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.