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.