Potential Property Four #5

After two weeks away from the shipping depot, my first day back will be today. I should be annoyed that my first weekend back will be extremely cold, with Sunday's “high” of 0 degrees. But I think I'll manage, especially since I think I've found Property 4!

PP4 #5 is a two-family in the Eastling area going for $80,000, and I decided to schedule a showing. On Wednesday I went to see it and, unlike the other potential properties, the neighborhood was very nice. I sat in my car and said to myself, “As long as the inside isn't complete crap, I'm buying this baby.”

I paid less attention to the cartoon and more attention to the sexy hardwood floors. Both apartments had very nice hardwood floors throughout. VERY sexy.

I didn't like the panel boards (I never do), but the tenant has enough style to make it look good

Antique is fine, but that kitchen sink is ancient and expensive to fix if anything breaks on it. I'd definitely replace that. The kitchen setup is kinda strange with the counter across from the kitchen sink, but easy to get used to after a while.

I forgot to take pictures of the downstairs apartment, but it's about the same as the upstairs except for the sexier kitchen. The downstairs tenant seemed a bit lowbrow for the area, but was kind enough to make me not care. The upstairs was nice, except for the out-of-date kitchen sink and the panel boards in the living room. The tenant appeared to be a single mom, but I smelled lesbian from the moment I saw her. Either way she kept the place neat and was as nice as the downstairs tenant. We couldn't get into the attic because of the locks, or the basement because of the snow blocking the door. Once the showing ended, I knew that PP4 #5 had to be mine.

The taxes for the place are a little over $3,200 which is pretty high for Smalltown, but understandable due to the location. The only issue, and the reason why the property hasn't sold since June, is that the property has only one heating unit. This means I'd be stuck with the bill, like I am for Property 3's four apartments. Te real estate agent, Clay, sent me the heating bill for last year and it was definitely doable. So I put the wheels in motion and called Empower looking for a rate quote.

My goal is to get a 30-year fixed rate with 20% down. I got the owner to agree to $77,500, so my estimated monthly payment should be around $730 with the insurance. That leaves me with more than enough to meet my requirement of at least $500 a month income from the place. I called Empower, and the lady said that I can't get a 30-year fixed rate with an investment property. The only way I can get it is to declare my purchase as owner-occupied. This means that I intend to live there. All that's required is a letter along with the application stating why I want to move from my current address (Property 1) to PP4 #5's location. If this is the only way I can get what I want, then so be it. I just hate lying, and it really got on my nerves that I'm being forced to lie just to get a deal that should be on the table for investors like me. The owner-occ deal was created to improve neighborhoods by selling properties to people that live locally, as opposed to out-of-town investors who may not care about the neighborhood. The idea is that people with enough money to buy a property will live there and spend money, improving the economy and the neighborhood. I LIVE in Smalltown, the same place where I invest. There's no reason to put me in the same category as an out-of-town investor because I'm clearly not. Ah well...

The Empower lady also said I should wait until the end of the month when my bank funds are higher. I have just enough to buy the place with the closing costs, but not the $3000 in reserves needed to satisfy their requirements. I would have had it if not for Property X's over $2000 worth of repairs, but that's all spilled milk. So now I have to wait and save, and I'm looking to start the process of buying PP4 #5 in the first week of March. I should have it by the end of April, which is perfect timing. I won't be responsible for the last of the high National Grid bills for that place as long as the place closes at the end of April.

So there it is. Cold weather and shipping depot blues won't bother me too much. I believe I've found my precious Property 4, and that means I'm one step closer to retirement. 

P.S.: Hmm, I was just about to publish this post when I had a thought. What if I waited until buying season and tried to get a three family in a good area like Eastling? The single heating unit will definitely keep investors away, so I can use this place as more of a  last resort than a must-have. And I'll be in a better buying position with my 2014 taxes done and enough money (and reserves) to buy a $100,000 home. Hmm. I guess I have some planning to do.