Between two sellers, four attorneys, a real estate agent, and multiple offers, I had to revise our offer and resubmit it. Mr. PFL even came with to see the condo on Monday to help decide the maximum offer. To confirm: yes, I made an offer for $142,000 last week without Mr. PFL even seeing the place. If that isn’t a sign of trust, I don’t know what is.
All of the offers are open through tomorrow, October 1, at 2:00 p.m. I’ll let you know what happens.
At 3:11 p.m. today, I sent over my very first offer as a licensed real estate agent. A 2-bed, 1-bath condo, with basement, in a 3-unit building was listed earlier this week. It is a “distressed” property in that the two owners have a civil case pending, with lawyers involved, to try to get them both off the title and disburse the equity. The case has been pending since last year and the condo association is trying to foreclose, too, due to unpaid dues and assessments.
I saw the condo yesterday at lunchtime (I love being able to set showings up for myself, at my convenience!). The location is amazing and only about an eight minute walk from our house. There is off-street parking. But the kitchen is incredibly tiny and outdated. There are some holes in the walls. It was kind of cluttered. And I believe these are all of the things that will scare away most buyers.
So, I low-balled the offer, but otherwise made it very attractive. Cash. As-is (no need to worry about fixing anything), subject to inspection (if there is some sort of undisclosed structural issue, we’ll be able to back out), and confirmation that the condo association will approve the unit for use as a rental. The offer will need to be approved by both sellers and their attorneys, so we’ll just have to wait and see.
This could be “the one,” or at least the one for right now.
My primary job, working as a self-employed attorney, comes with a lot of freedom and flexibility. I know we would not be in the position we are if I worked a traditional 9-5. But, as a one-person law firm, I am responsible for everything. Including copying. And being prepared for trial. And returning emails and phone calls. And writing legal documents. And opening mail. And settling cases. Or going to trial if I can’t settle a case. Which is what happened this week. After spending about six hours at the courthouse on Monday trying to settle a divorce case (I didn’t get lunch until 3:30), no settlement was reached, so I spent Tuesday morning organizing, copying and preparing for the trial starting Tuesday afternoon. The trial finished Wednesday afternoon. Throughout the trial, it became obvious why settlement was impossible: we weren’t arguing about the same things. This was so bad that at one point I asked for a sidebar, which does look very much like what is portrayed on TV (unlike virtually everything else in most legal TV shows).
I’ve tried to stay on top of all of my other responsibilities these last few days, but I haven’t been that successful. I haven’t slept very well, either. I can’t wait to NOT do this anymore. I know that I’ll need to replace the intellectual stimulation I get from this work with something else in the future, but I hope I can do so in a much less stressful way.
The housing market in our area is on fire. Every house we’ve been interested in the past few weeks has gone into contract within about 48 hours. The “one that got away” actually went back onto the market, we went to see it (my very first showing), and then it was back in contract almost immediately. Most of the real estate agents will reach out when they get an offer to give us a chance to make one as well; having cash should give us an edge. I think. I hope.
I’ve finally jumped through all of the hoops needed to do real estate showings. I have my real estate license; I have MLS access; I have an account on the website to schedule showings; and I have the app on my phone that will open the lockboxes. Whew. I had set up three showings a few weeks back before I realized I needed an in-person appointment to get my phone app certified and installed. I finally set up my first real showing for Saturday morning after searching for places on Thursday and driving by it. Within hours, the duplex was in contract. It had only been on the market for three days.
Mr. PFL and I still aren’t exactly sure where to move or what kind of place to buy (mulit-family, single-family and condo are all on the table). We have some very general parameters, but I think it is going to be a “you know it when you see it” type of situation. We also have plenty of access to cash through our home equity lines, so that can give us leverage when we do make an offer.
The best part about this process, in my opinion, is that I’m not too concerned that we will make a bad mistake. I guess I don’t believe in a “forever” home anymore, if I even did in the first place. We will do our best to make a wise investment. Then, even if we don’t want to live there, we can sell or rent it out. This provides an amazing amount of freedom. We don’t need to settle, and we don’t need to stress about “the one that got away.”
If the price is right, everything’s for sale. This past winter, we received an offer for our house. While it was a good offer, it wasn’t enough for us to fast-forward into moving.
For the last several months, we’ve been receiving letters in the mail with offers to buy our rental properties. I’ve followed up on a few of the solicitations. The offer on the Condo was about $100,000 short of where we’d expect to sell; we’ll likely need to find an owner-occupant because the math just doesn’t work out as a rental at market price. It works for us because of the purchase price and the huge amount of debt Mr. PFL paid off while living there.
The Duplex that we’re selling on a land contract also received an offer. I talked to my purchaser about it, and she still wanted the property. I had my doubts about that deal working out once someone actually drove by the location. They were also requesting that it be move-in ready condition and I have no idea how much money that might take.
This week, I received a letter about BD, the 6-unit, from an investor in California. We talked on the phone for a bit and she asked me to send the last year’s expenses. Because I use Quicken Rental Property Manager personal financial management software, I was easily able to create a report. She had a couple of follow-up questions, and I told her about needing a new roof. She declined to make an official offer because the maximum she could spend would be $122,822 in order to have any cash-flow. Good thing we only paid $49,000! Plus the rehab costs, of course. We would still make a sizable profit for that price, and it is in line with our estimated value. We also had more vacancies/under-performing units than I would have liked, so our next year should show a better bottom line.
So, investors, I’ll keep looking for your letters. But, we aren’t “distressed,” so you aren’t likely to find fire-sale prices here.
The loan officer for the Condo HELOC called today. He was just as surprised as I was when he reviewed the Note and saw the payment terms. He admitted that he didn’t realize we weren’t signing an interest only loan and apologized. He then offered me a “solution.” Basically, he advised me to make the automatic minimum payment that the Bank requires, and then transfer back any excess payment from the HELOC to the checking account. So, let’s assume that the current minimum payment of $885 is $185 interest and $700 principal. When the payment is made, the outstanding loan balance will be reduced by $700. The day after the payment is made, I would transfer $700 back to the checking account, increasing the outstanding loan balance by $700 (which is the original amount), and thus actually making an “interest only” payment. While this is a clever solution, it isn’t what I thought we signed up for. Not to mention the minimum payments are going to require a substantial chunk of change to be available on a monthly basis. Grr. #FirstWorldProblems
I was aghast (that’s a real emotion, I think) when I opened the first statement from the new Condo HELOC to find the first minimum payment due to be $885.55. While the interest rate is amazing and the credit line has increased substantially, I was under the assumption that we had 10 years of interest-only payments, because, when I first emailed the loan officer about the terms, this is what I received: “The rate would be prime 3.25% interest only. 10 year commitment. This loan requires you to pay closing costs, which would be the appraisal, title search, filing fees around 600 dollars.”
It took over a month for the appraisal to come back. The loan officer had assured me that we could have a line up to 65% of the equity based on the appraisal. When we scheduled the first closing date, and I asked for the final terms, he emailed me the Credit Agreement and Terms form. I didn’t even make it past the first line, because the loan amount was $40,000 less than I was expecting. He also wrote that we “[h]ave the line set at $100,000 at prime 0%, great rate of 3.25%.” Does this mean NOT interest-only? When was he planning to tell me? When I figured it out after I received my first bill?
I will admit that the Credit Agreement and Terms form does seem to indicate that we are required to pay 1.5% of the loan balance, but it looks just like the other HELOC Credit Agreement and Terms form and I swear he confirmed at the closing that it was interest-only for 10 years. I never had any reason to assume otherwise. I know better, though.
While it isn’t our intention to carry debt, the flexibility that comes with paying less than $200/month for interest only as opposed to $885/month is substantial. It almost makes the increased credit line worthless.
I hope he will provide me with an explanation soon. And it better be a good one. I’ll make sure to read the fine print next time, too.
Just six weeks after her fall, Mr. PFL’s grandmother, Old Iron Hip, is returning home today. After her discharge from the in-patient part of the hospital, she spent about a week in the rehab unit in the hospital. Then, all of a sudden, they were ready to discharge her even though she could not really walk or use the bathroom on her own. Thankfully, another rehab facility was willing to take her and she has come a long way. At a home visit last Monday, she walked up and down the flight of 16 steps in her home.
There has been some family drama and controversy through this process, but returning home eventually boiled down to two factors: her mental state and money. It has been eye-opening to run the numbers on how much alternate forms of care can cost. It has also been amazing to see how stubborn an 89-year-old lady can be when she just wants to go home; she has repeatedly refused to use her call-button and also won’t even try to make any new friends.
I’m hopeful the transition home will be good for Old Iron Hip. She’ll have in-home care for a couple of hours in the morning and at night. She’s also going to have a hot lunch delivered on weekdays. If she ends up spending all of her savings, she should qualify for Medicaid and they have many services aimed at helping seniors age in place.
My grandfather passed away just about a year ago, at age 91. He lived at home the entire time. He, too, was stubborn and blatantly refused help from any outside caregivers. My mom and dad spent a lot of time taking care of him. I was lucky enough to see him the week before he passed and I’m grateful I was able to say good-bye. I feel confident that he was ready. I hope that Old Iron Hip is able to maintain some control over her situation and that she will be ready when her time comes.
I finally have MLS (multiple listing service) access thanks to passing my real estate license exam and paying membership dues with the local board of REALTORS®. Mr. PFL and I have been looking for a new place to live, and looking at comps for our current house, this weekend. The single-family housing market in our neighborhood is on fire. We should be able to list our house for at least $100,000 more than we bought it for in 2011 (which was $430,000), but could potentially list for $250,000 or more over our purchase price. On the other hand, we have been looking at condos with low monthly fees and a price-point that we could pay cash from our HELOCs (less than $175,000). The condo market seems to be fairly stagnant, at least at the lower end of the price spectrum. I still need to work on the logistics of how to set up showings, but I feel like we are finally making real progress toward the next chapter in our life.