I would not start a war with the sellers by bringing the city in if there are other buyers lined up… They might end up doing the repairs and selling the house to someone else. Remember, a counteroffer kills the original offer - there is no longer a contract, so tread lightly.
Amazing! We finally hooked up the hood, and it works!! The cool LED lights work, too. Now comes the “easy” part: drywalling the ceiling around it. 
It will require some creativity. I am half way through painting the bedroom, the carpet folks are coming in next week to do the tear out, the Pella fellas installed the last window, and the countertops are lined up as well. The siding crew should be done soon, too. Then I am on to painting the siding and doing touch up painting inside the house and then cleaning and staining the deck that badly needs is. 
We need pictures BB!
^^I need either a better phone or a home wifi! Can’t sell my soul to the evil Comcast until the siders complete their job!
Ugh. Evil is right. My mom has no choice but to have Comcast (condo) and they are the worst!
Flip #7
Nothing new on the market that has enough potential.
My agent and I went to view the bee hive house together yesterday because I wanted her advice on how much work is needed to build out a master bedroom and any other suggestions she has. She thinks it’s important to have 4 bedrooms to appeal to a family.
When we arrived there was an Open House by the listing agent. I didn’t want to go in with another agent so I waited down the street.
Two pieces of good news…listing agent told her ‘no traffic at all’ at the Open House. And, she came out with a great idea. There is a very small bedroom sandwiched in the main house. We are going to steal the entire room to add closet and bath to the master bedroom. This saves a ton of money to permit and build an addition, plus eliminates an extension into the smallish back yard. Then we will steal a bedroom out of the front living area (photo of fireplace room). Front room doesn’t need to be so big because there is the large family room in back.
All in all…savings of $20 to $25k in renovation budget AND no other offers coming in that I know about. I’m going to call the agent Monday afternoon to check on status
Hope it works out. But how come NO other offers?
I’d also be curious about why NO offers from others–priced too high? Needs too much work? Others scared of bees?
Priced too high. The listing agent is using some very good comparable sales that support the asking price. But, even though the other homes were outdated also, they were liveable. This house has chopped up rooms and most buyers are going to see big dollars to renovate. Also, the others at least had an attached master bath and decent closet.
It’s not ‘special’ and doesn’t have any view. But, if purchased at the right price it could be a nice home.
I think all the other investors are clamoring over the view/potential view homes to gut and bring out at huge prices
Well, that’s good for you, cb. Sounds like they’re all looking at “hare” ideas and you’re looking at the “tortoise” idea. (Is that metaphor kind of strained??)
I’m trying desperately to stay in the low/mid range of the neighborhood. I am watching all the other guys trying to sell big gut/rebuild/add square feet trying to sell their $2 mil plus houses. Here’s how they are doing… some of these were coming out to market at the same time as my last project and still have not sold (as you can tell… I waste a lot of time meticulously following all the other investors to see what they are doing. I’m hoping they are all maxed out at this point and are not going to be competing for a couple of months)
All of these are in the 92107 zip code
4 5 2 3 /.////// O r c h a r d
I think this is a woman who purchased and then put it into an LLC. Purchased $816k in 2/2015. Permit issued 6/2015, but did not finish addition/remodel/2nd story building until November 2016 (way too long) and didn’t final until 3/2017. Up for sale 12/16/16 for $2.275 million, dropped to $2.1 million in 2/2017, then dropped $2.05 in April and finally down below $2 million at $1,980,000 this month. Obviously this investor is not in a hurry to sell?
4 4 5 4 ///////// O s p r e y
Purchased $1,245,000 June 2016. Paid too much for the property. Permit issued March 2017 and final completion May 2017. Master bedroom addition and complete remodel, added 2 car garage. Up for sale barely under $2 million for about 30 days.
4 4 1 0 /////// Adair
Purchased 8/2015 for $870,000. This was a house that I offered about $840,000 on but was worried about issues with remodeling. They are building a monstrosity contemporary house that has hit issues along the way with the City. They started selling it ‘coming soon’ last year. Formally went onto market March 2017, saying ‘complete in May’, but May has come and gone and now the listing says ‘complete in mid June’. Well, they have just barely got the stucco on the exterior and new windows installed. I cannot imagine they will be complete in 1 week. Listed for $2.1 to $2.29 million with no bites so far.
4 5 6 3 //// A l ha m bra
Purchased October 2015 for $1,200,000. Paid too much for it. Not out to the market with total rebuild until 2/8/2017 for $2.4 million. Just went pending after dropping price to $1.965 million, changing realtors and 5 months on the market.
4483 /// adair
Purchased for $695,000 in 8/8/2014. Took forever to build. They tried to sell it for a long time as ‘coming soon’, claiming they were going to be done in October 2016. Fired contractor, failed a lot of inspections. This was a ‘newbie’ investor. Have been trying to sell since September 2016 at $2.5 million and just dropped their price to $2.3 million. After 9 months on the market they should just bite the bullet and get down under $2 million
So this is an example of what the other investors are buying. (BTW… chicken house has STILL not closed escrow) and they are all trying to sell above $2 million. I don’t want to have anything to do with that price range. My goal is to buy a project that can come back out under $1.3 million, which is the mid range right now. If I could get ANYTHING that could come back out under $1 million, it would be golden. Off the shelf in a week.
How does this work, exactly?
They were clearly doing work between June 2016 and March 2017 when they got the permit, because there’s no way they could add an addition, a garage, and remodel everything in only 2 months. How did they get away with this with the city? Or am I missing something?
That’s a very good question. However, for this guy (who I will not follow down a rat hole, he has made too many mistakes with his purchases), his history is that he keeps buying things up but only works on one at a time. He didn’t add a 2nd story, so his structural was minimal for the addition. I’m guessing he was demolished and rehabbed o n the original portion of the house and just hit the ground running the minute his permit was approved. There was probably about a full 3 months of work after permit issued.
Some of these have me perplexed. You say they paid too much for the properties… but a property purchased at $1.2 million and sells for $2 million or so has grossed $800,000. Did they spend that much to do their renovations?
cb, it sounds like you’re smarter than they are. And your eyes are not too big for your stomach.
Most of these guys are using hard money loans from private lending companies. The cost of that money is 2 points and about 9% interest. I can see their loans recorded. Just for calculations… if they borrowed $1.2 million to purchase and rehab, that’s $24,000 up front, plus $9,000/month just for interest costs.
Property owned 1 year = $24,000 + $108,000 interest
And, that’s just the beginning. Add another $12,000 for property taxes, insurance and holding costs. Then $300,000 for renovation, permits, etc.
Then 5% commission and about $10k buying/selling costs. Another $4k for staging (because I know their agents do not stage, they do it themselves)
So, in the end they waited 1 1/2 years to maybe make $200k? And they have ‘staff’ that has to be paid, I think
As I said, you’re smarter than they are, cb.
I’m not smarter than they are… I think their egos are really big and they want to do these humongous fancy pants houses and sell them for big bucks. (of course… look who just finished a 2,000 sq ft addition!!!, eat my words)
The part that I do not get is that they sit on the market forever, holding out for ‘their price’, or some price that an agent fooled them into thinking they can get. Usually it is the same agent that talked them into buying the property for $1.2 million to begin with. That is where they are different. I would’ve dropped price immediately after 21 days and kept going down until it was sold.
They think they ‘have’ to get X because they need to make Y’. The world doesn’t work that way. You’re going to get what someone is willing to pay, regardless of how much you spent or how much you thought you were going to make in profit. This usually happens with new investors. I personally believe that selling as fast as reasonably possible (to avoid those holding costs) is more important.
Bee Hive House
I just spoke with the agent to get status on the listing. They had 2 Open Houses this weekend, but ‘they were slow’. I already knew that from stalking and my agent going through. But, he said there were 2 potential buyers that came through, that were actively looking/ready to buy. But, no offers and no calls from any agents indicating they have interested clients.
The Seller Trustee is out of town this whole week, but he might be speaking with him on the phone later this week. I’m just crossing my fingers that there will be no offers, or offers near asking, this week and the Trustee will return and want to finalize the transaction. 21 days on the market is plenty of time in this neighborhood.
If it’s meant to be, I’m sure this house will soon be yours. Good luck!