exnzpat buys a rental!

[eri]

Speaking from total ignorance here, how come foreclosed places are selling so far below market value? How are they determining market value?

Sure sounds like a great deal - good one!

the usa is a big place and as they say location location location

you could easily have a near new house being sold in a small city hundreds of miles from pretty much anything except the chrysler SUV factory that was built there 10 years ago on gov grants to bring employment to an unemployment blackspot

now that the factory is closing who wants the houses that were built 10 years ago for the workers???

probably not what's happening in this case but similar situations are happening and the buyers need to take a leap of faith in the long term to buy them

[One]

you could easily have a near new house being sold in a small city hundreds of miles from pretty much anything except the chrysler SUV factory that was built there 10 years ago on gov grants to bring employment to an unemployment blackspot

now that the factory is closing who wants the houses that were built 10 years ago for the workers???

But then the market value's 45K, not 170K.

Not that I want to rain on expat's parade, was just wondering whether there's something about foreclosures in US, so that if you sell a given house on the open market you'll get x but if it forecloses you get much less than x. Doesn't sound like it.

A house at 45K still sounds like a really good deal, as long as you can get tenants in.

[Bluekiwi]

He has probably bought in the US equivalent of Tokoroa or in that US town built on nuclear waste landfill, that name he mentions does sound famaliar

[exnzpat]

Day 1

Well, I got up early and drove the hundred or so miles to the house. I signed for it last week and received the keys in the mail a couple of days ago. In my truck I packed all the tools and equipment that I should need for the job. I have a camp bed and sleeping bag, radio, Lap Top, at least a week’s worth of groceries, and my trusty lab mix, Lincoln.

It’s the summer holidays here and my kids will be in various camps over the next week and the wife will do the running about town with them etc. That leaves me to work on this new project by myself. I work faster this way – no distractions – you understand.

I’ve always disliked the term “flipping” but Mrs. Exnzpat and I have done it for years. Our first home became a rental as did our second. We kept moving on to bigger and better homes for ourselves about every two years. We really didn’t realize what we were doing at the time. Some houses we rented and some we just sold outright. We fixed them up while we lived in them -- we thought that’s what everyone did!

The show “Flip this House” is a little contrived. Too much money is getting wasted on stupid stuff, like ripping out the drywall or smoothing out textured ceilings, also, way too much drama – contractors yelling at each other and such -- not very realistic. If I write this right, then over the next two weeks, you will see that the key to doing a property like this is organization and a little hard work.

My biggest beef, and probably the source of my negativity towards some of you on PropertyTalk, comes from Posters who view real-estate investment as some frivolous game that any idiot can play – just front up the dollars and you are in. It is not that simple. It is hard work – and some people just refuse to accept it!

I have to admit I’m not sure what it will rent for. Rent in the States is calculated on a monthly basis so my best bet right now is realistically around $700 per month. The house does not have a garage, only a carport; and that is a big negative in this Country during winter. My plan is to build a garage sometime over the next five years. But, at the moment, as a rental I’ll take a hit – my best bet to improve on the rent is to do a real nice job on this rehab.

The purchase price on this house is not unusual for this area. But, for this much of a home, it is. This is the third contract I’ve put on a house in this town in the last year and a half. I’ve been looking for a long time. We haggled with the bank for two months on this deal. We fronted up a deposit of 20% which is normal – but get this – in the end they offered to finance our deposit! No wonder the banks are in trouble! Banks can be quite fussy when you buy from them, and quite impersonal. It was not easy because they wanted to sell on their terms not mine. Apparently I have a very good credit rating and this is why they offered to finance the deposit. The $9000 I “saved” from the deposit is what I’m spending on doing the rehab. You might say that’s a good deal -- but not me. The banks goal is to maximize the interest portion of a mortgage over time, and borrower’s goal is to minimize his principal portion over time. Either way, the borrower is stuck with the interest; this is how, in a nutshell, why a bank wins the day every day.

All I really know about this home is that it belonged to a “newbie” landlord who got over his head. Basically, what happens to guys like this (especially over the last six years) is that they buy a rental (or a Flip) and then draw a huge line of equity on the place. Instead of putting the money back into the house – they live off it! Bad move -- very dumb – life has a way of catching up with people like that. And so here I am!

I arrived at the house at 10am and unpacked. Lincoln bolted from the car and began sniffing about – looking for rat’s maybe?

I set up the coffee machine, microwave, laptop etc. I’ve decided to start work in the Master bedroom first so I set up camp in the dining room. The only appointment today is the servicing of the Furnace and Air-conditioner. That’s at 1pm. So, I drove over to the local rental store and rented a wall-paper stripper and went to work in the Master bedroom. At lunchtime I cleaned out the very suspect refrigerator and for good measure; cleaned the gas stove – very nasty. I fed Lincoln, and left him to continue to familiarize himself with the house and the yard.

The Furnace and Air-conditioning man didn’t show – so I called and bitched-them-out. They promised that someone would be around first thing in the morning.

I have removed all the wallpaper in the Master bedroom and am now working on the removing the glue etc. Unpleasant work, but monotonous and soothing, all at the same time.

Well, I worked until 11pm. I finished the wall clean-up in the Master bedroom and couldn’t stop myself. I put the undercoat paint on the walls and painted the ceiling; a very satisfying first day. It looks like Lincoln is ready for bed – and so am I. Goodnight.

[tpr2]

Nice work expat

[sarahd]

Ah D.I.Y.... I miss it....NOT!!!

But I like hearing OTHER people's stories so keep going EXNZPAT!

[muppet]

Looking forward to more episodes to this story ex, so have made it a sticky.

[whitt]

Yippee Pt loves these stories.
Did you remember your digital camera so we can all follow along?

[Bluekiwi]

Why? .......

Manly love triggers my homo phobia

[tpr2]

great idea whitt, pics would be great

[exnzpat]

Day 2

Woke up early this morning, through the fog of sleep; it sounded like a woman was screaming. It was so loud it sounded like it was coming from inside the house, but must have been coming from the house next door. Perhaps, the old neighborhood was not what I remember! It was still dark outside so I called the cops – just in case – but they never showed up. Hmmm… looks like I’ll need to keep an eye on those neighbors!

Over a hot cup of coffee I used the early morning to watch my neighbors going to work. They all seemed pretty normal. About 7am a man and a teenage boy emerged from the house next door. On the pretense of getting a tool from the truck I went over and said “hello.” The boy petted Lincoln who (of course) enjoyed the attention. The man’s name is Jim and he works at the local car dealership as a mechanic. His son’s name was Michael and the two lived together. The mother, it seemed, lived across town. Jim was divorced. I mentioned the scream from last night. Before his father could answer the boy interrupted and said that he was going to be late for his camp. They got into their car and drove slowly down the driveway out onto the street.

I wonder what they are hiding in there. I thought, looking at their house.

That was enough snooping for the day. Jim’s house has pretty much the same floor plan as mine. If they are hiding something then it should be more obvious. These are not big houses.

My eyes and ears are what I use to absorb my world. I record it thus. Though, I will admit, that the idea of a camera has crossed my mind. But, some pictures are not worth a thousand words. Diary form is all I have. I’ll do my best but let me ask you, isn’t a poem just an efficient and succinct version of a short story? And isn’t a short story just a more efficient and succinct version of a novel? But no matter the story -- there are some that -- just when you think you know the ending – can surprise you. Before and after shots are all good and well but this is just a simple rehab of a little home, that in a few weeks will need renters. But like they say: “it’s not over until the fat lady sings” and there’s still a long way to go yet.

The Furnace and Air-conditioning man hasn’t shown up yet. Already, two hours late. I called the shop and they said they were now having difficulty finding someone. They called me back and promised that someone would be there around 4pm.

I went back to work. I inspected my work from last night and decided that the Master bedroom would need another coat on the wall. It only took an hour. Then something strange happened. As I was cleaning up my rollers and brushes in the kitchen I swear I heard a child sobbing. Lincoln heard it too. His ears picked-up and he followed the sound out of the kitchen and into the hallway that led to the three bedrooms. I followed Lincoln. Though, he stopped short of the hallway and would go no further. The sound was coming from the back bedroom; the smallest of the three. I walked around Lincoln who just stared up at me with that worried Lab look in his eyes. As I approached the bedroom door the sound stopped. “Who’s there?” I shouted. Nothing. The bedroom was empty. Very odd, and I might add; creepy.

The Furnace and Air-conditioning man still hasn’t shown. However, the owner of the company promised me that he would be over first thing in the morning and do the work himself. Hmmm… See, its unexpected annoyances like this that can throw you off. The furnace and air conditioner are fairly new and are probably in good shape, and while they seem to be working fine – they need to be serviced – and these local-yokels have already delayed my schedule by two days! Ahrrrr…

I spent the evening tearing out the carpet in the Master bedroom and used high gloss white paint on the baseboards. I dumped the old carpet, along with the rest of my growing pile of garbage, in the carport next to the truck. In a few days time I’m having a dumpster delivered and that will take the place of my “pile.”

So far the Master bedroom looks pretty good. The hardwood beneath the carpet was new, probably only a few years old (something I checked before buying the house) is in good shape and will only need a very light sanding and a quick polyurethane coat. I’ll try and do it tonight before bed.

[Bluekiwi]

Ignoring the fact you have obviously bought a haunted house expat I find your updates very interesting.....

Keep building up your portfolio and you will have Matt Gilligan stalking YOUR posts

[tpr2]

very nice writing expat

[PeterEmpowerEd]

very nice writing expat

I agree. Vaguely Stephen King.
Keep it coming, ex.
(I just hope the story doesn't get cut off by ... WHAT'S THAT? WHO'S THERE?!!?.....)

[tpr2]

I agree. Vaguely Stephen King.
Keep it coming, ex.
(I just hope the story doesn't get cut off by ... WHAT'S THAT? WHO'S THERE?!!?.....)

lol...that's what I was thinking too...