Real Estate Happenings

3 Apr

Last week, I closed on 29810 Greater Mack.

The total price was a little over $61,000.  I need to re-glaze the bathroom, paint and then I will rent it out.  I am planning on listing it for $1150/mo, but I’d be happy with $1100.  We will see what happens.  I will post the pictures before I put it up for rent.

I am still waiting on closing the 23802 Elmira deal on land contract.  This is a really good deal, but apparently there are some complications, because he is getting divorced and his wife filed for bankruptcy so we need to get clear title before we can move forward.  The good news is that he is working 16 hour days to save up money for the payments and down payment.

Some guy on 2+2 calculated the present value rate of return of the Elmira deal at 49.5% annually on a financial calculator.  If someone could tell me how he got that number (or if its right?) I would greatly appreciate it.  Sad (and lazy) request for a finance major, I know.  The terms are  – buying for 30k, selling it back to him at 60k in 5 years at 10% ammortized over the 5 years.  He has to pay his own insurance and taxes – so that’s a non-issue.

I wanna talk a little bit about the banks, since they are involved in almost all my deals.  The banks are like that super grumpy old man at the poker table who is just terrible at poker.  He is rude to everyone, asks for setups, blames the dealers, and is generally miserable to be around.  But because he is so bad, everyone lets his bad behavior slide.  The banks are the same way.  The banks make their own rules – have no code of ethics or anyone one to oversee them.  You don’t hear from them for months about a deal and when they say it’s time to go, you have exactly 48 hours to get your stuff together or the deal dies.  But, they are BAD at business.  I still don’t really know what makes banks make the decisions they do, but they clearly are motivated by reasons other than getting fair market value.  They will list a house for three times more than its worth.  They will not budge on certain houses, and then give away others.  On the Greater Mack deal, they wouldn’t pay me my real estate commission of $1200 bucks.  So I said fine, the offer just went down $2000.  They accepted the next day.  I didn’t even ask the reason, I’m sure some red tape or pure idiocy.  The way I get my good deals is I have a guy that lets me write the first offer on all of his short sales.  It gets the process started for him and I get to pepper tons of low ball offers at the banks.  Most of them get lost in the shuffle but once in a while, they accept or make a bad counter.

2 deals that are close to getting done were done via that method.

20901 Hawthorne.  Bid $20,000 originally.  Bank countered to $30,000.   I think I can rent it $800-$1000.  Its on a weird border between super old entrenched rich and a not-so-rich area, but the school district zones put it in the rich area – Making the rental demand high.

30206 Champine.   Bank is considering taking $60,000.  I think its worth $85,000 – 100,000.

Another deal that is still waiting to close is 28624 Mylls.  Shouldn’t have any issues here, not a great deal, not a terrible one.  Bought for 62,000.
Rent = $1000/mo

Also, I just saw that for the first time in forever, homes prices and rent prices are on the rise at the same time.  Traditionally demand for rent and house price move in opposite direction, aka inversely proportional, so if both are increasing in price, its a good sign for the market. Cash is king though because the banks still won’t lend.  Like I said, they don’t do anything right.   Just wanted to give everyone a quick update and I hope to be blogging more often.

2 Responses to “Real Estate Happenings”

  1. nasabuzi May 11, 2012 at 7:39 am #

    Very cool blog. At my old job I used to have to deal with guys who were flipping houses or buying them cheap and renting them out and they were always the funniest/weirdest characters. Just from what I have read you definitely seem to handle yourself better and know more then them. Good luck with your future business endeavors.

  2. nasabuzi May 11, 2012 at 7:46 am #

    Just started reading this and what I find you are doing is very cool. You remind me of some of the clients I would deal with at my old job who would flip houses with some work done to it or rent it out. These clients usually were pretty comical with just how they didn’t know the process at all even if you explained it to them several times. From what I have read so far it seems like you have your stuff together. Hope things keep going well for you doing this.

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