Tuesday, December 29, 2009

Motivated seller - EXTREMELY motivated

I hope everyone's holiday is going well! Mom is really enjoying her visit, despite the noise and chaos that is part of my daily life. LOL

I'll be resuming my probate marketing on Jan 5th, when the kids are back in school, but it seems as if Potential Seller #2 is EXTREMELY motivated. I had not gotten back in touch with him, due to getting wrapped up with my Mom's visit, but he called yesterday and left a message, and called TODAY but didn't leave a message. Oy.

I will try and call him tonight after dinner. I really can't make an offer because I'm just not able to come up with a value, because of lack of sales in the area. The ultimate would be for someone who had a lot of $$ and wanted to rebuild this area of the city to go in and do a mass negotiation with all the owners of the condemned properties, buy them all up, rehab them, and rent them out....but unfortunately, I'm not that person at the moment.

Anyway, if I don't update beforehand, have a Happy New Year!

Thursday, December 24, 2009

Saturday, December 19, 2009

Pics and recap of Meeting #2

I uploaded the pics to photobucket albums - click HERE for pics of the Mill House and click HERE for pics of the brother's house.

The meeting with my second probate lead went as well as could be expected. The man was very nice, but I don't think there is much I can do to help them. The house has a roof leak in two places in the house, and at the one leak in the kitchen there seem to be evidence of mold. The sub-flooring is very wavy and bumpy, and the bathroom needs to be redone. The neighborhood has gone down the tubes. House after house has been condemned by the city in this mill house section known as Spartan Mill Village. To be honest, I was afraid of making an offer, because I don't want to be stuck with trying to find a buyer for this area. He did say that they were looking to let it go for $10k, but I'm not even sure that would even be possible. I left it with him that I would call him back when I was able to come up with some numbers on repairs. He thanked me for coming out to meet him - apparently another potential investor never showed up to the last two appointments he made, so he was appreciative that I came like I said I would. This made me feel pretty good. :)

I think what I will do is to call him back and ask him what their rock bottom number is that they would take for the property, and explain that I could not make an offer at this point because the repair figure would be too large for me to work with, but that I would keep in touch with them and also keep an eye out on the buying activity in the area to see if there might be other potential buyers that might be interested.

I still need to call a couple of contractors to come out to give me estimates for the estate house, and I hope to do that Monday. I've been gearing up for my Mom's visit over Christmas, so that has gotten me sidetracked a bit. Plus, I'm going to see about calling some of the landlords in the area to see if there is any interest in the Mill House and what they would be looking to pay for homes in these areas...if it works out, this could be a good wholesale flip.

I got my local newspapers today, and was pleasantly surprised to find that I can pick up the Spartan Weekly for free in front of the Dollar General in town. I thought it was a fluke, because they had them out last week, but they had them out this week as well. So that will save me the $20 per year for a subscription. I'm going to sit down and get the research done this week, but won't mail out the letters until after Christmas.

I also need to update that I read Steph's Ebook and it is definitely a must read! Get it, get it, GET IT! You will not regret it! (Hey that rhymes! LOL)

If I don't update beforehand, have a Merry Christmas!!!

Thursday, December 17, 2009

Results of my first seller meeting

Well, I am finally able to update! The kids have been using the computer most of the afternoon so I had to wait until they were in bed so I could type up a detailed post.

I met the seller in town and we drove over to the house. He had some guys working there, clearing out the place, and doing some work on the inside. My first thought was "Hmm...ok, he's doing some work on the property, maybe he's not so motivated after all." Turns out he's doing the work because he just didn't like the condition the house was in, and just wanted to do something. He's very much a do-er, but yet he has no interest in holding onto the property. He basically said he could get rid of it tomorrow.

The house is solid, but needs updating. The carpets need to be ripped out, and there is great hardwood flooring underneath that could be refinished. The kitchen needs new cabinetry, appliances and flooring. The same goes for the bathrooms (it's actually a 1 1/2 bath, not a 1 bath). There is a deck out back that would need to be rebuilt.The windows are original to the house, and are the ones with storm windows and wood framing. I'm not sure if they would need to be replaced. The lot is a nice size, with a creek running out way in the back of the property.

My very rough guesstimate for rehab is $20k, but I wanted to get a couple of contractors out to the house to give me a more accurate estimate.

Figuring the ARV is giving me problems. The last homes in the subdivision that sold were back in March for an average square foot of $59 1/2. If I take that price an multiply it by the SQ FT on this house (1,414) it gives me an ARV $84,133. If I go out of the subdivision but stay in the general area (same house style, built around the same time) I get $56 sq ft., or $79,184. It seems low to me, but the problem is that the square footage is so much smaller than the other homes in the area, so I guess maybe it really isn't that low. The seller said he had ordered an appraisal, but hadn't gotten it back yet, so it will be interesting to see what the appraisal comes in at.

Next, we went to the other property that the seller owned himself. I was rather perplexed, as the seller indicated that he would not rent to anyone, as he didn't want to put up with the hassle, so I was curious to find out why he had rental property. Turns out this was the house where he was born and grew up in! It had apparently stayed in the family, and his sister had been living there until she had to go into a nursing home a couple of years ago. I guess when she passed, he inherited it. He had completely redone the inside and outside, and just held onto the house. He told me that he figured he'd use it if he wanted to stay in town and was too tired to drive back to his house (he lives about 45 min away).

This house is a small 2/1. It's called a "mill house" because it was built during the 1920's when the textile industry was in it's prime, and the mills would build homes nearby for their employees. Many of these neighborhoods deteriorated once the mills began closing down and are considered the poorer sections of town now. Most of these homes don't retail for more than $30-45k, and as such, are nearly impossible to finance as rental property through conventional financing.

He told me he would let it go for $35k tomorrow. I thought that was fair, but I know he was basing this on the homes in the mill area being marketed for $60k. When I took a look at comps, the one house that sold on the same street as a contract for deed for $45k. Again, like his brother's home, it would be interesting to see what the appraisal comes out to be.

So, where do I go from here? Well, I am going to call a couple of local contractors to see if they will come out to the brother's house and give me a couple of estimates. From there, I'll call the seller to see if he got the appraisal back yet. Once I determine the ARV and the contractor's estimate, I'll prepare an offer and meet with the seller again. As for the mill house, I'll see if I can come up with more comps and get a better handle on an ARV. I'll have to see if there are any cash buyers for this area that I could wholesale to. I'm also going to email the woman at the property management company that I spoke to back in September, to see if she can give me an idea for how much both of these properties could rent for. If anyone has any ideas of how else I should proceed, please let me know - I want to make sure I'm on the right track!

I will have to post pics tomorrow, as my camera is dead and I don't have any batteries at the moment.

All in all, I was very happy with my meeting. The seller was very nice to talk with - he reminded me a lot of my dad and my grandfather. He might be a good candidate, too, to approach for being a private lender, as he does have money, and would probably find the idea of lending it out at a decent rate very interesting.

I almost forgot - I received call number 2 today, just after I got in the door from my meeting. I'm going to meet them tomorrow. I'm not sure what to make of this one - it's also a mill house, in Spartanburg in a school district that the property manager said to stay away from because she has a hard time finding good tenants for that area. But I did see that there was selling activity in that area recently, so I think it's still worth checking out.

And I had to laugh, because just after I got the call, I logged onto Scott's blog, Struggling to Get Started, and he, too, just got his second phone call from his mailings. This probate lead marketing really works!

Until tomorrow!

Wednesday, December 16, 2009

Holey crow, I got a call!

I just got in the house and had to update - I got a call from one of my probate letters!

I literally just got the letters in the mail yesterday - this was my second batch. Whoo hoo!

The gentleman was very nice. We are meeting tomorrow at 11am and he'll show me the house. There are no other heirs - it's just him - he is the brother. He also said that he himself had some rental property in town and he could show me that as well, if I was interested. Sure thing!

I'm going do a quick search on Zillow to get comps, and also I'm going to head over to Patrick Riddle's blog at Must Know Investing to learn some tips and tricks for negotiating and talking with sellers. Right now, though, I have to head back out to pick up the kids from school.

Wish me luck!

Friday, December 11, 2009

Misc. Updates

Just a quick update before I head out to do some shopping....

First, I don't have to go to the courthouse anymore. Yipee! I figured out that if I get the weekly local paper, and the Spartan Weekly, I will have all of my Notice to Creditors all in one place...and since the Assessor's information is online, I can just do my research at home. I've already picked up the local paper in town, and since I have to go into Spartanburg to do some shopping, I'll pick up the Spartan Weekly there, and will get some letters out tomorrow....

Today I picked up an early Christmas present for myself. I bought Steph's Ebook. I had wanted to buy it when she first put it out, but couldn't fit it in the budget until now. Don't get me wrong, it's a great price, but we are on a really, REALLY tight budget....so we had some rare extra funds this payday, so I treated myself. :) I can't wait to read it - in fact, I'm going to print out the first few pages to have in the van with me so I can read it while I have lunch on the road today.

Still working on the 2010 goals and will post them when I am finished.

And toy season was not as great as I hoped it would be. But I'm not going to dwell on it....just going to really focus on REI for 2010 so I can kick it in high gear and hit some homers out of the park!

Well, that's it for now! Have a great weekend!

Friday, December 4, 2009

Letters: DONE!

My first batch of probate marketing letters are going out in the mail tomorrow! I had planned on mailing them earlier this week, but Ron Mead suggests using good quality paper, which I didn't have. So today I went and bought some, along with some coordinating envelopes. They really do make a difference, so I'm glad I waited to mail the letters.

I've got a lot of other things going on with my goal setting for 2010, and I'll be sure to share that as soon as I have things down on paper.

Other than that, not much else going on. Toy season has not turned out as planned, but I'm not deterred. I have bigger fish to fry! :)

Before I forget, Steve Cook at Flipping Homes has given us an early Christmas present! He has put links to his Flipping Homes Profit Machine Bootcamp videos at his Lifeonaire site. Check it out HERE. Lots of great content - I'm going to be watching and taking notes!

Have a great weekend!

Wednesday, December 2, 2009

Courthouse, part 2

Before I talk about REI stuff, I just wanted to update a bit. My Mom got out of the hospital on Sunday and is feeling great! She's definitely taking things at a slower pace, to make sure she doesn't over do it. The Dr. said she could still make the visit up here for Christmas, so for that we are very thankful!

I went to the courthouse again yesterday, after taking a break for the week of Thanksgiving. This time I only picked up three leads. I skipped over the ones that had the spouse listed as the PR, as Ron suggests in his book. I also skipped the ones where the spouse was listed as an heir, but not the PR. The rest of the probate files that I looked at had no assets to probate.

When I got home, I looked at the assessors website and also the Register of Deeds records online. One of the leads was a dead end, as although there was real estate as part of the estate, it was transferred to one of the heirs outright after the will was probated. My guess is that this particular heir was the caregiver to the deceased and as such the deceased bequeathed the house to the heir in the will, and that they will now use it as their primary residence.

Based on the number of viable leads that I'm coming up with, I'm going to go to the courthouse less frequently, probably about once every other week. I'm also going to have to branch out a bit, and consider mailing to pre-foreclosures in order to increase my marketing efforts. The lis pendens for the pre-foreclosures are posted online, so I don't have to drive to the courthouse to get them. I would just need to get a marketing plan set up.

So anyway, that's it for now. I'm going to get my probate letters in the mail today.

'Til next time!