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<p>The loan pre-approval is a misnomer, all that is telling you that from the credit score and your income level point of view, it “looks like” that you are qualified for the loan. Any clerk can do that for anyone walk into the broker’s office or a bank and get that letter. But now-a-days, it is extremely difficult to get an “investment” loan. When you see the large signs posted outside the bank branch “Home Loan Rate 4.32%” that is advertisement to an owner occupied loan applicant. Once the bank gets the application, everything changes its color. Its like college application, you receives 100’s of ads from schools like U Chicago but that is only ads, when you apply than they will look at you more “holistically”. The landing officer is doing the same thing as an school’s admission office, they will not only review your income they also will review your assets and liabilities, past due history and all kinds of stuff.</p>
<p>In the future, I will think twice before accept an offer from an “investor” unless it is all cash. That is why on California Residential Purchase Agreement, there is a box for you to check to verify whether the offer is from an investor or an owner occupied user.</p>
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<p>That is damn cheap. In the 5 months time, I used almost $20,000 worth of material. Maybe $3000 worth of plumbing parts alone. I think the 12/2 14/3 and 14/2 Electrical wires ran about $1000 for me. Are those in the truck?</p>
<p>For most things, they would buy what they needed for the job over the weekend and then bring it out to the site Monday morning (or have it delivered if it was something requiring a flatbed) - e.g. when it was electrical time, they would buy a box (or more) of wire, when it was framing time, a fifty pound box of nails etc. </p>
<p>The van was to deal with the misc little junk that comes with every job and can hold things up until the next day or until someone goes to the store to get the missing component. In the case of electrical - you think you need 50 junction boxes - but you need 51. Or you get done with the electrical and then two weeks later the flaky owner (guilty) decides to add another outlet over there. Rather than hold things up for a minor part, you have stuff on the van. $250 was probably low - but not significantly so. </p>
<p>Imagine in your businesses CoralBrook or ArtLoversPlus - you have a job underway doing plumbing rough in- and to finish up the bathroom, you need a simple 1/2 inch copper elbow. You can send the low man on the team to the store to pick one up - but you waste an hour of their labor for a part that costs $2. And the skilled labor does what they can - but can’t finish until the guy comes back with the part. All of that is money wasted. Obviously there is an investment that is made in having parts on the van - but the idea is that time is money and you want to avoid wasting it. This guy has been a GC for 30 years and knew what parts to stock. </p>
<p>Yes, having a van on the project full of stuff would be luxurious. As you saw earlier in this thread, I had to go to Home Depot 5-6 times the first day of plumbing. It was totally aggravating. But, I do not allow the highly paid specialists such as plumber or electrician to go to the store. I trudge out and do it instead. I had a plumber once insist that they had to do all the Home Depot runs. They would be gone a very long time… stopping for food, etc while they were out</p>
<p>PROGRESS TODAY</p>
<p>Today we started work on some structural changes that the buyer has requested. </p>
<p>The buyer asked to close in the hall closet and open it up to make a larger bedroom closet.</p>
<p>Buyer asked that the arch inside the kitchen be removed to allow for more cabinet/counter space. My design was to remove the arch also, but I was going to open up the wall to the living room to make an ‘open concept’ kitchen. She has decided to keep the kitchen closed up because she needs that wall for a better kitchen design.</p>
<p>She wants the doorway between dining room and kitchen (where the original swinging door is) to be opened up with a wide arch. </p>
<p>Photos are loaded. I’m going to work up a budget update soon for you all. So far $9,000 spent and I don’t even think I’ve owned the house 9 days 
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<p>^^ I would add a toilet potty and a generator on the van, if I have a chance…:)</p>
<p>coralbrook, you’ve made tremendous progress!! Both you and your buyer are very lucky you found each other. She’s getting exactly what she wants, and you’re getting to do exactly what your buyer wants. Can’t wait to see the finished product.</p>
<p>Boo, hoo…losing the swinging door. :(</p>
<p>We are definitely keeping the swinging door. I am wrapping it carefully with all of it’s ancient hardware. She says she has a ‘plan’ for the swinging door. I just don’t know what it is. </p>
<p>BUDGET UPDATE</p>
<p>Wednesday March 5 will have been 2 weeks since I started work on the house</p>
<p>Purchase Price = $422,500 with closing costs (I prepaid title insurance)
Renovation Costs = $50,000 reduced from buyer changes
Closing and Carrying Costs = $30,000 (includes termite fumigation)</p>
<p>TO DATE RENOVATION = $11,000
Yikes, where is this money going??? It hasn’t even been eleven working days. I might as well stand at the door and hand out $1,000 dollar bills at the end of the day!!</p>
<p>Total Rewire/Electrical 80% complete = $3,000 labor and materials</p>
<p>Plumbing 40% complete (all materials on job site though) = $2,000 labor and materials</p>
<p>My estimate was $5,000 and I am obviously going to be wrong again !! I think I have at least another $1,200 in electric work</p>
<p>Demolition = $1,500 Estimate $1,500 and I think we are done (well, except for the numerous runs to the dump later on)</p>
<p>Remainder lumber and building materials to repair foundation/floor joists, open up walls and put up new siding on garage.</p>
<p>Finally my ordeal is over, called by the escrow to sign the papers. I got excited and did not read too carefully. So when I got home, my title on the deed and other papers are wrong. Maybe I have to do it again tomorrow? Damn… </p>
<p>Drat, how aggravating. I always have to do a detailed review of everything and there is always mistakes. I cannot believe I pay these people $1,000 to fill out a couple of forms and shuffle some papers around and they make so many mistakes. Even worse is when they ‘pad’ the escrow costs about $500 for ‘unforseen’ costs and then take about a week to refund it after escrow closes.</p>
<p>This doesn’t happen with my preferred escrow company where I have established a relationship. I don’t let them pad, they have to come up with exact detailed costs, fees, etc. And then I review and push back on a lot of these fees. </p>
<p>Everyone - you have a right to question every stupid fee they charge. Some of them are ridiculous and some of them are optional but they ‘assume’ that you want to pay for the xyz service or feature. Fight to get them all out of your transaction. At first they looked at me like I was from outer space and said ‘that’s a customary charge’. I found title company and escrow company that I work with (and specify they have to be used on all sales) and they only charge the bare minimum required.</p>
<p>But I don’t have the luxury of selecting title and escrow on some of the properties I buy because the Seller (read… listing agent) insists on their services. Honestly, most of these sellers could care less who the title company or escrow company is. It’s the listing agents that try to demand to use companies they are familiar with, whether they are more expensive or not. It’s no skin off their back.</p>
<p>Speaking of mistakes, do you know they charged me county transfer tax twice? They are on two different lines one at the top of the page and the other at the bottom. If I don’t read it carefully, they will charge it as is! </p>
<p>On top of the escrow fee itself, they also charged $50 for document prep fee! Isn’t Escrow all document prep anyway?</p>
<p>Yes, you should negotiate the Document Prep Fee. In the future, if you have a chance, you should designate your own escrow company. You should have a discussion with that company that you want one fee and no additional charges are allowed. The deal with title companies and escrow companies is that they have to post their rates with the ‘Department of Something’ and they are not allowed to deviate from their rates submitted to the State. This is because there was collusion and kick backs in the old days between agents steering clients to certain companies or title companies giving incentives.</p>
<p>However, all the miscellaneous fees are negotiable. In addition, these companies have a special rate for ‘REO’ which just baffles me because there is more work involved in an REO transaction than the type of transactions that I do which are All Cash, no loan payoffs, etc. They don’t have a different rate for all cash transactions, which should cost a lot less to handle.</p>
<p>So, if you are buying through Auction, or an REO, make sure you ask for the ‘REO’ title rate. I think these ‘REO’ rates came about because the title companies are trying to get the bank’s business for all their foreclosure/REO transactions.</p>
<p>Here is a prime example of a house in the homesearch auction sold with “Reserve not met” and its destiny. This house was hammered down at homesearch for $400K and two days later I received an email from MLS and the price is $500K REO.</p>
<p>The bank don’t want to sell it at $400K ($420 with buyer premium) so they took it to the MLS.</p>
<p>I have been looking at all the short sales and REOs in my area and with only few exceptions, the price does not differ much from a regular sale, maybe 5% less, if that.</p>
<p>I am not sure if I want to follow those auctions any more, because it might be waste of my time. I was following a homesearch auction sale which was ended few minutes ago, and here is the ring side report:</p>
<p>4 houses, two in Vallejo, one in Manteca and one in So. San Jose (its a condo and not in a desirable area, lots of gang activities), for those who follow Bay Area real estate, you know they are not in good towns, Vellajo went bankrupt, for example.</p>
<p>They bid up all the houses up to zillow (I am using a combination of 4 different software estimates and name it zillow) estimates(within few percent margin) regardless two of those are owner occupied. The one vacant house is bid up to 7% more than the zillow. The vacant condo in San Jose had an asking price of 280k and they bid up to almost asking.</p>
<p>Granted, these homes require very little renovation, especially those vacant homes, But still, this is a crazy auction market, for that close in margin, I mind as well buy it on MLS…</p>
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<p>About 4 years ago, my weekly real estate office meeting which is attended by 50 agents at a time was “sponsored” by title and escrow companies. They provided food and drinks, they spread their flyers and they showered agents with perks. I am not sure kickbacks, but those “sponsorship” was stopped since then.</p>
<p>Agree about the auctions. I keep a close eye on the courthouse steps foreclosure auctions and the pickings are slim now and bids are high. However, I have noticed that bids at auction were only about 5% off retail price last year. But, after that market slow down in the fall the bidders cooled down a bit. I think some of the guys made mistakes and need to be more careful.</p>
<p>Winning bids on foreclosed properties in our County are at about 10% off retail price now. Still too close for me, I need them to be at least 20% off retail for the type of properties I work with. So, I have to pick through each one and find the one that the automated comparable sales engines like Zillow have their value way low. For example, if I know something is special and Zillow (and Foreclosure Radar, etc) list the value too low, I know that I will only bidding against local investors that know a particular niche area. This eliminates the big hedge fund bidders who are working with such quantities that they don’t have time to manually analyze each property.</p>
<p>How did you get the results from courts steps? Title profile?</p>
<p>It is crazy to bid that close on a foreclosure or owner occupied REO sale. You don’t know if the owner is going to damage the house upon exit because the inside is not inspected. And you don’t know if the owner is going to fight with the eviction or not, if they do, one year of carrying cost is gone.</p>
<p>I subscribe to a high quality detailed foreclosure auction and REO tracking service. It’s called Foreclosure Radar, although they are branching to a new platform called Property Radar which includes all properties, not just foreclosures. Expensive, but extremely important to my business. Very accurate… RealtyTrac and all the others have bad, inaccurate, untimely data and miserable user-friendly search engines. </p>
<p>For example, they will have the detailed post auction results posted within 4 hours, sometimes instantaneous (depending on the trustee). They pay trustees and auctioneers to tap directly into their data systems. For example, they ping every 30 seconds or so on the main trustees and I can see Opening Bids posted within about 1-5 minutes of them getting set by the lender/trustee. This is extremely valuable to me when I am sitting at the steps waiting for a property to be called and the Opening Bid hasn’t been set yet. If I see an Opening Bid come out really high I can just give up and go back to the car. </p>
<p>Guess which auctioneer will not cooperate with them??? Gee, Auction.com. They have a hard time getting accurate Opening Bids, postponements, post auction winning bids from those guys. I think they have to do it manually so those post auction results lag for a day or two.</p>
<p>Foreclosure Radar is owned by an experienced courthouse steps auction investor and it is designed for investors.</p>