Thursday, September 29, 2011

Out On A Limb

This is what I decided. I used my 401k as proof of funds and submitted an offer on the $50k house. If I get it, I will cash out that amount, fix up the place and rent it out. I figure $5k for carpet/vinyl, water heater, stove, paint, window coverings. That will not affect my offer on the other house because I will not have used any of the down payment for it and since I have already been a landlord for 2 years, the bank will include the rental income in the calculations to offset the taxes and insurance.

I went to see the house again this evening. Here is the lovely master bathroom.

The crazy kitchen (it is pink).

And the fancy front door.
When we got to the house today, my realtor looked at the sign in sheet and she recognized a contractor's name. He had been there twice. I think he is my competition. My realtor says that the contractors are flipping the cheap houses. I figure he can put $10k in this house with his own labor and sell it for $85k, no problem. He'll make $20k easy.

I'm not willing to offer very much over the asking price so I don't really think I will get the house. That's ok though. I hope the guy does fix it up and sell it to a nice family who loves it. It has a lot of potential.


Lizzie @ her homeworld said...

Property Developer Daizy? I love it. I especially love how much we all know you love dealing with the tenants! All the same it does sound fun. I am a little envious.

bbes tribe said...

Looks like it will someday be a nice house/home for some family. If you don't get it--- there will always be another one to check out.

Anonymous said...

Rental homes are wonderful! Good luck!

Daizy said...

Lizzie, I know, I must like the house hunting part. Of course after that comes the clean up, paying bills, dealing with tenants and all that fun!

Daizy said...

bbes tribe, I found some more on the internet today. Looking at them with investment in mind is much easier that trying to find one to live in. I must put it on hold though. I need to be patient and wait for the other house I want to get.

Daizy said...

Anonymous, they certainly can be and they are so cheap right now. So tempting especially with the mess the stock market is in.

Anonymous said...

Daizy - Two of the major things the lender looks at when evaluating offers is how solid is the offer and how quickly can the sale close. So while others may be offering more money than you, you really don't know if there are contingencies with the other offers such as if their condo sells then they will have the cash, if they can get a home equity on their existing home then they will have the cash, if the bank will extend a contractors line of credit then he will have the cash, etc. A solid "I have the cash already" offer wil trump a higher offer every time. Hang in there and best of luck to you, this looks like a great house for the dogs.