This week in review – Week #81

This week has been quite trying. Lots of disappointment all around concerning the properties (And this will be one of the most pessimistic blog posts on here).

First in the week – The bank (The third bank now that I’ve approached for loans) turned us down on refinance of a few of the properties. The loan officer’s statement to me was that the board wasn’t a fan of the company having investors. I really can’t fathom the reasoning behind it, however their statement to me was that they ‘disliked an equity partner situation’. Even though I have controlling share and control of the company. Maybe there’s a secondary reason behind it but I’m unsure. Going forward I think I’m going to come up with a much more cohesive loan package to present to loan officers do I don’t spend as much time on it as I did this time around.

Second in the week, the property we’re working on (#12) was broken into, and about $1,500 in tools stolen. We really can’t claim it on insurance as the total recovery amount wouldn’t be enough to suffice on the potential premium increase. Right now we’re spending a little over $900 a month on insurance, and really don’t want to see it increase any more as we’d be paying the increase over too long of a time.

The bright news – The bank (The one we’re actively working with) called me Friday stating that we’d close on the refinance on Tuesday. This one will cash out another property to pay off our line of credit. This is good news as it’s taken a month to do unfortunately. The funds will go to pay down our active line of credit to <$25k. They would like to see us pay it off before we utilize the LOC further. They also want to see our tax return for 2014 so they can decide where to go. I hate the idea of having things up in the air so much that I can’t solidly say where the purchases will go.

This week in review – Week #80

This week in review – Week #80

This represents the 80th week that our company has been in operation.

Rehab #12 is finally wrapping up, we are now nearly 2 weeks over schedule. This is solely due to the fact that the electrical system was in significnatly worse shape than was originally estimated. We are not going to be SEVERELY over budget, but will be over budget none the less.

The thing to remember here is that with rentals even over budget, over time is still profitable. With flips some investors start to cut corners and end up with a potentially hazzardous property. That isn’t the case with us, we make sure it’s done RIGHT.

Property #5 is almost done, both sides are having the final work done to them (plumbing) and it’ll be ready to rent. Oddly enough a individual tracked our corporation down, showed up at my house and asked my wife if I would sell the property to him. I’m quite interested in doing that, so we’re meeting next week about it. It would be GREAT if we could sell this one and make a profit, however you never really know what might happen.

This week in review – Week #79

This week in review – Week #79

2015-01-09 09.59.46 (Medium)This ends the week of Jan 9th 2014.

Property #12 is almost done with rehab which is quite important as we’ve already secured a tenant for it.

Normally winter is an extremely hard time of year to find tenants but this one has gone pretty quick. This will put us to 13 of 17 units being occupied. Hopefully in the next week property #5 will have the water mains fixed and we’ll be able to tenant the property quickly. It will take us up to 15 of 17 units occupied, which means the banks SHOULD be happy with our performance :)

Our big struggle still is dealing with banks and finding one that will quickly refinance properties we have. 8 of 12 properties have no loans on them and are owned for cash. You’d think it’d be easy to find a bank that’d lend to a company in such a good cash position, but it’s kind of difficult. We did meet with a new bank this week who seemed quite positive on the situation.

A tiny little house (#12)

A tiny little house (#12)

DSC_0001 (Small)

Features

  • Single Family
  • ~900 Square feet
  • 2 bed 1 bath
  • MLS listed foreclosure

Financials

  • $12,750 purchase price
  • ~$10,000 rehab cost
  • $360 monthly NOI
  • 18.9% ROI
  • $40,000ARV ($17,250 in net equity after rehab)

Investment diary

This property is nearing the end of rehabilitation. This was the first property we’ve purchased that has had copper theft/plumbing theft while negotiating. THANKFULLY we had a pre-close property inspection which led us to discover that the plumbing and electrical service had been severely damaged from theft. We were able to negotiate a $2,750 reduction in list price to cover the damaged material.

The scope of work has greatly expanded from the original idea which was not to replace any wiring. Since the lines had been cut everything had to be traced back to the source and it was found the prior owner had used bare wiring to connect some lines together. Thankfully this was discovered and remedied, however makes one think about what could have happened over time had it of not been addressed.

Property photos (Pre-rehab)

Post rehab pre-clean 

 

Our biggest one yet (#11)

Our biggest one yet (#11)

2015-03-05 17.04.39

Features

Financials

  • $20,000 purchase price
  • <$20,000 rehab cost
  • $670 monthly NOI
  • 19.70% ROI
  • $65,000ARV ($25,000 in net equity after rehab)

Investment diary

This one was far more work than we had ever planned. It was slated for starting mid-Feburary with completion of early April as we secured a tenant before we even began rehab.

The two month rehab became a three and a half month rehab once we found out that there was a severe water leak in the roof that kept coming up foiling much of our work. The property also required significant re-wiring due to the dreaded knob-and-tube wiring found inside several rooms.

We went a bit over budget with it, however ended up with a absolutely fantastic home in the end that the renters LOVE.

One thing we did decide on doing with this home was removing the late 19th century oak mantles and replacing them with pine replacements. I hated removing original fixtures but due to the location and the fact it’s a rental we felt that it was most prudent. Had we of stripped out the oak fixtures inside completely (Baseboards, trim, mantles, banisters, ect) we likely could have recovered our entire purchase price on the house. However we opted not to, and just removed 3 of the 5 oak mantels. We expect to recover $3,000 by selling these. 

Property photos

 

2015-11-10 10.44.08 (Medium) 2015-11-10 10.44.20 (Medium) 2015-11-10 10.44.44 (Medium) 2015-11-10 10.45.09 (Medium) 2015-11-10 10.45.14 (Medium) 2015-11-10 10.46.47 (Medium)