House #3 Under Contract To Buy, More Info

House #3 is now under contract to purchase.  It’s an REO property located less than 2 miles away from House#2.  I actually looked at this property a couple of months ago, but did not pursue it because upon first look it appeared to be a pretty big project and the numbers would not support an offer anywhere near asking price. But the bank recently dropped the price and I went back to take a closer look. I decided to make an offer at the full reduced price. As expected, numerous offers came in on the property and it went to highest and best. I ran the numbers and raised my offer price by 3K. Over a week went by with no feedback so I assumed another buyer got the property, but the agent emailed my agent saying the bank would accept my offer as long as I’d remove the 3 day inspection contingency. (Apparently the asset manager was new and interpreted the inspection contingency to mean I was going to ask the bank to make repairs).

I met my contractor at the property to determine a repair budget and it turns out the house will not need 2 major expense items I had allotted for in my budget. First, the roof is in satisfactory shape. Second, and most importantly, the house will not need all new siding. The back of the house has rotten siding , but the damage is isolated to the back. So we’ll replace the siding where needed and just paint the rest of the exterior which will save thousands of $$$.

This one got its name because the previous owners left behind 3 things in the entire house.

1. 1. An Igloo electric cooler
2. 2. A crate full of vintage vinyl LP’s
3. 3. A crate full of Playboy magazines. 

Have fun trying to draw a connection between those 3 items!

There is no deed restriction on this one so I want to close ASAP so we can get it rehabbed and on the market before colder weather starts rolling in. 

 Purchase price on this one is $48,000, which I think is a great deal.  I’m hoping to keep the rehab budget at or below $20,000 and I expect the house to sell for $100-110K after it’s rehabbed.  My main concern with this property was that it was going to need all new siding.  But, it turns out that the damage is limited to the back of the house (as seen here).  So, we will repair and replace the damaged areas.

On the exterior, we will repair and repaint the entire exterior, Install new garage doors, and add new entry doors.  Almost all of the windows are failed, and will need to be repaired/replaced.  We will remove the damaged fencing and replace with new wooden fence.  Some minor landscaping will also be needed, and I’ll probably end up removing the bush at the front of the steps.  As a stroke of luck, I think I will be able to take the undamaged panels from the garage doors and use them to repair the garage doors on House #2. 

On the Interior, I want to keep the chocolate ceilings.  Really.  Ok, just kidding.  The entire interior will be repaired and repainted, along with new carpet and vinyl throughout.  Also,  I’ll probably end up putting ceramic tile in the front entryway.  As always, the house will get new light and water fixtures throughout, as well as new door and cabinet hardware.

There is less cabinet space in this kitchen, so I’ll have to decide on putting in all new cabinets and countertops (what I want to do), or install new countertops but just repair and repaint the cabinets.  We’ll put in new appliances throughout to hopefully make for a faster sale.  The lower level is already finished in this house, so I’ll end up just bumping out the wall into the laundry room and also into the bedroom to add a closet so we can call the room a bedroom.

I’m hoping we can get the bank to close on this one ASAP so we can begin renovations.  I’ll post an update when we close and get to work!