Wednesday, June 22, 2011

The List. The Second One.

So, I knocked everything off of that first list after a ton of digging and faxing and copying and etc.  While I was finishing up everything, I was sent a second list.  Hooray.

Listing agreement proving that my investment property is for sale
Current investment property mortgage statement showing that my taxes and insurance are escrowed
Provide a statement and proof of withdrawal from Fidelity Investments (the 401(k) that I cleaned out)
Another copy of any paystubs I might get before closing

I finally got them everything that they “need” this morning.  Now it’s just up to the terrible underwriters.  If they approve everything, we sign our names seventeen hundred times in a lawyer’s office.

In related news, I got some insurance for the house.  That’s really important, because sometimes, houses are set on fire on purpose.  How I got that insurance was kind of fun.  Here’s the story:

A week or so ago, I decided to give Geico a call to get a quote.  Since we have two car insurance policies with them, they would likely have the best price.  At the end of a long call, I got a sweet quote to use Travelers Insurance (crap) at just over $1000 per year to cover the structure.

That was the benchmark.

Shortly thereafter, I talked to Jonny Lee Rodgers and asked him I he knew any insurance brokers.  Of course he did; he’s a Realtor and a go-getter.  A few hours later, I received a call from Insurance Shawn Nunley, gave him the relevant details and he went to work.

*Aside* – How on earth do the letters S-E-A-N spell Shawn?  I hate that essword. *Aside over*

The next day, he let me know that he couldn’t come close to beating the quote from Geico (Travelers) and was questioning whether or not it would actually be underwritten.  The reason that he was leery was because of the claim on the last house (from the fire).  Usually, large claims like that lead to higher prices.  I let him know that I would likely go with Geico (obviously) and would let him know if anything went wrong.

I called the folks at Geico and said that I’d like to get the policy written up at the quoted price from a few days before.  They pulled up the old quote and let me know that they’d approve it in a few minutes, then send out the policy documents and we’d be “good to go”.  I thanked them and waited on hold for a minute or two. 

Or three.

Or five.

Eventually, the agent came back onto the line and let me know that the underwriters were still reviewing things.  After another three or four minutes on hold, she came back again just to say that they were still reviewing it.  I asked what the problem was and she let me know that they were going over the previous claim and wondering whether or not it was arson.  I reassured her that it was in fact arson, one house of many that were set fire to that night, and offered to send the link to the news story about it.  After I gave her the link, she put me back on hold.

Geico has bad hold music.

Finally, she came back onto the line and informed me that they were rejecting the policy.  I was bummed.  Apparently, the underwriters weren’t satisfied with the fact that I didn’t purposefully set fire to that house.  I really hate underwriters very much.

I then asked for a new quote, which she got me, from another underwriter that Geico works with.  Almost $1600 bucks per year.


I thanked her and let her know that I’d call back if I was interested.

Immediately thereafter, I emailed Insurance Shawn asking for some quotes.  He asked me for some car information (to get better rates with multiple policies) and said he’d get back to me on Monday.

Monday rolled around and I got some numbers from Shawn.  The best quote he gave me was $25 more than the quote from Geico (including car policies).  Switching insurance for the cars would have been a hassle, plus it was more expensive, thus, I thanked him for his work on my behalf and said I was going to stick with Geico.

Yesterday, I called Geico once again to get that expensive stupid policy.  I assumed that they would have had the most recent quote in their system and offer that one immediately.  I would reluctantly agree and that would be that,  Instead, my hopes rose when the agent pulled up the first quote; the super great thousand dollar one.  She said she would put me on hold for a minute to get things approved, then actually came back onto the phone a minute later with an approved policy.


I asked her if it was actually approved by the underwriters and the policy was “good to go” and surprisingly, she said that yes, it was.  I was really pumped, but acted like a normal human on the phone.  I got all of the information I needed and had the agent send the insurance info to the mortgage folks and wablam, I cheated Travelers.

I can’t wait to regret this when something happens to the house and I have to deal with Travelers for seven straight months for no reason.

Wednesday, June 15, 2011

The List

Pay-stub from current employer
Contact information to verify current employment
Provide a letter from new employer on company letterhead of new hire
Two years W2s ('09 and '10)
Two years tax returns ('09 and '10)
Two months most recent bank statements
Explanations in writing of all transactions exceeding $1000 on bank statements
Copy of driver's licenses and Social Security card (for both signors)
Proof of Earnest Money check clearing account
Signed Inquiry Letter
Letter of explanation for any credit discrepancies during last ten years
Letter of explanation regarding 7 month gap in employment
Contact information for Homeowner's Insurance agent
Completed credit card authorization form for FHA appraiser
Clear Termite Report

The above is the list of crap Amanda and I need to get together in order to close on the house we might live in.

Wednesday, June 8, 2011

Wheelings and Dealings?

Wheelings: We bought a tiny Fiat for Amanda yesterday. It will be delivered by Friday. She is very excited.

Dealings: We have an agreement on a house. Hooray. Here's how it all went down:

When I last wrote, we had put our "best" offer in on the second house pictured and described in my last post. That offer was 142k with 2k back at closing. I got an email very late on Friday night from Jonny Rodgers from Texas saying that we didn't win with that lowball bid.


Since we lost out on that house, we went to Plan B, which is the house featured third in that last post. After doing the research, the neighborhood was more expensive overall than the house we first offered on, so we bumped up the initial bid to $138,500. We signed off and sent that over, thinking that the sellers would likely drop the price by a grand, reminding us that the house was priced slightly under market value already.

Hours later, I got a message from Mr. Rodgers saying that they had offered us the house at 142k. I was pleased. They also asked if we could either close in late July (the closing date on the offer was July 6th) or if we could close on the 6th and lease them the house until the end of July. in other words, they aren't ready to leave, which is strange since the house has been on the market for months. I guess they weren't too hopeful about selling it?

We countered with our "Final Offer" at 140k with closing on the 30th of this month and a lease for them until the 15th of July. In other words, the house is ours as of June 30th, they can live there until the middle of July, but pay us $50 per day living there.

The next morning? Accepted. Wablam.

We're going through the super fun mortgage process and are pumped to not only have a house to live in, but also get paid for 15 days for no real reason at all.

We are decidedly less pumped to be living in the Extended Stay Deluxe for an extra 15 days.


Friday, June 3, 2011

I Will Never Top That Last Post Title. I Won’t Even Try To.

I start pretty much every post lately with some sort of apology for not having written a blog post in a reasonable amount of time.  It’s basically because nothing is really happening on the house flipping front.  That should change pretty soon, so hopefully, I’ll have some more frequent updates in the coming months.

First, a Providence multi-family home in the ghetto update:

It’s fully rented for a total of $2,100 per month.  That brings a profit of about $500 per month after paying bills and management people.  Sweet.

It’s still for sale, but nobody is interested in it.  Part of the problem is apparently the For Sale signs in front of the property keep getting stolen.  Not quite as sweet. 

I am mulling taking it off of the market for a month or so, then dropping the price and getting it back onto the market.  This will get some interest in it hopefully and then I can sell it.  Once it’s sold, we can take the profit and flip another house.

As for the rest of my life?  It’s still weird.  As you may have read in the last post, I was jobless and not penniless in Puerto Rico, so we decided to move again.  I’ve spent the last few weeks interviewing at some places and have found yet another company foolish enough to overpay me for my internet nerdery.  That company is BazaarVoice based in Austin, Texas.



My wife and I drove down here in a rental car packed with stuff about a week ago and have been living in a terrible Extended Stay hotel (complete with a two burner electric cooktop.  Two!) and we both start work next Monday.  I am super bummed out about having to work again.  Ugh.  I haven’t reported to a cubicle since last September.  That’s a long time.  It has been awesome.

The upside to working again is the aforementioned overpayment.  It is substantial, at least in my eyes.  making it even more substantial? The cost of living here in Austin.  It is hilarious.  It should, along with my salary plus Amanda’s salary, enable us to buy a home to live in and fix up slowly for sale a few years from now, plus a second house to flip for a much quicker profit (hopefully). 

We’ve spent the last few days going to about 30 houses, checking out neighborhoods and taking a bunch of pictures.  Since this is the house in which we want to live, we were looking in the $150k and under range, which surprisingly, is enough money to buy a nice house in a good neighborhood here in Austin.  Hilarious.

After we looked at all of the places, Amanda and I debated a bit and narrowed it down to a few choices.  My first choice was this place:


It’s a HUD home (government owned) with a giant garage (obviously), four bedrooms, two-and-a-half bathrooms in 1,600 square feet.  The asking price?  $108k.  I was licking my chops.  The best aspects:

Decent Living Room/Kitchen/Breakfast Nook:


Good sized yard and completely awesome patio (with ceiling fan):


The four bedrooms and bathrooms were decent sized as was the master suite closet.  Oh, and the best part of the house:




Since it is a HUD home, there was a bit of a learning curve to it.  After some research, we found out that there is a bidding period (handled online) followed by an accepted offer.  I asked our Realtor, Jonny Lee Rodgers (seriously.  That’s his name.  How Texas is that?) to ask the seller’s agent (yes, the government needs those too) when the bidding period is finished up.  He called back later and said that the bidding ended and an offer was accepted the day before.  Crap.  That awesome house with lots to do in it is officially off of the market.

Amanda’s number one choice is this house:


This one has the obvious giant garage, four bedrooms and three full bathrooms in a little under 2,000 square feet offered at $150k.  Highlights:

Living Room with super classy balcony thing:


Large Kitchen/Pantry/Breakfast Nook:


Large Master Suite (with office sized closet that my camera can’t do justice to):


It also has a small porch leading to a nice sized yard that I couldn’t photograph because a dog was back there.

We went to Jonny Rodgers’ (I swear I didn’t make that up) office early this morning and signed an offer for this place.  We bid, after looking at comps in the neighborhood, at $132,500.  We thought that the actual value of the house was around $136-$140k and figured that we could negotiate down to something fair.

And then…  We got a phone call…

Mr. Rogers (awesome) called me and let me know that the house actually got another bid the night before, which I found fishy, but might actually be true.  I found (and still find it) fishy because there have been no offers on the house, save for one low ball bid, since it’s been on the market (82 days now).  All of a sudden, we put a bid in and voila, another bid materializes.

Fishiness aside, here’s how multiple bid stuff works:  Instead of going back and forth with the seller, the buyer sends in their best bid.  Once the bids are in, the seller picks one and that’s pretty much that.  The idea is to put in the strongest bid that you can muster and hope for the best. 

Because of this situation, I asked Jonny Lee Rodgers to pull some comps on another house that Amanda and I gave some heavy consideration.  This one:


This is a three bedroom, two-and-a-half bathroom, huge garaged house stuffed into just over 2,000 square  feet.  highlights for this one include:

Huge Living Room/Dining Room with a fireplace:


Humongous Master Suite:


Decent sized yard (trampoline negotiable) and the best deck we’ve seen (and covered):


What pushed house number two up there over the top was the neighborhood and the lot.  The third place was right next to a semi-busy street (hence the retaining wall behind the shed in that second to last picture) and thus, less desirable (for us and for re-sale).  Plus, the comps in that area were much higher that the comps in number two’s area, so I’m not sure we could come down much from that $150k price.

Weighing the two against each other, Amanda and I decided to put in another bid on house number two.  We don’t want to overpay, as we have a completely livable and acceptable back-up plan, and so we decided that our best and final offer is $142k with $2,000 back to us at closing for closing costs.  The number is above what I think the house is worth, but it’s evened out by the closing costs credit from the seller.

I called up JLR (that’s how he signs his emails.  That should be letters on the sides of a herd of cattle.  Awesome) and told him what we wanted to do.  He said he could call the seller’s agent and get back to me as soon as he heard anything.

I’m happy either way.  Both houses are good for different reasons.  If we get out-bid, no big deal, as we have another house chambered that is an excellent place.  If we win the bidding “war” (SUPPORT OUR TROOPS!  FREEDOM ISN’T FREE! THESE COLORS DON’T RUN! TEXAS IS AWESOME, SO YOU OUGHT NOT MESS WITH IT!), I won’t be upset for overpaying because I think our offer is at the top of the houses value range.

Either way it goes, we have found a large-ish house to live in for a hilariously low price.  We can slowly upgrade it over the years, then sell it for a decent profit (I hope) and avoid the Capital Gains Tax and move onto the next one.  While living there, we can easily afford an investment home to make some quicker profits on.  The eventual goal is to flip enough on the side to be able to afford, once we can sell one of the houses pictured above, a great house and pay for it in cash.  Like a complete baller.

That’s all for now.  I’ll keep updating this thing as I get some more info.  Glad to be back.