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 But the kitchen is incredibly tiny and outdated.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.
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.”
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.
After spending most of the day Friday studying, and barely passing all of my practice tests, I took the real estate salesperson license test today and absolutely crushed it! My license should be activated by the end of the week. I can’t wait to dig into the MLS to find us a new place to live. I’ll also be able to formulate a much better idea of what our current house might sell for based on some more recent comps. I’m so glad I passed!
Last Thursday, I picked up the trash surrounding the new dumpster: maggots. I cleaned up human feces this Wednesday: better than maggots. We heard the Rolling Stones live in concert on Saturday night from outside the venue: frugal. I met with my new “boss,” the mortgage broker I’ll be working with, and finished my last real estate class: forward-progress. The appraisal finally came back on the Condo so we can swap-out the current HELOC for a larger credit line and lower interest rate: $350,000 (that’s $12,000 more than estimated in our Net Worth).
For the record: I still haven’t received a letter from the City regarding the dumpster.
I graduated from law school ten years ago this month. Taking these real estate license classes are like a refresher course. I’m starting to understand why people fail the real estate license test; we’ve basically gone over three or four semester-long law school classes in three days (including Contracts, Property and Business Associations). I imagine these terms and concepts would be really difficult if I hadn’t learned them before. There are very few brand new ideas for me (surveying, for one), so I struggle to pay attention, but I know the best way to pass the test is to pay attention in class. I’ve almost always done well on tests when I pay attention; they usually tell you what’s on the test in class. Three classes down and only five more to go. I hope the financing and appraisal classes are more interesting for me.
Before I left class, I also talked to the instructor who provided the contact person who hires the teachers. My instructor had offered to get this information for anyone that was interested in teaching. I taught sociology part-time at our local community college for about three years when I was finishing up law school and starting my law practice. The hardest part, for me, about teaching higher education is navigating the underlying politics of the academic world. That is also a major reason I went to law school after earning my Master’s degree in Sociology instead of moving forward with PhD coursework and a lifetime of academia. This is also the reason I confirmed a contact person for hiring; I’ve sent in plenty of online applications to the local colleges and never heard back.
Being goal-oriented is a double-edged sword. When I set a goal, I generally reach it. Without a goal, nothing happens. Thus, I have heretofore provided myself a 13-week challenge. The challenge rules are simple:
Today is Week 1, Day 1. I came home from my first real estate license class and completed Jillian Michael’s 30-Day Shred, Level 1.
A semi-annoying ad followed me through Facebook for the last week or two. It had a picture of Christina from Flip or Flop on HGTV. After signing up for my real estate license classes earlier this week, I signed up to attend a free seminar. I knew that there would be a “catch” or that they would try to sell me something, but I thought I might learn something about flipping houses. So I went. And they did try to get me to sign up for their 3-day class for close to $2,000. They have a company called Success Path. The main benefits, in my opinion, for paying to do the 3-day class were 1) gaining knowledge about a wide range of real estate opportunities and 2) having access to their “preferred lenders” that allegedly will give you up to $500,000 per flip without a credit check.
As I continue to pay for my law degree (a.k.a my student loans), I see the value in spending a few bucks, instead of tens of thousands, on education in a new field. The travel agent class was super cheap; I got my TEFL certification with a Groupon; and I should be able to get my real estate license for less than $1,000. All of these are a minuscule investment compared to a total of eight years of college. And, I’m in the position that, even if I don’t ever make any money from these endeavors, the investment hasn’t hurt our bottom line.
There were quite a few people that signed up for the 3-day class (due to the deep-discount to sign up that day, as opposed to waiting), but there were also a lot of people that didn’t. I do feel that it was worth my time, even though it was basically an extended sales pitch, in that I learned some new things, including that: 1) REO’s (bank-owned properties) are generally great for flips; 2) they believe Central Ohio is in position for a big run-up in real estate prices in the next 3-5 years; 3) adding a rehab-estimate clause as a contingency in an offer is essential for a flip, and; 4) their system teaches never to flip a house unless you’ll clear at least 20% or $20,000, whichever is greater.
One of the factors they stressed, that I firmly believe in, is having Multiple Streams of Income (MSI’s). Part of the 3-day class is to teach basic principles of investing in rental properties. One of the disappointing parts of the seminar for me is that they never once mentioned taxes. While giving examples of the profit on flips, they never cautioned us about how much of it won’t actually make it into our pockets. I know I overly obsess about the issue of taxes, but it is a reality, and it can have a significant impact on the bottom line.
Can I claim that this was a life-altering experience? Absolutely not. But, maybe it was for someone else that attended the seminar. Maybe they are starting their own journey to financial independence.