Author Topic: My First Auction  (Read 8537 times)

bpleshek

  • 5 O'Clock Shadow
  • *
  • Posts: 80
My First Auction
« on: August 09, 2016, 01:00:13 PM »
I'm looking at an auction property(Xome bank owned foreclosure).  It has an occupant in it already.  The rules say I cannot go onto the property or talk to the person in the property as I would be trespassing.  From the outside(sidewalk), the roof looks better than most and the yard is quite well maintained.  I can't see the inside, but what am I looking at if I bid and ultimately win this property?  Is it good to try to get the current guy as a tenant(seems like that he's already been shown to be a bad risk)?  Do I have to file eviction notices? Does this guy have any silly rights that I should be aware of(like i can't evict on him cause of X)?  All my other rentals have been standard real estate sales so no issues there.  I have only ever had to evict one tenant and that was about 14 years ago.

Brian

Krolik

  • Stubble
  • **
  • Posts: 114
  • Age: 46
  • Location: S.Florida
Re: My First Auction
« Reply #1 on: August 09, 2016, 01:42:55 PM »
Don't want to discourage you but you may want to read this thread on BP. It was extreme case but happened to a very experienced investor.
https://www.biggerpockets.com/forums/67/topics/64944-the-occupants-from-hell-

Drifterrider

  • Handlebar Stache
  • *****
  • Posts: 1118
Re: My First Auction
« Reply #2 on: August 10, 2016, 05:20:10 AM »
  It has an occupant in it already.  The rules say I cannot go onto the property or talk to the person in the property as I would be trespassing. 

I believe I'd be breaking that rule.  I'd knock on the door and ask whomever was there if they were the owners or tenants (you never know).  If they are tenants I'd want to know if they wanted to stay, how much they were paying in rent, will they show me around, what was broken, etc.

In the past few years there has been more than one case where the tenant was paying rent but the owner wasn't paying the bank and lost the house.

My ideal rental would be to buy a house with a happy tenant already in place.

bpleshek

  • 5 O'Clock Shadow
  • *
  • Posts: 80
Re: My First Auction
« Reply #3 on: August 10, 2016, 07:52:59 AM »
It is my understanding(from the neighbor we talked to) that there was a divorce and she moved out(public records show assignment of her rights to him).  The guy in the house is the previous owner apparently.  Neighbor says he's "hiding" in his house, doesn't answer the door for anyone and doesn't leave the house as best as can be seen.  There is a notice on the door that says to be out Sept 15, but I don't know if the house changes ownership if that goes away.  Auction ends in a few hours and I'm excited but scared at the same time.  I read that story posted by Krolik and that is some really scary stuff.  I'm having my wife check now whether he's already filed for bankruptcy and divorce.  At least get those two out of the way if possible.  Still, since i'm paying cash for the house, i'm out opportunity cost, and won't be truly hurt financially, if it takes me 6 months to get him out(except court and legal fees) like I could be had I mortgaged it.

There was another weird thing on the auction that said, "Buyer may be subject to the United States Service Members Civil Relief Act, or other federal, state or local law, as applicable."  We're not in a military area, though there is an air force base about 60 minutes away.  I don't think you can be active military and not go in to work.  So I don't think this would apply.  It seems that that is listed on multiple auctions, so it's probably boiler plate.

KarefulKactus15

  • Handlebar Stache
  • *****
  • Posts: 1283
  • Location: Southeast
Re: My First Auction
« Reply #4 on: August 10, 2016, 09:01:34 AM »
I hope your auction price appropriately compensates you for the large risk you may take on.

bpleshek

  • 5 O'Clock Shadow
  • *
  • Posts: 80
Re: My First Auction
« Reply #5 on: August 10, 2016, 09:30:28 AM »
Although the reserve is not yet met(the last house I bid on and lost just 9 days ago did accept a less than reserve bid of $1500 above mine made at 1s left) I'm at about 60% of the market rate.  Unless getting the previous owner out is a pain, the house seems to be in fairly good shape.

I did some research and the guy had like 9 tax liens on it.  However, following the court trail at the county records office, after the Quit claim from the ex-, there was a Sheriff's deed which the documentation on the documents said would deliver a deed "free and clear" to the bank w/ a writ of possession.  After that the court release says that all of the following liens were released and gave a list of document numbers.  I crossed referenced the numbers and amounts and all the tax liens were released as well as the first and second mortgages.  From that standpoint I should be ok, I think.  Still going to buy title insurance.

Now I just have to worry about whether the guy gets out and how much damage he's going to do on the way out.  The idea from another post of offering some money for the keys and a timely exit might be the way to go.  Would you suggest first offering that up front or just waiting until after he doesn't leave voluntarily?

Brian

PS 90 minutes left on the auction.  Excited.

bpleshek

  • 5 O'Clock Shadow
  • *
  • Posts: 80
Re: My First Auction
« Reply #6 on: August 10, 2016, 12:56:00 PM »
Ok, I'm excited and scared.  I just won.  It said reserve not met, but it looks like they selling is going through with it.  In total I got the property for 65% of market value.  Now I have to take care of the paperwork within 24 hours and see where it goes from there.

QUESTION:  Should I use their title company?  Is there any reason not to?  The last title broker I used is out of business, so I don't really have one, though I did have one I called just for some quick info.  I don't really have a relationship with them.

Brian

gazzamatic

  • 5 O'Clock Shadow
  • *
  • Posts: 17
Re: My First Auction
« Reply #7 on: August 10, 2016, 02:52:14 PM »

I don't have an answer to your question, but I just wanted to say congrats on winning the auction! And keep us updated on how it goes, this is interesting :)

marty998

  • Walrus Stache
  • *******
  • Posts: 7372
  • Location: Sydney, Oz
Re: My First Auction
« Reply #8 on: August 10, 2016, 03:07:27 PM »
Ok, I'm excited and scared.  I just won.  It said reserve not met, but it looks like they selling is going through with it.  In total I got the property for 65% of market value.  Now I have to take care of the paperwork within 24 hours and see where it goes from there.

QUESTION:  Should I use their title company?  Is there any reason not to?  The last title broker I used is out of business, so I don't really have one, though I did have one I called just for some quick info.  I don't really have a relationship with them.

Brian

Haha the auctions I see are ones where properties go for 65% over market value :D Of course that becomes the new market value and all the neighbours start selling at that new price!

Good luck, seems like you snagged a good deal, I too would like to hear how this turns out.

bpleshek

  • 5 O'Clock Shadow
  • *
  • Posts: 80
Re: My First Auction
« Reply #9 on: August 10, 2016, 03:30:06 PM »
Marty,

I'm glad I don't have that market.  I'm just after income producers, not capital appreciation.  Though, if i lived in an area such as that(maybe San Francisco or other Cali location) I might have to change my philosophy. 

I spent a lot of time ridding myself of out of state rentals that had too high of mortgages for my liking.  I had $1.5M in property value and $1M in mortgages and then 2007 hit.  I barely got out without writing a check.  Used whatever and bought my house cash and kept the one local rental and started over. 

My risk aversion tells me that my first 3 rentals + my home are all 100% cash deals.  Rental #4 and #5 will be 50% leveraged and i'll see how that goes.  If all goes to plan, then i'll try to leverage 80-20 on #6 - #10. 

My wife and I have owned around 25 or so properties between us over the last 25 years before we met.  Now we're trying to do things more purposely with a better plan.  Still, good to pop my auction cherry.  Let's hope there isn't a lot of blood.  Scary after reading that 5 year horror story thread.  And I've only gotten through the first 10 pages.

Brian

bpleshek

  • 5 O'Clock Shadow
  • *
  • Posts: 80
Re: My First Auction
« Reply #10 on: August 10, 2016, 03:35:04 PM »
Gazzamatic,

Thanks.  They told me the process would be as such:

1. Fill out and return the "Checkout Form" within 24 hours.
2. There would be an initial Offer Contract.
3. Seller Approves/Signs.
4. Contract "Fully Executed" and sent to closing.
5. Sending of Earnest Money Deposit.
6. Send Proof of Funds.
7. Closing within 15 days(on average).

Then it's off to the court house to file my eviction notice.  Since the guy had about 8 tax liens on the property(which the court release filed says were released) for amounts of $181 up to $848 it seems like he's a real piece of work and not worth approaching for a lease.  After step 7, I might just stop by and see if he'll take $500 to move out and have it in good condition. 

@Everyone:

I wonder, after closing, do I have any rights to enter to look at the property to see how much damage there already is?

Brian

iris lily

  • Walrus Stache
  • *******
  • Posts: 5671
Re: My First Auction
« Reply #11 on: August 10, 2016, 03:59:57 PM »
Don't want to discourage you but you may want to read this thread on BP. It was extreme case but happened to a very experienced investor.
https://www.biggerpockets.com/forums/67/topics/64944-the-occupants-from-hell-
oMG. OMG.  5 years to get nonpaying tenants out. OMG. California.

I can barely form a coherent sentence after reading this.

Landlady

  • Stubble
  • **
  • Posts: 248
  • Location: WA
Re: My First Auction
« Reply #12 on: August 10, 2016, 04:03:25 PM »
As the owner of the property you have rights to enter the property occupied by a tenant if you give them 24 hours written notice before entering.
Be careful entering since you do not know what to expect. Safety first and congratulations!

I'll be curious to know your thoughts on Xome's process if you have time for a followup once you close.

KarefulKactus15

  • Handlebar Stache
  • *****
  • Posts: 1283
  • Location: Southeast
Re: My First Auction
« Reply #13 on: August 11, 2016, 03:40:46 AM »
You should be able to look at your states tenant landlord act for access information..

bpleshek

  • 5 O'Clock Shadow
  • *
  • Posts: 80
Re: My First Auction
« Reply #14 on: August 11, 2016, 06:46:05 AM »
@Landlady:

I'll post more as I get further into it.

@iris lily:

Yes it is really scary.  Makes me want to never consider investing in California.  Then again I can get 1/3 the rent at 1/5 the investment here probably.  I can get a 3/1 ranch with a finished basement for $90k-$130k here(market not auction) and I can rent it out for 1100-1400/month.  I'm not sure I would want to get a huge mortgage for $1M+ Just so I can get 3500/mo in rent.

@Kroaler:

I wonder if my state's tenant landlord laws would give me any access since this is the foreclosed owner who is in it and I don't have a lease with him.

Brian

bpleshek

  • 5 O'Clock Shadow
  • *
  • Posts: 80
Re: My First Auction
« Reply #15 on: August 11, 2016, 09:49:15 AM »
Step one complete.  Form was submitted.  It was basically an electronic offer letter.  It had price, how the deed should be titled, who the seller's agent is if any, a disclaimer, a permission for them to contact me via phone or text to transact business, and a Y/N on whether we had proof of funds.

Brian

Megma

  • Pencil Stache
  • ****
  • Posts: 744
Re: My First Auction
« Reply #16 on: August 12, 2016, 11:44:19 AM »
I'm super intrigued and look forward to more updates! Let us know what the inside of the house looks like and how/when you get the guy to move out! Good luck to you!

bpleshek

  • 5 O'Clock Shadow
  • *
  • Posts: 80
Re: My First Auction
« Reply #17 on: August 12, 2016, 02:16:24 PM »
@Megma,

Will do.  I might post pictures on zillow and drop a link in this thread if they allow that.  :)

@Everyone:

UPDATE:

Ok, yesterday had things going quickly.  We had our offer accepted at around 5pm when we completed the offer at around 10am.  We were sent the contract to sign first.  That's a little different than I was used to.  But anyway, I had an electronic copy of the contract in my "Inbox" waiting for me when I got home.  My wife as co-buyer was sent an email instead for her to sign and read.  We were told we had 24 hours to return the contract.  It was quite easy to fill out.  First I had to select the font of my electronic signature and initials.  Then click some disclosures and basic stuff for electronic signatures and we were off.  The contract was 88 pages.  To sign and/or initial all I had to do was click in a box and it filled in my electronic version of each.  There was a Next prompt next to it that allowed me to skip reading the contract and just sign the whole thing.  I read it though and clicked as I went.  When I got to the end and clicked submit, it said that I forgot to initial or sign something.  So I just hit the top of the form and clicked twice in the first signature box to bring up the NEXT button and just proceeded to NEXT through the entire thing until I found the ONE that I forgot to click.  Apparently I didn't see it.  As soon as it was clicked the form recognized that I was finished and prompted me to either select "I'm done" or "I'm still working on it" buttons.  Once I clicked "I'm done." it gave me a tracking number and some other stuff to print out if I wanted to and took me back to the auction site showing 1/2 signatures complete.  Next was my wife's turn.  Since she read it with me, she was able to click all the way through hers in about 3 minutes.  Once done, it said that it would be off to the seller to sign or reject.  Overall, it was a well made form/app and signing was made really easy(legal understanding aside).

By about 2pm today, the contract was executed and that's where it sits now.  I'm trying to reach the title company for details, but apparently the next step is sending the earnest money.  We have 2 business days to do that.

Closing is already set for 8/31.

Will update again once the next step is complete.  So far it's been a positive experience.

Brian

Enigma

  • Bristles
  • ***
  • Posts: 491
  • Age: 44
  • Location: Clarksville, TN
Re: My First Auction
« Reply #18 on: August 15, 2016, 01:03:45 PM »
Awesome!  I also bought a house at auction but luckily mine didn't come with a tenant to worry about.

My father purchased a $100k house for $60k from a distressed sale and went through the eviction process.  As long as you know your eviction process in your area and it isn't something ridiculous like CA I would say they tend to pan out.

Dicey

  • Senior Mustachian
  • ********
  • Posts: 22319
  • Age: 66
  • Location: NorCal
Re: My First Auction
« Reply #19 on: August 17, 2016, 10:09:47 AM »
Still, good to pop my auction cherry.  Let's hope there isn't a lot of blood. 
Dear Brian,
I'm hoping that all of this goes well for you.

However, the sentences quoted above literally turned my stomach. Please try to be a little more considerate in your audience when posting here. That reference is totally inappropriate.

bpleshek

  • 5 O'Clock Shadow
  • *
  • Posts: 80
Re: My First Auction
« Reply #20 on: August 18, 2016, 09:03:03 AM »
@Diane:  Sorry, that was not my intent.

@Everyone:

Monday(8/15/16) I went to the bank and got a proof of funds letter.  He didn't know how to write it.  I thought that it would have been a form letter.  Fortunately, Google knows everything.  As he was writing something ad-hoc I did a quick search and found one on the third image.  In case anyone needs something like that the wording that I liked was "I confirm that the available funds are free of any liens or debt and are clean, clear, and of non-criminal origin.  They are available for immediate transfer or use at the discretion of...."  Seemed like a good one to me so we went with that.  Also make sure it's on bank letterhead.

Tuesday(8/16/16) Received notice that the title/closing company had received the contract.  I used a wire transfer to send the earnest money deposit to them.  I also emailed a copy of the wire transfer receipt to both the auction company and the title/closing company just in case.

Now it's time to wait.

Brian

With This Herring

  • Handlebar Stache
  • *****
  • Posts: 1207
  • Location: New York STATE, not city
  • TANSTAAFL!
Re: My First Auction
« Reply #21 on: August 18, 2016, 09:56:08 AM »
Posting to follow.  I have no experience, but this is interesting!

Drakmon

  • Stubble
  • **
  • Posts: 116
  • Age: 43
  • Location: New York City
Re: My First Auction
« Reply #22 on: August 19, 2016, 08:58:42 AM »
Following as well, since my wife and I are looking at Auctions right now and have no experience with them...

Hope this all works out for you all!

giggles

  • Stubble
  • **
  • Posts: 145
    • Kiva - Change the world with a $25 loan
Re: My First Auction
« Reply #23 on: August 22, 2016, 09:44:24 AM »
Following!

bpleshek

  • 5 O'Clock Shadow
  • *
  • Posts: 80
Re: My First Auction
« Reply #24 on: August 23, 2016, 01:27:58 PM »
Ok, I just heard from them.  They want to know if I can close Thursday ahead of the 8/30 closing date.  I just got back with them about an hour ago and told them ok.  They're putting together the final numbers so I can get a wire ready.  I left work at 230 this afternoon to go to Bank A to withdraw a few thousand dollars to walk over to Bank B so there will hopefully be enough in the one account to wire the money on Thursday.  I had the purchase price in there, but I didn't have enough to cover the closing costs because I didn't know how much I'd need.  I didn't want to do a check or transfer as it might get subjected to some crazy holds.

I'll update again when I get more info.

ShoulderThingThatGoesUp

  • Magnum Stache
  • ******
  • Posts: 3053
  • Location: Emmaus, PA
Re: My First Auction
« Reply #25 on: August 24, 2016, 07:38:02 AM »
Why did they want to accelerate closing?

J_Stache

  • Stubble
  • **
  • Posts: 106
Re: My First Auction
« Reply #26 on: August 24, 2016, 08:12:21 AM »
Why did they want to accelerate closing?
Sounds like someone wanted to duck out from work early on Friday, so moved the closing to Thursday.

KMB

  • 5 O'Clock Shadow
  • *
  • Posts: 46
Re: My First Auction
« Reply #27 on: August 24, 2016, 08:21:28 AM »
Thanks for the play by play! Posting to follow...

With This Herring

  • Handlebar Stache
  • *****
  • Posts: 1207
  • Location: New York STATE, not city
  • TANSTAAFL!
Re: My First Auction
« Reply #28 on: August 24, 2016, 09:24:10 AM »
Why did they want to accelerate closing?

In closing, the property taxes are allocated between the old and new owners by days of ownership.  So, if the school taxes are $365 and cover September 1, 2015 to August 31, 2016, then the school taxes are $1/day.  The bank would get an extra $5 of school taxes back from the buyer for moving up the closing date by 5 days.  The bank gets to slightly reduce its other carrying costs, such as insurance and possibly utilities, by closing earlier.  This also makes the current resident someone else's problem that much sooner.

Since the closing is so close to the end of the month, the bank also may be trying to get this done a little earlier to be sure that all paperwork and money transfers are final by month-end to make their month-end books look better or meet some sort of quota or required ratio.

This is all an accountant's perspective.  Someone who does real estate investing or bank work may have a better answer.

I'm glad that everything seems to be working out, bpleshek!

Kouhri

  • 5 O'Clock Shadow
  • *
  • Posts: 53
  • Location: Auckland - New Zealand
Re: My First Auction
« Reply #29 on: August 24, 2016, 06:11:31 PM »
Posting to follow

bpleshek

  • 5 O'Clock Shadow
  • *
  • Posts: 80
Re: My First Auction
« Reply #30 on: August 26, 2016, 02:11:51 PM »
Ok, we closed last night.  I basically had to sign some documents with a notary present and then scan and email them back to the closing company.  Then I just had to wire the funds.  So as of about 4pm EST yesterday I own the house.  So they told me the next steps are as follows:

The fully executed document will be sent to me today.
They will send the deed to a local title company who will walk it in to the county recorder and file it.
They will send it back to the title company who will then mail it to me.(Not sure while the local guy can't just give it to me).
They keys are being mailed to me by the selling agent and should arrive next week.  I might call and see if I can just go pick them up.

My next steps are to see what to do about the existing deadbeat(eviction).  The neighbor seems to think the guy is moving based on activities going on.  But save that, I probably still need to file for possession because who knows when the previous guy is truly out.  It'll take a trip to the court house to figure out for sure.  If he has vacated, there may be a cheaper/quicker way to gain possession.

I'll keep updating as more things happen.

Brian

bpleshek

  • 5 O'Clock Shadow
  • *
  • Posts: 80
Re: My First Auction
« Reply #31 on: August 26, 2016, 02:19:19 PM »
Forgot to mention, I got my wife to go to our insurance agent and get a policy issued yesterday as well.  So we're covered there too.

Brian

bpleshek

  • 5 O'Clock Shadow
  • *
  • Posts: 80
Re: My First Auction
« Reply #32 on: September 02, 2016, 12:40:22 PM »
As of late in the day yesterday, the property was recorded into my name with the county.  So far so good.  That didn't take nearly as long as they said that it might.

Brian

Pooperman

  • Magnum Stache
  • ******
  • Posts: 2880
  • Age: 34
  • Location: North Carolina
Re: My First Auction
« Reply #33 on: September 04, 2016, 04:53:03 PM »
When we closed on our house a month ago, it was recorded within a day. Maybe the holiday weekend has something to do with it. Also, following

AlexK

  • Bristles
  • ***
  • Posts: 345
  • Age: 50
  • Location: Sparks, NV
Re: My First Auction
« Reply #34 on: September 04, 2016, 05:37:18 PM »
I bought the house I'm living in at a live auction and another investment house from auction.com. Auction.com isn't a real auction, it is just a way they fish for sales leads by pretending it's an auction site. I made an online bid and they called me immediately (even before the auction was over) to say my offer on the property was accepted. I am very happy with both purchases.

I expect your tenant won't be a problem. If he won't move just offer a "cash for keys" kind of thing.

bpleshek

  • 5 O'Clock Shadow
  • *
  • Posts: 80
Re: My First Auction
« Reply #35 on: September 27, 2016, 07:34:30 AM »
Update:

There was an eviction date with the sheriff set for Sept 9, 2016. We were considering a cash for keys but decided to wait for the 9th. On Sept 5 we posted a notice on the door for eviction just to cover our bases.  I later found out from my NEW lawyer, that while doing that was good, it wasn't necessary because in our state even though the bank cancelled the sheriff's trip to the property because they didn't own it any more, that the writ was still valid. They had to vacate and I wouldn't need to apply to the court for unlawful detainer again. Just schedule with the sheriff again if necessary. My wife found out from the neighbor a few days prior to the eviction date that the guy had been moving stuff out. On Sept 9, I arrived at the house and tried to drill the lock open(thanks YouTube). After breaking 2 drill bits I used 3 hits with a hammer on the door knob and I was inside(The deadbolts had been removed by previous owner for some reason. Thank you, no locksmith for me.

My first look at the property.

Well, the guy was a smoker. It was quite strong. But, the property looked in good shape. The range and refrigerator was left(surprising). It had an almost completely finished basement(it has a basement....cha ching). I didn't find anything in the property records that there even was a basement. In that neighborhood it is about 50-50 to have a basement and a finished one was a percentage of that. There was one wall that had a wood stove pipe hole in it through the concrete foundation and it was already stuffed with insulation. The rest of the 3/4 basement attached to that area was finished sans the floor. One quarter of that area of the basement had the walls finished but not the ceiling. Then there was a full bathroom in the basement, but what filth. The shower looked as if it was used by a road paver crew to clean their boots up. Then the laundry area was completely unfinished.

What we needed to fix.

In the basement finished area, there was a hole in the ceiling drywall(1'x1') where the previous owner installed a shutoff valve to the faucet outside. When I turned it on, it leaked like hell. A few turns on both nuts stopped the leak. To solve this issue permanently, the recommendation was to add a new shut off valve in the unfinished basement area by where the water meter is and then seal the ceiling up permanently. The hope is that if no one is messing with that valve, it won't leak in the future.

One of the windows had a broken fitting that kept it from sliding up and down properly. It would slam down if lifted.

There is no garbage disposal in the left side of the double sink in the kitchen. This drain is open, so something needs done there or it will get quite wet under there.

There is a double sink in the bathroom. The faucet on the left side doesn't work at all. Don't know yet what the issue is, but it's a supply side water issue and probably not too costly.

There was an above ground pool in the backyard. I consider this a liability that I don't want to mitigate, so I called around and got a quote for $500 to remove. They were also going to remove some trees in the backyard because there was some overgrowth and I just didn't like the look of it. Total backyard work estimate came to $1400. I told my contractor and he said he has a guy who works for him that usually does it for $200. The same guy said he'd pull down all the trees for an additional $200. The only difference would be that there would be no removal from property. For $1000, i'll get the city to bring out the free twice a year dumpster and i'll throw the pieces in there myself.

The entire upstairs had carpet, sans the bathroom and kitchen. I am replacing it with laminate flooring so I don't have to keep replacing carpets with each new tenant.

The gutter nails were coming out around the house due to the weight of the downspouts being clogged up. They were secured and cleaned. Also placed a gutter guard over them to keep them from being clogged again.

What we also fixed.

We decided to finish finishing off the basement. Rents in this particular area go for $1100-$1400 per month. With a fully finished basement, that gives a lot move living area and will in my opinion help me secure a rent toward the higher end of that range. In order to do that, I have to put down laminate flooring in the main basement area. Also had to finish off that one wall that had the stove pipe hole. Then had to finish the ceiling in a small portion of the finished area. Then install a door that closed off the bathroom and the unfinished laundry room. We also need to do something with the steps, possibly carpet them.

Other stuff

I purchased an ozone generator to mitigate the smoke smell and washed all the walls with TSP twice. Then painted with an oil based primer and then a latex paint.

I found my contractor by accident. I wasn't sure who I was going to use, but I needed to get a new lock for my door, so I was at Home Depot and trying to explain the metal doors I had to the employee and how I couldn't find a lock that would fit my door, this other guy walks up and takes over the conversation and saves me from the employee. I end up talking to him for an hour there at Home Depot and check out his reference and gave him a call. His estimate for all the work was $5100 + materials. No money up front, just that we'd go with him when we bought the materials and pay for them. That helped alleviate any, my contractor ran off with my deposit money issues, so a win there. I am planning on two more deals in the next 6-7 months and will use this guy again if everything goes all right. I also asked him about going with him to one of his other jobs, if he has some drywall and i'll provide some free labor in exchange for some OTJ training on the how-tos of drywall and later other things(Hey, I'm still small, so nothing wrong with learning).

The flooring material was about $3800 and I'm looking like I might be around my $10k mark after all including paint and some paid cleaning people. Maybe $11k. So assuming that my numbers are accurate, how did I do?

Summary

Purchase Cost: $79000.

Labor: $5200.

Materials: $4900.

Estimated Rent: $1400(or figure $1200 on low end).

Estimated Rent date: 11/1/16.

Estimated ARV: $130k(based on comps)

All cash deal, no financing.

That sums it up.  How did I do?

Brian

gazzamatic

  • 5 O'Clock Shadow
  • *
  • Posts: 17
Re: My First Auction
« Reply #36 on: September 27, 2016, 07:47:10 AM »

Looks like you did pretty well to me! :)

Thanks for the updates.

Pooperman

  • Magnum Stache
  • ******
  • Posts: 2880
  • Age: 34
  • Location: North Carolina
Re: My First Auction
« Reply #37 on: September 27, 2016, 08:05:15 AM »
~12% ROI isn't terrible :).

bpleshek

  • 5 O'Clock Shadow
  • *
  • Posts: 80
Re: My First Auction
« Reply #38 on: September 27, 2016, 08:43:29 AM »
I get 30% one time ROI before it's even rented based on the ARV.  And based on just the 50% rule, a 9.4% ROI.  (700*12/89000).

Brian

Pooperman

  • Magnum Stache
  • ******
  • Posts: 2880
  • Age: 34
  • Location: North Carolina
Re: My First Auction
« Reply #39 on: September 27, 2016, 09:03:10 AM »
I was estimating based on a spreadsheet i use for evaluating rentals. Obviously the increase in value by fixing it was awesome.

ShoulderThingThatGoesUp

  • Magnum Stache
  • ******
  • Posts: 3053
  • Location: Emmaus, PA
Re: My First Auction
« Reply #40 on: September 27, 2016, 12:26:11 PM »
Why not just sell it and make $30k after paying commission and transfer tax?

bpleshek

  • 5 O'Clock Shadow
  • *
  • Posts: 80
Re: My First Auction
« Reply #41 on: September 28, 2016, 01:20:33 PM »
I cash paid.  So therefore, i'll make $30k in 22 months and STILL own it.  Buy and hold seems a good idea to me here.  It's in a "good" area with high marks in the state for schools. 

Besides that, there are three more houses on the street for sale.  If I buy them all, I think I can put a hotel on them.  That's when I can really make money.

Brian

With This Herring

  • Handlebar Stache
  • *****
  • Posts: 1207
  • Location: New York STATE, not city
  • TANSTAAFL!
Re: My First Auction
« Reply #42 on: September 29, 2016, 02:11:27 PM »
*snip*

Besides that, there are three more houses on the street for sale.  If I buy them all, I think I can put a hotel on them.  That's when I can really make money.

Brian

What color is the street? Hahaha

 

Wow, a phone plan for fifteen bucks!