Well, it’s been another week already and this has been a tough one. My wife left for Las Vegas Friday night so it has just been my 18-month-old son Will, my dog Reggie, and me at home fending for ourselves. Just the boys! It’s a good thing I got a lot accomplished in the beginning of the week because Will is a full time job! I promise this post will be about real estate but I want to start with a little story about our first full day without Mom. If you just want real estate feel free to skip the next paragraph, it won’t hurt my feelings.
Yesterday I got Will up, got him dressed, took care of the dog, and figured we would go out for breakfast and drive by a few houses I was interested in around the airport (see, this has something to do with real estate). We ate breakfast at a small diner on Hwy 90 and everything was going great. My plan was to take Will to the Bounce House which is an indoor play area for kids where they can run around and go crazy. However, it was such a beautiful day outside (72 deg in January) that I figured we should try to find a park and play outside instead. I found a big park near some houses I wanted to see in Cordova Park. It was also right next to the airport and Will loves to see the airplanes take off and land, “airplane” was one of his first words. We played on the playground, walked all around the fence for the airport, played on another playground/slide by a baseball field, ran around the bases, and finally played on a soccer field where Will was chasing me around. We must have covered 2 miles over the course of an hour or so. When it was time to go I reached in my jacket pocket for the keys and they weren’t there. Uh oh! I spent the next hour and a half retracing my steps and there was no sign of the keys anywhere. It was time for Will’s nap and I was starting to freak out, it was time to figure out plan B. This is a long story already so I will just say that Plan B consisted of calling AAA, a friend who happened to be in New Orleans, Mom (bad move), and a friend who was very sick and in bed. Fortunately a nice woman was on the soccer field with her kids and found the keys with enough time to get Will home for a nap, only slightly late. Disaster averted and lesson learned, Dad’s are not responsible enough to watch children alone! I gave the woman my card and asked her to email me her mailing address, I would really like to send her a thank you. If you live in Pensacola and share this maybe she will read it…
Ok, back to real estate. This week was mostly administrative tasks and scheduling but we did get another renovation project under contract.
I stood up at my last real estate investor club and announced that I have IRA money that I would like to invest if any flippers are looking for funding. As you can imagine, there were a lot of people interested in speaking to me after the meeting. There are a few deals that I am vetting right now which have a lot of potential. I will also be starting to raise money for the renovation project I got under contract this week. Unfortunately I can’t use my own IRA on that project without paying taxes on the profits. I also wrote a blog post this week on Self Directed IRAs and 401Ks for those of you who are interested. If you haven’t seen it, be sure to check it out here.
Filled Pool House
We were supposed to close on this house last week but there was an IRS lien on it with a right of redemption period ending in mid February. Unfortunately, that means the closing got pushed back another month to ensure that the IRS wouldn’t come knocking on my door to take the house. I could have just gone ahead and closed on it but it was a risk I wasn’t willing to take.
We are hoping to get into the auction house on Tuesday morning. That will entail me breaking into a house that my JV partner already owns, and putting new locks on it. I will also have some photos taken and create the scope of work for this house. Typically I do all of that before the house is purchased, but Tuesday will be the first time I see the inside of it.
Cordova Park House
I am going to call this house the Maze House and you will see why when the photos are up. Last week I was running comps on a property someone sent me when I noticed a house listed on the MLS in a great area at a reasonable price. So, what else do you do when you see that? I put in an offer sight unseen at a price I was sure would make money regardless of how bad it was. I did see the photos on the MLS but you never really know for sure how much work is needed until you go there. A day later I got a counter that was $25k above my offer but $12k less than list price. So, last week I went to take a look at the house to see if the numbers would work at their counter price. They wouldn’t. I did however, find out how much they owed on the house which would help me in negotiations. After seeing the house, I told the agent that I’m sorry but I can’t meet the counter offer price and I am going to move on. She told me to just make a counter so I did at only $6k more than my original offer and after 3-4 days they accepted. There were some other terms that likely helped the sale but the sellers will still be coming out of pocket at closing. For those of you out there saying there are no deals on the MLS, I hope to prove you wrong here. This was not a short sale or a foreclosure; you never know what is going to happen if you don’t make the offer. I didn’t even realize it at the time but this house had only been on the market 2 days when I put in my first offer. Typically I only target MLS houses with long days on market or big price drops. I will be doing the inspections and writing my scope of work on this project in about 10 days so standby for that.
Lastly, my lead Manager Jamie will be starting her first full week this week. She has already been a great help to me and is very motivated and ready to kill it this year. I am excited to have her on the team and I look forward to having her write a post in the coming weeks once she has things figured out.
Next week I promise to have some photos of at least one project that’s coming up and hopefully two. Leave some feedback in the comments below and please share the article with anyone you think would enjoy it.