MillHillionaire House Hack 02 "The C.O."

MillHillionaire Hacker 002 - The C.O.

After hiring a home inspector and a lawyer, I was feeling nervous about the prospect of the bank not clearing my loan. “This is how it’s done” and “These are the risks you have to take in order to get it done” they told me. In retrospect I’m not so sure how right or wrong they were. My lawyer turned out to be worth his weight in dogshit, and was extremely unhelpful - offered little to no assistance and ended up costing me extremely valuable… the C-O, or certificate of occupancy.

After spending “1500$!” I was under the impression that losing that money would be unacceptable and there’s no possible way I could back out, in too deep, I told myself. Boy oh boy did I learn that it was about to get a lot worse. Despite the client being locked into the contract for being responsible for the CO, in a foolish inexperienced panic, after sending them my unguided, unassisted ‘demands’ without counsel the seller responded back saying they were ready to back out of the deal. Not realizing that legally they were locked in until the end of November, I accepted their offer of a 2k price reduction but taking the CO, one of the worst financial mistakes of my life.

Still unapproved for the loan, it didn’t feel “real” to me, as though it probably wasn’t going to happen. I don’t exactly make a lot of money despite having good credit and savings so I was concerned that I would not be approved for a 60,000$ loan. I was honestly foolishly more concerned that 550$ to home inspector hurt and promise of 950$ to my lawyer would have been money thrown down the toilet, and I shouldn’t rock the boat for fear of losing that investment. I took the 2k price reduction and responsibility for the CO in a panicked state, no guidance from my lawyer who was CC’ed on the email.

68,000$ is not so bad I thought, I initially asked for 65K on 80K and they came back with 70K so I thought I was “in the clear already.” Big mistake. The repairs for the CO ended up costing me close to 10,000$ in the end, but I was still convinced that the bank wouldn’t even approve so I didn’t consider the ramifications. I made a lot of mistakes but from what I can tell is it takes a mistake to really learn your lesson, so I learned a lot of lessons. None of this felt real yet, it was all conjecture until I heard back from the bank.

My approval call was sweet joy and relief for all of 30 seconds until she informed me that I was responsible for a CO before close, a PERMANENT CO. If you’re unfamiliar with the difference between a permanent and a temporary CO I’ll explain it: 1) A temporary CO is like telling your buddy you’ll hit them back when you’re ready in about 3-6 months, 2) a permanent CO is like your buddy saying before you can come over you have to fix the front door, clear out the backyard, replace the railing, fix some electrical work, swap out the bathtub, rip out and replace 3 floors of carpet, replace the soffit (a roof overhang, later I would find out to be one giant block of rotting wood) and hope they don’t find anything else you missed.

When I hung up the phone with my loan officer I let out an audible “FUCK!” in my office in Philly. Thankfully it’s Philly so I doubt anyone registered anything out of the ordinary. My approval problems were over, and even newer bigger ones had just unfolded. As expected, the seller was none too pleased to discover that before they could sell their house they would have to wait around until the repairs had been completed.

There was a lot to do but my contractor made it seem like it was doable in a short period of time. It was mid-November and my agent asked my contractor “by Christmas” and I baulked, surely before then. If I’d had a good lawyer I would have been informed the following: 1) Before they can back out of the deal they have to file a motion, which takes 10 days. 2) I am not responsible for the holding costs or the utilities during the repairs, that perhaps if I’d known that I would have been able to handle the tidal storm of shit from the seller and the seller’s attorney threw down upon.

Next post: By Christmas.