Local News and New Deals

Watch out for an interview with some of the women from Solano Community Investors Group coming up in January in a local online community examiner.

Website Address: www.examiner.com/x-2336-Vallejo-Community-Examiner

The online newspaper features local events, businesses, activities, restaurants etc. Three of us were interviewed about our business model of combining investors' capital with the provision of homeownership to those who cannot qualify conventionally.

The interview will be published some time in January.

In the meantime we had two offers accepted - $75k for a 2/2 1100 sq ft condo in Bencia and a 4/2 1700 sq ft townhouse in Vallejo for $110k - rents are $1200 and $1650 respectively. Picture of 4/2 on Daniels Avenue above.

Well, that's it for today. Caroline Hegarty signing out!

Recent Activities

Well, we have had NO offers on our house listed on the MLS even though we dropped the price to $219,900

We do not want to have the house vacant going into winter, so we are seller financing the house to a lovely couple and their two daughters who are moving from Burlingame.

Our deal will be a purchase price of $249,900 with 10% down, 7.5% full amortizing loan with a five year balloon. This will give them a payment of approx $1600/month plus taxes and insurance.

They are moving from a rental apartment where they have been paying $2200/month - win/win for everyone.

Looking to pick some new properties, but market has shifted considerably in several ways - huge reduction in inventory, very slow response time by banks and an overall very cautious buying and selling environment.

On pins and needles waiting to see what 2011 has in store!!

Rehabbed House on MLS

Latest acquisition was 4/2 1900 sq ft 2 storey home in quiet cul de sac - nice part of town.

Bought for $145k, $25k in rehab and listed for $229,900.

Two open houses, but no offers yet - alot of inquiries to rent, rent to own, or seller finance.

Will wait for a few more weeks to see what happens.

Winding down for rest of year to evaluate all of the recent turmoil in the big banking world.

Will be spending alot of time planning and preparing for next year to see if I can find some predictability in this mad environment!

Eviction Process

So had my first two evictions this year. One was smooth, as in defaulted. However, she was still there when I met the Sheriffs one morning but left fairly easily. Called me to make appointment to pick up her stuff in a UHaul van one week later, and actually left the place clean - wow.

The other one - not so lucky. Dramatic personality shift from the nice God-fearing woman I rented to! Gave ME notice that she was moving due to mold. Still there after 30 days. Left before Sheriff move out, but really trashed the place - $3,500 later, now rented again.

I will definitely not be writing a book called The Joys of Landlording.

I Survived Real Estate 2010 Event

Just came back from Los Angeles where I attended a great event put on by the Norris Group to benenfit Breast Cancer.

Over 400 people attended and the event was broadcast on You Tube.

After the dinner, a panel of experts were interviewed regarding their opinions on where the economy is headed both generally and in terms of real estate in the coming years.

The panel included Peter Wayman, Sr. REO Sales Director for Freddie Mac, Sarah Letts, Director of Credit Loss Management for Fannie Mae, and Joseph Magdziarz
President Elect of The Appraisal Institute.

You can find the recording of the live event on You Tube or on the Norris Group's website.

Latest Purchase

Our latest House was a short sale acquisition - a lead given to me from a prior transaction.

The house is 3/1 1284 sq ft single storey home with a single car garage, separate side car port and small back yard.

Purchased house for $70k, spent $18k on rehab, and recently rented out for $1300/month.

We currently have a $130k offer on it from an investor.

Bought house with owner still in place. Took about one month to get him moved out, including assisting with packing, moving, storage facility and temporary accommodation in the form of a hotel for a week!

Two of Our Latest Acquisitions

Our two latest purchases are both 3/2 ranch style homes, the first is 1378 sq ft on a 10,000 sq ft lot - completely updated but missing the master bath! We are selling it with seller financing (before 1st July!!) in its "as is" condition to a young couple who will probably be able to finance us out within 6 months.

Purchased house for $165k and seller financing for $200k with 10% down at 7.5%.

We will be working with this couple on getting them financed through traditional means by working with our team of credit repair and mortgage specialists.

Couple are very excited and have been calling every other day during closing process to find out when we can get them into ownership - very cute!

Our second acquisition, also a cosmetic fixer, (actually closing next week) is an approved short sale at $110,000. We have a potential young couple who will also take it in as is condition for $155k. This couple will be in a rent to own situation for approx. 6 months while we work on getting them financed. We are not willing to seller finance to them due to not having enough down for our comfort. We are working with them as they have good, long term jobs and their payment upon purchase will be less than what they are currently paying in rent by about $200/month.

Latest Underwriting Condition

We have been really busy with all of the transactions we have going on.

Things to be concerned about for us right now are the ongoing appraisal issue, increasingly onerous underwriting and funding conditions that are coming from the banks, and of course the highly controversial new SAFE Act which seriously affects investors' right to seller finance.

One of the most recent funding conditions we had was based on an underwriter's viewing of some chipped paint on an outside garage which we had to paint prior to funding (pictured here beautifully repainted in its entirety at a cost of $200)

Seller Financing Continued

SO, we have a total of 3 seller financed transactions in progress in addition to one closed.

Our goal is to set up notes that create at 9-11% yield to a note buyer. The second of these is as follows:

Purchase Price: $175,000
Downpayment: $17,500
First Note: $130,000 @7.5%
Second Note: $27,500 @7.5%

We will be marketing first note for $115,000 which will give a nice passive yield.

This creates a great win/win situation for a couple who could not qualify for conventional financing and an investor who appreciates the opportunity to earn a better than average return on investment secured by local real estate!

John Schaub Class

Went to hear John Schaub speak at the SJREI club in Pleasanton on Wednesday - great information as always. One day class on Saturday followed by dinner at local restaurant.

WHAT A KERFUFFEL

Well, we have had an exciting few weeks in Real estate on our end.

First of all, we have a new website which gives info. on all of the great ladies I am working with - we can be found at www.solanocommunityinvestorsgroup.com

On the Real Estate Side, having had 2 of our houses fall out for the second time, we are now switching to Seller Financing.

First House:

2749 Tuolumne Street, Vallejo

This was a profit sharing deal with half of net profits to underlying financing. As this is not longer a "cash out" deal, we will be adjusting the underlying note UP by half of net profits (more now as no RE commissions) and looking to cash out by selling note.

Buyer is a RE Agent with 10% down on purchase price of $164,900 30 yr fixed at 7.5% fully amortized 5 year balloon . Underlying Financing is currently at $92k and will now adjust up to $109,500 at 7.5%

Stay tuned!

First Quarter Review

We have certainly had an interesting first quarter in the "residential redevlopment" market with all of the changing market conditions.

Of the properties we rehabbed and put up for sale, we have had two fall out at the underwriting stage, several extensions on the others, and a couple scheduled to finally close this week.

Of the two that have fallen out (twice), we are now entering into a seller financing/rent to own option to avoid having any more non-income-producing down time.

Our plan is to structure the seller financed notes to be able to cash out of a first and stay holding a second - stay tuned to see how it works out!

There has definitely been a shift in our market this quarter.

We have noticed the usual last minute rush to get the $8k tax credit.
We have noticed an increased number of rehabbed listings for sale, thereby shifting the supply/demand balance.
We have noticed an increased number of listings of the bigger houses (1600 sq ft and up)
Definite increase in strategic walkaways.

Curious to see what unfolds this next quarter!

New Listing

This is another little house that is going on MLS tonight.

2/1 900 sq ft - ok part of town although not East Vallejo.

Bought for $62k, spent $12k and back on at $105k

With 3% down and 5% interest rate, someone can own this house for $546/month plus taxes and insurance (probably another $120 or so per month) Still cheaper than rent!!

The Trials of Buying and Selling in this Market

Just some information on some of our recent experiences on selling some of these rehabbed homes.

While several have gone smoothly, here are a few of the issues with some of our recent transactions.

First one - appraisal and inspection all done. Bank required borrower (750 credit score and 15% down) to go an open an additional trade line and wait for it to hit the credit bureaus. Then required additional documentation from CPA on tax returns. Each of these requirements involved a 2-3 week delay, and this house which has been in contract since end of January is now scheduled to close on 7th April.

Second one - attorney buying one of our houses upgrading from a condo she owned which she planned on renting out. Inspections and appraisal done and underwriting turned down loan saying she could not own 2 properties within a 5 mile radius of each other - Seriously!! This house is now back on the market after 4 weeks of working on that sale - ouch!

Seller Financing House

So here are some pictures of the house I wrote about a few weeks ago. Had a couple who wanted to buy it seller financing as is and then fix it up themselves. Well, looks like they got cold feet, so now we started the rehab this week.

This is a 5/3 3000 sq ft house - originally 3/2 1500 sq ft but has a legally permitted addition. We will be putting in new windows/doors, refinishing kitchen with current cabinets, refinishing hardwood floors throughout (were covered with carpet), some re-wiring, 2 new bathrooms, some roof repairs, re-converting illegally converted garage. Expect to have it completed in about 3 weeks. We will then look for a family that would like to live in this house but cannot get a loan, and we will seller finance it to them at 7.5%

Stay Tuned!!

Update on 229 Toledo Court

Well folks, had a great open house last week. Accepted an offer of $227k ($2k above asking) even though we had higher offers. Based decision on tight lending guidelines and the fact that the buyer had some cash to put down on the deal. Will keep you posted as things progress with inspection, appraisal and underwriting - always an adventure in this climate!

Toledo Court Finished

Finished product on 229 Toledo Court. On MLS yesterday and open house today from noon to 2pm. Been shown 5 times so far and one offer submitted for full asking price. This home is 3/2 1600+ sq ft with views over the city.

Bits and Pieces

Just some various updates on what we have been up to for past few months. I have taken on some new partners and we are looking to expand our territory into Fairfield and Vacaville in addition to growing our ability to offer seller financing to people who want to own but do not qualify for financing.

We are in the middle of our first such deal - 5/3 3000 sq ft house (odd for neighborhood as was originally about 1400 sq ft and they LEGALLY added a two storey addition.

We are purchasing this house for $159k and then seller finaning it "as is" to a couple for $220k at 7.5% with $25k down.

This couple run a home for autistic children and were paying $2500 per month for a smaller place in Fairfield. Their new payment on this house will be $1400 or so plus taxes and insurance!!

Napa Rehab

Here are some interior pics of our 3/2 house in Napa midway through renovation - about another two weeks to go.

Biggest challenge with this house is the 150' high Redwood tree that the City of Napa says has to be removed due to encroaching on street and preventing sufficient access to garage - will definitely have pics to show when doing that work.

Progess Report Toledo Court Vallejo

Here are some progress pictures of our 3/2 in Vallejo. We are about 2 weeks into the project and expect to be finished and back on the market in another week or so.

News and Latest Projects

229 Toledo Court

Obviously delighted at the waiving of the 90 day seasoning rule for FHA buyers - stay tuned to get clear on parameters on 25% net profit stipulation.


Check out our latest listing for sale on redfin.com- 371 Idora Avenue, Vallejo


Purchase $64K
Rehab: $25K
Listed: $119k

Also our newest house under contract (first pic above)- 229 Toledo Court - tri-level 1600 sq ft with views - for $130k with $35k rehab and planned relist of $225K

Currently dealing with two impending vacancies - one due to job loss, and the other a bit messy - one sister moved out, the other sister can't afford rent - sisters now not speaking and me in the middle - The joys of landlording!!

Latest Project and Plans for 2010

Just back from a great trip to Ireland for Christmas to see my family. Had a great time, although came back with the flu.

Have 3 finished rehab projects currently listed for sale on MLS and two being rehabbed with expected relisting time within the next 2-4 weeks.

Expect a few more accepted offers in the next few days and planning on looking at a bunch more houses at the end of this week once I have recovered from flu.

Pictures of most recent rehab here - 3/2 SFR purchased for $90k, $35k in rehab and approx $10k in resale costs. Partnership arrangment with prenogotiated split to each partner.

Looking forward to expanding into other Solano County markets this year and working on adding seller financing opportunities to homebuyers , so stay tuned!