House #8: Closing Scheduled

We finally have the closing scheduled for The 16-Bid House!

After literally 6 months (185 days) of having this house under contract, the bank finally has clear title, the closing attorney finally has all the paperwork, and the closing is scheduled for Thursday afternoon. Of course, I’ll believe it when I actually get to the closing table, but at least there appears to be some hope that we’ll own this property pretty soon.

I mentioned in a previous post that the property had been broken into recently — most likely by some teenage kids — and that we had asked the seller for some compensation for the damage. They agreed to give us $2K off the purchase price (exactly what we asked for), and they gave us permission to put one of our portable alarm systems into the house to notify us if there were any more break-ins. Between the alarm system and the warning signs we posted around the exterior of the house, we’re not expecting any further problems or damage.

Also, while we didn’t ask the seller for permission to do it, we had our window contractors come in and replace the broken window in the living room, where the kids (and the rain) were likely entering the property. It cost us $215 that we’ll lose if we don’t end up closing on the purchase of the property, but it’s a chance we’re willing to take.

Our painters must be feeling generous, as they have agreed to repair all the interior drywall damage (A LOT!) and all the exterior siding and wood damage and then paint the interior and exterior, all for about $3700. Along with replacing that living room window (already complete) and replacing the hideous front door, our total rehab costs on this property should be around $4100, and should only take about two days.

Once that work is completed, we’ll most likely turn around and quickly resell it to another investor. Even with just this small amount of work, the house will be about 50% rehabbed (it’s a pretty small project overall), and will only need new carpet, lighting fixtures, plumbing fixtures and some other minor renovations to make it a great rental or flip for whoever buys it from us.

While we could likely make $20-30K finishing the renovations and flipping the house ourselves, it would most likely take us at least 90 days (most buyers in this price range are FHA), and we don’t want to hold the property for that long. Instead, we’re happy to make $5-10K quickly, and just be done with this house once and for all.

I’ll post some pictures later this week or early next week after our renovations are complete…