It’s been a long time since we’ve purchased a new house, but not for lack of trying. We’ve put in probably 25 offers over the past three to four weeks, and each was either rejected, countered too high, or outbid by another buyer. That said, over the past week or so, things have been softening up again, and our offers are starting to get more seriously considered.
Today, we put our fourteenth house under contract…
It’s very similar to The Poor House in term of neighborhood, construction, style, age, layout, and rehab requirements. It was built in the early 80’s, is a split-level contemporary style with 3 bedrooms and 3 bathrooms (one of which is in the finished basement), and needs a lot of work to get it back into resale shape.
Just like The Poor House, we’ll be doing a full exterior renovation, including new roof, new siding, new trim, new gutters, new rear deck, and a good bit of landscaping. The lot is a decent size, with good curb appeal (at least when it’s rehabbed), and a good sized level backyard. There are about two dozen pine trees surrounding the house (hence it’s name), which gives it a woodsy feel…I’m not a big fan of that, but buyers tend to be.
The interior previously had a mold problem that was likely remediated very poorly (more about that in another post); there are currently no signs of mold, but we have a feeling that once we look behind some walls, we’ll find evidence. In addition, the interior needs a full cosmetic rehab, including a new kitchen, new bathrooms, all new doors, all new windows, and all new flooring. We haven’t turned on the utilities, but I have a feeling we’ll need to do some electrical, plumbing and HVAC work as well.
Hopefully I’ll get some pictures taken this weekend, and will post them early next week. We have a quick closing on this one (next Friday), so we plan to get this one going by next weekend…
I know I have mentioned it before, but a little capitalism goes a long way. Just look at what your doing for the neighborhoods as you remodel. Congrats on obtaining #14.
Finally 🙂
I took a look at your last project and as usual you guys did a great job.
I am glad to see that there are still deals to be had out there. I was hoping the winter months would bring back more deals and less buyers.
Is this new purchase in the same subdivision by any chance?
Like Bilge said I find it that neighbors become very happy when you renovate a property that used to be an eyesore. I had many neighbors stop by to tell me so, specially when the previous occupants were an eyesore themselves!
Merry Christmas J,
Glad to see you keeping busy. I love your website. No “guru” stuff here.
Lots of questions….
Was this off the MLS? If so, what % of MLS do you aim for? Can you touch on financing? Cash, bank financed, private money lender or did you get the owner to do a deal with you on that part too? Take care bro!
Hey Chris –
Yes, this was off the MLS. All of our deals so far have been REO properties (bank owned foreclosures), which are always listed on the MLS.
In general, our offer has nothing to do with the list price on the MLS…we’ll evaluate the deal and make an offer based on that. Sometimes it’s at 50% of the list price and sometimes it’s 10% over list price (if there is competition and it’s a great deal). If it’s a new listing, I generally won’t offer more than 10-20% less than list price, as banks aren’t very willing to negotiate until a property has sat for a couple months…so if I can afford to buy it near the list price, I’ll just wait and hope for a price drop before someone else buys it. It’s a numbers game…
Most of our deals are financed through a local bank that does “rehab loans,” specifically for people who flip houses. They will finance up to 80% of the price plus rehab costs for one year, with interest-only payments at about 6.75%. It’s a great deal, and let’s us do many more deals simultaneously than we would otherwise consider doing.
Since we only buy bank-owned properties, we’ve never actually done seller financing…
Have a great holiday, and don’t hesitate to shoot me an email if you have more specific questions…