And The Search Continues

by ⋅ Leave a Comment

Well, we were in contract for all of three days. I sent the termination over just before lunch. As soon as the inspector entered the property yesterday, I received a text message from him that said: “For your safety…I can’t let you in here.” When I called to follow-up, he reported that there was so much mold, a high-quality facemask would be mandatory to even make entry. I believe he used the words “dripping down the wall” to describe the level of mold. This is hurricane flood-level mold:

Even the “new roof and gutters” that were advertised in the listing were improperly installed or never finished - the downspouts point straight down into the ground, directly at the foundation. The foundation has suffered tremendously as a result. The “new roof” was added without first installing new boards to replace the missing/rotted ones, so the inspector was able to see the underside of the shingles while in the attic.

The most unfortunate part of this failed transaction is that this property is in a great location. We were willing and able to make a sizable investment, both monetarily and with sweat equity. But, in all reality, this property should probably be demolished.

Just some brief stats about this deal: The duplex was listed for sale 46 days ago for $140,000. The current owner purchased it for $32,000 in September, 2014. The listing proclaims that the “[s]eller has installed new roof, gutters, downspouts, front and back porch overhangs in November 2015. Property has been cleaned out, trees removed and is ready to have a buyer complete the restoration.” Since September, 2014, there have been renovations and new-builds surrounding this property. The new-build single-family homes within one block of this property have been selling around $300,000 for about the last year. I first called the agent about the property about three weeks ago and he reported that it was in a multiple-offer situation over list price. Then, on Monday, I noticed that there was a price-change to $120,000. I offered $80,000, and the seller countered at $105,000 on Tuesday. We agreed, with the purchase contingent on inspection within 5 days. The inspector was there Thursday afternoon, and I cancelled the contract on Friday morning. The inspector reports that he is going to call the listing agent about his concerns. For the record, the property has not been “cleaned out;” according to the inspector, it also contains junk and feces.

Running in Place… or Circles?

by ⋅ 2 Comments

We keep trying, and failing, to move forward. I make an offer, and it gets rejected. We open up to a new neighborhood to move to, and the house is in a bidding war after being on the market for a month. The owner of BD’s sister buildings just texted, again, that he hasn’t come to an agreement with his property manager, so I am still not able to see the buildings. At least this time he asked for a recommendation for a new property manager, which I was able to provide. This is not at all where we pictured we would be at this point.

On a positive note, Mr. PFL and I toured a couple of open houses for very comparable homes (to our current home) in our neighborhood this weekend. The homes are listed for $210/SqFt and $226/SqFt. If we listed for $215/SqFt, we could list our house for over $700,000. Whoa! (I just did the math for the first time.) We’d make a great profit at $550,000. So, maybe we just need to pack everything up into storage, live in an Extended Stay, sell our house, and figure out where to go from there. While somewhat radical, at least it would be a step in an actual direction. And with cash in hand, the sky is the limit.

So Close

by ⋅ Leave a Comment

Mr. PFL and I apparently had the highest offer on the duplex, but the sellers went with a different offer due to financing. I spent almost the whole second quarter of Super Bowl 50 texting with the seller’s agent about becoming “pre-approved” in order for them to accept our offer. I did my best to explain that, due to our purchase through our LLC, we can’t be “pre-approved” like a traditional residential buyer. The big banks aren’t even interested in talking about a loan and our local bank treats this as a commercial transaction. The local bank wants a signed purchase contract and information about 2-3 years of profit/loss on the investment property before investigating loan terms. The seller’s agent did not even provide me with the current rent on the one unit that is occupied, so I am not surprised they went a different way.

Mr. PFL and I did see the vacant unit on Saturday afternoon. The location was perfect, but the unit needed some updating. It was small (probably 850 square feet). We could definitely envision ourselves at this property and realized just how much downsizing would be necessary.

Overall, this has been an interesting learning experience. It looks like cash will be king if we want to stay in the neighborhood. We’ll need to get creative to make that happen.

Sight Unseen

by ⋅ Leave a Comment

Either we are crazy, or we are very wise investors, because Mr. PFL and I made an offer on a duplex for $325,000 without going to see it. I did drive by after making our first full-priced offer of $300,000 on the day it was listed. The agent emailed that they already had multiple offers, so we upped it $25,000. They are supposed to make a decision by 5pm on Sunday.

This duplex checks off nearly every box on our list, the most important being location, off-street parking, basement storage, and some outdoor space. While it lacks a garage, there is potential room for one to be built. The pictures of the interior show some updating, but that part really isn’t that important to us; we can make most cosmetic changes ourselves anyway.

So, I guess we will see.

And speaking of sight unseen, I still haven’t gotten in to see BD’s sister buildings. I’ve still been texting with the owner, who is still trying to get his property management situation figured out. We are quickly approaching three months since I sent my letter.

Hoping for a Year of Travel and Change

by ⋅ Leave a Comment

While I had hoped and expected to be further along in the downsizing process by now, I am confident that it will happen this year. Mr. PFL’s work goal is to make it until the end of February and then retire; this deadline is rapidly approaching. It would be comforting to have a new place lined up before he is done with work. To that end, I do search for a place to live every single day. I also sent out a letter to another property owner of a duplex that we are interested in. The duplex is a block from where we live now and has been in the process of renovation (and thus vacant) for about four (4) years. I actually toured the property when it was first on the market about five (5) years ago, but at that time it was extremely overpriced and needed a complete renovation. It sold to the current investor for about 2/3 of the original asking price. Duplexes in our neighborhood (the few that have sold) are going for about $315,000 (just over $150,000/unit), so they would make money if we paid market rate. I hope to hear from him.

I’m still following up on BD’s sister buildings. It has been more than two months since I first contacted the owner. I’d give up, but I’m intrigued by the potential of adding another $50,000-$100,000 in gross rental income each year. The value of the land should continue to rise as well, which may open up some selling options in the semi-near future.

My number one goal this year is to travel more. We are off to a great start. Since Christmas, we have visited my aunt in Denver, skied in Utah, and are heading to the Florida Keys tomorrow. We have another family trip planned for Florida next month when we’ll be staying south of Tampa. We’ve talked about heading back to Hawaii (I’m hoping for a coffee farm starting in 2017) and we’ve seen some very inexpensive flights to Europe. We have also discussed a road trip through some new states on our way to hopefully watch Ohio State at Oklahoma. To help accomplish all of these dreams, I recently signed up for an IHG Rewards credit card. Intercontinental Hotels Group (IHG) is the parent company to Holiday Inn, Intercontinental, Crowne Plaza, and my personal favorite, Holiday Inn Express. With this rewards credit card, I earn one free night per year automatically, plus I get bonus points each time I use it when we stay. With the sign-up bonus, I already have enough points for at least 3 free hotel nights. I continue to use my Southwest Rapid Rewards credit card for every day purchases; I get multiple free flights every year. Mr. PFL and I also signed up for TSA Precheck after waiting in those lines at New Year’s. It was a very easy process and we were approved in about a week. We will be testing it out for the first time tomorrow.

Now if only we had won the Powerball…

Bureaucracy Strikes Again

by ⋅ Leave a Comment

Oh, dear City of mine, why are you so inefficient and arbitrary sometimes? Having fully recovered from the Dumpster-flipping incident, I’m currently on hold with the Department of Public Utilities in an attempt to keep the water on at the Duplex that we are selling on a land contract. At the time the land contract was signed, the Water was transferred over into one of the purchaser’s names. This was June 2014. Yesterday, I received a panicked call from the other purchaser telling me that the City was going to turn the water off unless I paid an $854 bill. Huh? Why? Granted, I had received a bill back in October to that effect, but I called the Department and told them that I wasn’t paying it as the land contract purchasers were responsible. I thought that was the end of the story.

Today’s representative did a little digging and his story is summarized as follows: The City audited their accounts and, since this building is a duplex without separated meters, the account must stay in the record owner’s name. This change happened in Summer 2015 (one year AFTER we transferred the bill over) without any notification to me except a copy of the “Final Bill” to the land contract purchaser, I guess. No letter. No explanation. I owe $854 right now or they will turn the water off. I asked to speak with a supervisor.

To her credit, the supervisor actually went back and listened to the recording from October. She confirmed that I wasn’t told that the bill had reverted to me. After expressing my frustration, she approved payment of half the amount due today to avoid the shut-off and the other half within 30 days. Done and done.

I’m closing on the vacant lot that is right next door to the Duplex on Monday. After the house was torn down, I was contacted by the City with an offer to buy the lot for $1,410 (or $705 with proof of spending $705 to improve/maintain it). I need to confirm that all loose ends from that are tied up and then I’ll be ready to transfer the Duplex to the land contract purchaser. I’m over it.

Happy Holidays!

by ⋅ Leave a Comment

Whew! What a month. And we are all packed up to go ski out west. I guess I can’t say that I never travel between Christmas and New Year’s anymore because this makes two years in a row.

We still have our house; we are still looking for our new place.

I’m still in contact with the owner of BD’s sister buildings, but haven’t seen inside yet. He claims that he’s going to get the contract to the property manager this week. I’m not holding my breath.

I’m just waiting on a delivery for a new dryer at the Condo and then we are officially on vacation.

Be safe and Happy New Year!

-Mrs. PFL

But, Asking Takes Energy

by ⋅ Leave a Comment

While I still believe that it doesn’t hurt to ask, I still haven’t really gotten any closer to a decision on BD’s sister buildings. I did end up talking to the local property manager (I had the wrong phone number initially), but he was still waiting on a signed contract and deposit from the owner. He expected it to come before Thanksgiving, but I still haven’t heard back from him. I’m planning to follow-up today. The abandoned nature of these buildings is starting to make a lot of sense…

Unfortunately for us, the other owner has or will receive notice of a zoning-change meeting. A developer is seeking some changes to start building a multi-use project of up to 95 rental units in the vacant lot directly across the street from our building. The vacant lot spans a full square block. Our building is in the background:

I hope the zoning is changed; this project would be a great investment and improvement to the area. I’m a little concerned about how parking will be affected, but we still have room on our lot for more cars. I doubt this will motivate the other owner to sell to us, though. He’d probably be wise to just wait for an offer from a developer at this point.

I’m also going to contact the owner of a duplex about a block from our current home. I had actually toured it with our real estate agent almost five years ago when it was first on the market. It was being sold as part of an estate. It was extremely overpriced and needed a full rehab. It was purchased at a discounted price almost four years ago and has been vacant ever since. There is sporadic work done, but nothing consistently. The location would be perfect, if we could get it.

It Doesn’t Hurt to Ask

by ⋅ Leave a Comment

Last Monday, I drafted and mailed a letter to the statutory agent of the LLC that owns the two sister-buildings to our 6-unit building, BD. Since we completed the exterior makeover, and we haven’t been able to close a deal on a new place to live, I decided to reach out to the owner to gauge any interest in selling. Mr. PFL has been asking about these other buildings since we closed on BD. I really didn’t expect a response (the owner’s probably been solicited from California investors already), but he called me on Monday evening. We didn’t talk numbers yet, but he indicated that he’d be willing to carry the mortgage and would only need 10% down. We agreed that I’d have the opportunity to view the interiors before moving forward. He said he’d contact his property manager to get it set up. I hadn’t heard from anyone, so I followed up with him today. The property manager called almost immediately and provided me with the cell phone number of the guy who could show it to me. I called the number, which went straight to voicemail, and left a message. I tried calling back a couple hours later, and again it went straight to voicemail, so I sent a text. If I don’t hear from him, I’ll try again tomorrow. Hopefully we can get in there this weekend and can decide whether or not to move forward.