, licensed LO, and real estate investor involved with helping individuals obtain a return at least 6 times greater than average  "safe, guaranteed" rate of return, especially with retirement money, like an IRA (self-directed, in other words).  We visited about 5 minutes, then I purposefully left the table and move to another table.  About 15 minutes later he came over and sat next to me and said that he'd owned some rental properties before, was out of them now.  But wasn't sure about how the SDIRA worked.  I explained it, discussed how it would work for him if his SDIRA was either my lender or my JV partner.  We spent the next 30-45 minutes talking.  At the end, he asked for one of my business cards (hint: get a business card.  Nothing fancy, just a method of someone being able to remember you with, so they can call you later).  We'll see if I hear from him or not.  Point is, you never know who you'll be talking to that will all of a sudden be interested in what you do. I got several of my private investor from the casual conversation, 10-second pitch.  Others I've gotten from just having a "meeting" of interested people at my house with beer and snacks to discuss real estate.  Discuss.  Not arm-twist.  If they're interested, they'll ask you.  All of my people have asked me how they can join in doing what I do.  I've never asked someone to loan me money or be my partner.  I would suggest you do the same.  Once they see you know what you're talking about, and you're somewhat passionate, without being like a used car salesman, you have a better chance of them coming around.  And if they ask about your experience, tell them that you're "partnered-up" with someone who has extensive experience.  That would be me.  And set up a meeting and we'll go from there.
Until next time...

Mark