We got our fifteenth house under contract yesterday…another bank-owned foreclosure…
This house is completely generic, and we couldn’t come up with a very descriptive name for it; but it’s practically next door to The Pine House, so we’re just going to call it The Neighbor House for the time being.
This was the second house in a row where the listing agent told us that there were multiple offers and asked us for our best offer. After putting in our best offer, the bank ignored the rest of the offers and only countered ours. Either there weren’t really any other offers, or the fact that we offered a large deposit, all-cash purchase, and a quick closing made our offer a lot more attractive than the others. That’s a good lesson for other investors out there…
The house is a 3 bedroom, 2 bath split level with a bonus room in the basement — not much different than our last few houses, including The DIY House, The Sunglasses House, The Poor House and The Pine House. It looks like we’re starting to find our niche…and it’s a good niche, as not only are we finding these types of properties to sell quickly in this area, but after selling a couple of them, we are generating our own comps for when we put the later ones on the market.
The house is in surprisingly good shape. It needs a new roof, interior and exterior paint, new flooring, new kitchen cabinets, a new back deck, and new lighting and plumbing fixtures. In total, we’ll probably spend about $20K on rehab, which for our rehabs isn’t too bad.
We’re picking this house up for $50K, and after the $20K in rehab costs and another $15K in commissions and fees, we’ll probably be all-in for about $85-90K. There aren’t a lot of comps in the area, but I’d be surprised if we can’t sell this one for between $100-120K without too much problem (famous last words?!?! :)).
I’ll post pictures and more details in a few days (I’m still out of town)…
Congrats. Keep on truckin.
You’re on fire! Figuratively speaking of course. Well, could also be literally, however unlikely.
Okay, let’s just say you’re hot! Not feverish of course. Hot as in you are on fire! Oh…
Congrats!
Ezra –
I just verified, and I am NOT on fire.
That said, I checked the mirror, and I certainly am hot. 🙂
Don’t forget, mirrors reverse reality. It seems you’ve racked up a few purchases all of the sudden. Did you change your strategy or something?
Another fine Job. Keep up the good work.
Oh, btw-I just paid 149.00 for the D and B number, so I can work on my business credit.
Chris –
Congrats! Did you read my article on building credit…just fyi that you didn’t need to actually purchase anything from D&B, though they do really try to upsell their services:
http://www.123flip.com/education/building-business-credit
It was your article that turned me on to them, thanks ! The guy at the other end of the line basically told me I had to pay for the number. I will read the emails he sent me(haven’t had the time yet) and may need to call him back for a refund. 🙂 I just finished Steve’s boot camp. Whew! Take care.
Wait a minute there partner! The Neighbor’s House? I am noticing a pattern here. hehe Happy Holidays!
Tom!!!
Holy Crap! I’ve been following your flip of The Neighbor House and it NEVER EVER occurred to me that I stole the name! I guess your work is always in my subconscious… 🙂
Sorry about that…I honestly didn’t even realize it. Anyway, it will give me an excuse to mention your blog again in a future post when I give you credit for the name… 😉
J,
When you say “all cash” offer do you actually mean all cash, as in, not using your rehab financing, or do they consider your small bank financing “cash”. Can you clarify that for me?
Mat –
When I say “all-cash” offer, I literally mean bringing cash (a cashier’s check) to the closing table without any financing.
That said, I will often submit cash offers and then arrange financing before the closing. When I do this, I ensure that my financing doesn’t affect my offer in any way (other than the switch from cash) and also ensure that my financing doesn’t hold up the scheduled closing. If for some reason I can’t manage to get my financing done in time (or if I choose not to finance), I’ll close with my own cash.
The key is that the seller is never at risk of me not buying the property or of me not being ready to close on-scheduled.
Hey J,
I know this was a long time ago but do you remember/still all cash deals this way? I was just wondering if you put something in the offer that says you will pay with cash but use financing if you can get it in time? Or do the banks just not care as long as they get their money when they’re supposed to? If you can’t remember don’t worry about it.
Thanks
Hey Corey –
I always include in the offer that I’ll pay cash, but have the right to switch to financing (without a contingency) if I choose. With bank REOs, there will sometimes be an addendum that essentially nullifies this clause, but I’ll still fight for it. Generally, the bank is okay with it, but I’ve had instances where they basically say, “If you offer cash, you must pay cash.”