The 2nd property is for our new home. It is a short sale that has had numerous buyers fall through. The reason is 2 lenders. Bother lien holders are not wishing to budge on price and the 2nd lien holder wants to be paid off with cash at closing. Many folks looking to qualify for the loan simply do not have that cash. We do. The agent has promised to push our offer through. I get a much better feeling from this agent then the previous two seller agents (for our own home). The house has everything we are looking for in a home and then some. The downside is slightly higher cost, and home size. Its a monster, and a 1/4 acre lot. The Denver area usually has 1/8 acre lots. The purchase price is ~.56 cents on the dollar. Repairs look to be 55k with 20k making the property very livable. I’ll keep updating when I know more. I’m still not holding my breath, but this property looks very promising.

On the property management front, I finally got word from the PM. Well her mother actually. My property manager’s daughter had emergency surgery this last week, and the manager herself was rushed to the ER over the weekend. She remains in intensive care. The mother (who is a property manager in California) is now trying to resolve issues from out of state. I commend the mother’s effort and am not unsympathetic. It does not change the fact that I had no return contacts prior to the health issues.

This doesn’t change my decision to switch PM’s as they had no backup plans in place for issues such as this and I may be out several thousand dollars. I am cautiously optimistic on getting my tenants deposit money, back rent and contract agreement fee back. All totaling nearly $4500. At the very least I will be contacting her broker to ensure the deposit money and back rent totaling $2600 is returned to me. The other money will surely be contested, but I feel I have grounds for breach of contract.

My goal is to have a new PM in place by Friday. I have researched 6 companies and narrowed it down to one. I haven’t pulled the trigger just yet as I need to formally pull from the contract of my current property manager. I am also waiting to hear from my buyer’s agent. He has talked to several of his contacts looking for PM referrals.

Big update, but this week got very busy. Till then, I leave you with this quote, “We should not look back unless it is to derive useful lessons from past errors, and for the purpose of profiting by dearly bought experience. ” George Washington

I got 1 other offer out and looked at 4 properties this week. Set to look at another personal home potential tomorrow. Feels good to be busy and actually accomplishing things.

Incidentally, I did not get the probate house. The seller got a last minute bidder that I assume was significantly higher then me or anyone else. Oh well. Least the seller got a better deal. That would have been a monster project for a newbie like myself. I would have eagerly tackled it, but I would be happier learning on a much less steep curve if the opportunity arises.

I talked about networking last post. It happened again. Not that networking ever stops, but I continue to be amazed at the number of people you run into when you simply open a conversation. Talk to Strangers. So I had a home depot rep over to give me an estimate on refacing my cabinets. I had no intention of using them now, but if the price was right I would down the road. Turns out there as expensive as Sears. 10k for my little 10×10 kitchen. I think not.

I gotta hand it to the sales rep though, he merely through out a number and recommended for me to not reface the cabinets. As we got to talking real estate, he started talking about his rentals and flips. Turns out he is a home inspector and only uses the home depot gig to supplement his income during slow times. His knowledge of homes in the area was excellent and he said many key things that led me to believe he does know what he is talking about. I may not have found a good deal for cabinets, but I may have found another inspector to utilize when need be. Always handy.

That’s all for now. Btw, go over to my buddy Scott’s blog Struggling Investor and congratulate him. He’s getting his first MLS offer out this week. He’s a big go getter and I would not be surprised to see him getting 3-5 offers out each week and taking some properties down soon.

I’ll leave you with this quote “Playing it safe is very risky.” Seth Godin, Purple Cow.

Over my Asiago Cheese bagel my broker and I had a great chat. We discussed purchasing properties like my first two rentals. Only this time, I’m in control of the transaction. Before my LTV was 80%. This resulted in higher mortgage payments. I also lost a property in the deal because lending guidelines changed over night. I have seen plenty of keepers for 70-75 cents on the dollar after repairs. My mortgage broker knows a bunch of folks doing hard money loans. All he needs to do is validate I can support a new mortgage and they will loan the money.

While I’m about 5k short on reserves for my next rental, that will hopefully be in the next 4-6 months. My current focus is rehabs to provide that money to roll into rentals. The current plan with the rehab money is to keep 2/3 in the business for taxes and growth. The final third will go toward investments with a very small amount (less then $500) coming out for fun. (my reward).

I have no intention of rehabbing 12-20 properties a year. 5-6 would be great. I would like to invest with more of my own money though. If I stay small, there is no reason why this would hinder my progress down the road.

First things first though, I need to get the rehabs done. I should be hearing back from the probate seller by middle of this week with yeah or nay. He has contacted me 5 times to discuss the deal. If I get the contract closed I try and give as many updates as possible. I’m planning on many long, but very exciting days ahead.

Sorry for the late night ramble, but I wanted to get the post out before I prepared the next offer. I leave you with this quote “The only way it gets better for you is when you get better. Better is not something you wish; it’s something you become.” Jim Rohn in Seven Strategies for Wealth and Happiness.

The BPO (Broker Price Opinion) from the listing agent came in at our offer price. Those versed in short sales will note that the BPO must come from the bank. You are correct. That is still the case here. What the listing agents office does is rather savvy. They do their own BPO, get with the banks BPO agent and come up with a best price for the property. What he found is the bank BPO was generally coming in to high and he was having trouble selling properties from them. This makes his job much easier. It also makes it easier on all the parties to get the transaction done quicker.

My wife and I have a real good shot at this property. The purchase price is 51 cents on the dollar conservatively. We will be going in as owner occupants. We can wait out the lengthy short sale process. We are solid buyers, and we have a proactive agent on our side. All pluses. Time will tell.

On another note. I attempted to call one of the probates tonight to make an offer. I will try again shortly. I will be offering 160k on this property. My coach and I discussed 170k, but I ran the numbers again and rechecked the comps. I’m just not comfortable that high. The comps are very screwy in this area of million dollar homes and bungalows. My comp is at 300k with a high quality rehab. That number requires me to finish the basement. The basement finish requires 20k worth of basement floor lowering to increase the 6.5 ft ceiling height. If I have to duck at my short height, the ceiling will not pass code. I estimate 55k worth of work to this 1350 sq ft home. 675 up and down. I can make a very desirable 3/2 with master bedroom if I get the bid.

That is all for now. I leave you with this quote; “Nothing can stop the man with the right mental attitude from achieving his goal; nothing on earth can help the man with the wrong mental attitude.”
Thomas Jefferson

My current property will rent for $1000/mo. The mortgage will be $585. I’m looking at positive cash flow of $50-$100/mo. My combined cash flow will be around $400/mo. Those of you doing the math in your head will realize that I am currently break even. That is correct. I have learned a great deal over the last 18 months. I payed to much and my interest rate was to high on one property. Live and Learn.

I had a very busy day yesterday looking at two properties. Unfortunately the bank will not budge below 99k. I won’t budge above 89k. I can wait them out. The other property is off one of my probate letters. Its a 1929 brick bungalow. He wants 150-200 and has a few other offers. Depending on the repairs done to the property, ARV is 275-330k. Big range. This is in one of the top 10 desirable areas on Denver. Half of a new duplex down the street sold for 500k. This is one of the smaller houses in the area, but can be very good with some work. I’ll be talking to my coach tonight and hashing over some ideas.

I think I built a good relation with the seller and will hopefully help me out if I am close in price. The gentleman was very business savvy guy and had a ton of good things to talk about. I enjoyed my conversation with him. His concern is anyone scraping the house that has been in his family since 1958. I can understand that. I actually want to keep the structure intact. I love these old brick homes. I wouldn’t want to take something like that down. Hopefully this deal can work out for the both of us.

That’s all for now. I leave you with this quote, “Knowing is not enough; we must apply.
Willing is not enough; we must do” Johann Wolfgang von Goethe

On the probates. I haven’t mailed a letter or postcard in 6 weeks. I just got a call tonight from a seller with a free and clear home. I think he is tire kicking, but I want to go look at the house anyway. Reason, the house is a 2/1 thats free and clear. He thinks its worth 250k. Not likely. But if I can get him into a price below 200k. We might be able to deal. Yes thats not much room, except for the fact that lots all over this area are being scrapped to build 650k-1.2m homes. Including 3 lots right across the street. Could be some real potential here. Gonna look at it and talk to my coach after. Ya never know.

Another plus. When looking at the MLS, I was following advice given by Drew Downs and Steph Davis. They mentioned to search for zip codes with lots of cash buyers. Turns out three zip codes within walking distance all fit that criteria. Good to know. My farm area is more defined now.

Thats it for now. Rather cut and dry, but like Chris said on Good Faith Investing, become addicted to momentum. Click here to scroll down to his excellent reply to Shae’s blog. Scroll down to the comment by ChrisBuysApartments on May 6th @ 1:48 pm. Read it, print it and believe in it. Its great advice.

I have been doing my coaching items whenever I can fit them in. Life simply took hold and did not give me any free time what so ever.

With the help from my folks and brother-in-law I completely redid the landscaping on our yard. Its almost done. Bought 2 dozen plants and 3 tons of mulch. Added a new brick border wall up front, removed those three bushes, removed several trash cans of trash and rose bushes, had the front step mudjacked, added solar landscape lights, put in a 3×8 foot vegetable garden, built a temporary fence to keep the dog out, seeded and edged the lawn. Phew. To be honest though, I loved every bit of it. Still have a dozen plants to put into the ground, but its great.

My fiancés folks had their 50th wedding anniversary last weekend. That was very cool. Think about it. How many times in your life do you get to see a 50th anniversary. 3 maybe four times at most.

The next day I completed a bucket list item.

As far as real estate goes. I have dropped probate for now. I will be focusing on REO’s and abandoned houses. My goal is to make 5 offers per week.

My Realtor and I spend 6 hours one evening going over the MLS and offer contracts. I learned a ton of information. He’s a very good guy. He even asked if I want to be on his radio show. How cool is that. I have worked a deal with him to get a form of MLS access. All the same info on a time limited bases. Its a very good thing. Now I just need to squeeze out 5 minutes to make it happen.

Everything is starting to happen. I’m tired of sitting on the sidelines. Its time to take action. I love how busy I am at the moment. It means I’m living life to the fullest and not letting a moment slip by.

I got a motivated call this week. Unfortunately they want FMV on property thats out in the middle of BFC. The other deals are in progress, but no real progress has been made this week. I’ll update when I know more. Small update right now. I really can’t think of anything else to add.

Tom, just wanted to thank you again for kicking me in the arse. If anyone hasn’t checked it out, go over to his blog. His flips and advice are excellent. The best of the best have his blog in their blogroll. I know because I have seen his site on theirs.

Its amazing what a week will do to a mindset. Now I am not entirely positive quitting probate is my best course. This seller is someone I can actually help. He needs to get rid of this property. I’m not just some blood sucking, ambulance chasing, graveyard robbing, parasite. How cool is that. In case you can’t tell I’m a bit excited atm. The big question, can I stomach the hate calls in order to make this work? I’ll let you know after I help my first seller.

I got so excited, I forgot to mention I have a call with another very seasoned pro tomorrow. Okay, so its not as gung ho as it might sound. I’m looking at using his coaching services. Tomorrow is the interview. 1 hour long. Should be an interesting call. I laugh because I sent an email to the seasoned pro that said I work from 7-4pm and that I could take calls. I just hope he doesn’t call later, the interview is at 4:30. 1 week of nothing, now I put myself into a pickle. Fingers crossed the times do not.

I have another coaching service I am looking into. I will have to evaluate both. They are the same cost, but slightly different in their approaches. I think either one will be worth it, but I just need to decide which one will be best for me. Like Tony Robbins said, even Tiger Woods has a coach. I’m no Tiger Woods of Real Estate…Yet!

I’l try to update this week on everything happening.

I have received a few more negative calls. I’m not taking them to well. Its interesting how some folks are very eager to talk to me and others would rather rip my head off. I’m beginning to wonder if probate is the right avenue for me. I keep telling myself I am there to help the seller and many sellers need help in this situation. To be honest though, I think I would be one of th angry callers if I got one of those letters. I have talked it over with my fiancé and I will also talk to my mastermind group for input. What kills me also is lack of focus. This was one item I was really focusing on, if I stop, I will be taking a step back if I stop. A lot to ponder.

On a positive note, I will be making a bid on an short sale listing in the next few days. I’ll update on that one later. I need to sit done with my buyers agent and spell out my criteria for him, and have him do the same for me. He’s been very helpful thus far, but I may be outgrowing one agent. Random thoughts, but I wanted to post an update.