Atlanta REI

Friday, April 28, 2006

100% Occupied and Other Updates

Well today was move in day for our Duluth property and it went off without a hitch. I had previously signed the lease and collected the earnest money check from the new residents three weeks ago. All there was left to do today was to complete the move-in inspection.

Due to my business partner's busy schedule, there are four things left to do to the property that are outstanding; fix the ice maker, add a door sweep to the door leading to the garage, install the closet doors in one of the guest bedrooms, and per the resident's request, we are going to install a fence across the rear portion of the property (This was 50/50 for us when we were doing the rehab. We thought if someone requested it to be done, then we would go ahead and do it. Otherwise, we would just leave it.)

In other news, I met with my friend last weekend who wanted to sell his house "subject to". He is not quite motivated enough to sell his house that way just yet. As soon as they call him up (June/July) then he will be motivated. He lives in a huge master planned community, which is eight different communities in one, with a performing arts theatre, pools, tennis courts, etc. He has had his house listed with two different realtors for almost a year and can't figure out why his house has not sold.

So, we are sitting there discussing what a subject-to deal is and going through his closing paperwork and all of a sudden I hear (CHOOOO-CHOOOOOO) TRAIN???????
I said, "Uh, where in the hell did that train come from?" He shrugs it off and says, "Oh, I don't even hear it anymore." It really wasn't THAT loud, but a half hour later I hear it and I said, "There goes your train." Then, as we keep talking, a half hour later I hear it again and I said, "There it goes again." Hmmmmmmm, I wonder why this house has not sold. I asked him, "Do you know the schedule." Of coarse he didn't. You think it might be a good idea not to show the house when the train is going by? He lives on a "T" shaped street. His house is three houses down from the top of the "T" and the train runs behind the top of the "T" left to right, but you can't see it due to the houses and trees.

I really think it is just a Saturday afternoon train otherwise I'm sure people would not be living there. The problem is, "When do most people have time to shop for houses?" UHHHHHHH....SATURDAY and SUNDAY? So, I tell him that the train is his problem and unless he figures out the schedule and works around it, he will not sell his house for his asking price of $179k. I think he will get very motivated, very soon. Oh, and FIRE your agent!!

Wednesday, April 19, 2006

Recent Deals

I looked at the house south of town and after sleeping on it I decided to pass. The bank's price was a little too high for what it needed to really do it right. I never got out to see the subject to deal, but I have set up an appointment to see it on Saturday.

At the last GAREIA meeting I met a mortgage broker that said he gets deals every day that are 60-65% LTV, so I asked him to send me a few, so I could take a look. Over the weekend I went out and looked at a few. I only liked one. The problem was that the wholeseller had not closed on the deal yet, so I could not see inside because he asked that I not disturb the homeowner. It is in a hot area of town and houses are selling for $300k -$500k all day long there. These homes are arts and crafts homes built in the early 1900's. After driving buy I contacted one of the many agents I work with to get my arms around the comps. He is an expert in this neighborhood since he and his wife used to live there. On Monday I had my numbers and called to make the offer only to discover it was already under contract. Oh well, you snooze you loose.

I recently found another house in the neighborhood next to the one I live in. I periodically drive through neighborhoods around mine looking for obvious don't wanters. I ran across a house that was completely overgrown. Upon a closer look someone had put a phone number on the mailbox. I called the number and it was an agent who is listing (if that is what you want to call it) the house for the seller. However, this house is not on any of the multiple listing services. He asked who I was and I explained that I was an investor. He said that the seller was a "greedy old man" and other investors had offered $80k, but the old man wanted $120k. He said the house had been rented for the last 10 years and the old man was in poor health now and just wanted to get rid of it. He also said the old man owns the house free and clear of any debt, was willing to hold paper, and was willing to give good terms. I said I would like to look at it and he said he would need to get the key.

I will be glad to give him his price if the terms are good. No money down, 5% interest amortized over thirty years, balloon in 10. I could fix it up for about 10k, and I would have a $500 mortgage payment to make. I could easily rent the house out for $995 ALL DAY LONG! That's $445 positive cashflow. If he wants money down or a higher interest rate, then my price drops. That will work to because I would just refi the house in the next thirty days and pay him off, unless he is smart enough to try to negotiate a prepay penalty, then I would have to think about that.

All that said, the house would be worth $160,000 fixed up. You can't find a house in good condition in my neighborhood for less than that.

Friday, April 07, 2006

100% Leased

After showing the house to several would be residents I have finally rented the house. Everyone, wanted to break their lease to move in to the house. However, I couldn't bear to tell them how much it was going to cost for them to break the lease. Being that I work in the apartment industry I know the penalties all to well. So, they soon called back and said it was too much to break their current lease, but the good thing is I have some great contacts for people who might be interested on the next house.

I am meeting a couple today to sign the lease for a move in at the end of the month. It would have been nice to have someone who was ready to move now since my first payment is not due until May, but I am not complaining.

I also have a lead on the next 2 houses. The first house is another short sale south of town. Its a 5b/3b on a basement listed for $119,900. The lady purchased the house two years ago for $146,000. I plan to go check it out this weekend. The second house is a guy that I know who used to be a courtesy officer on one of my properties that I used to manage (Apartments/Day Job). He owes $167,000 and has the house on the market for $179,900. He has just been accepted to be a Federal Air Marshall and is being transferred to D.C. This would be a subject to deal. The house was built in '96 and is in good condition. I plan to check it out this weekend too.