Thursday, March 31, 2005

Another Update

I just got back into town after being gone for a couple days. I spoke with my handyman and he's done most of the painting and has some touch up work left to do. He also discovered the fan in one of the bathrooms that the inspector says does not work actually does - there just isn't a switch for it. He took it out and plugged it into an outlet and it ran, so he's trying to figure out what to do with that. He expects to be done with everything by Saturday.

The quote for the carpet came back - $1,164, which includes a new pad. I've got that scheduled to be installed on Wednesday, which gives the handyman a couple days leeway.

I've decided to go ahead and replace the cabinets in the kitchen and bathrooms. Using laminate cabinets (instead of oak), brings the cost down to $1,900 from $2,300. This price also includes new countertops. I decided to replace the cabinets instead of repainting them because the doors on almost all of them are warped and don't close right and some have warped bottoms due to water damage. I'm waiting to get an estimate faxed to me before giving the go ahead for this. I want to make sure everything is in writing. Last time I checked, I was told it would take about 2 weeks to get the parts in and installed, so this will probably be the last thing done before I put the place on the market. (The kitchen and baths are not carpeted, so the carpet can go in before the cabinets.) I just don't think I'll get above FMV without the new cabinets - I think they will really finish off the kitchen and that is one of the most important rooms in a house.

I was planning on having some cleaners come in and clean the place up, but I don't think there will be a need for it now. The walls have been painted, the carpet replaced, new appliances put in, and new counter tops and cabinets installed. What's left to clean? The A/C ducts, but I can do that. In fact, my handyman might have even done that when he took them down to paint.

I'm obviously way over my initial estimate of $2,500 to fix the place up, but I think the improvements I am making will more than pay for themselves when I sell, so I'm going for it.

Friday, March 25, 2005

House 4 Ended Up At The Foreclosure Auction

I was killing some time during lunch yesterday by poking around the MLS listings and came across a property I had bid on before: House 4 (here, here, and here). The foreclosure happened and this is now a HUD property listed at $58,500 (recently reduced). The listing agent says the as-is FMV is $65,000. There are still 5 units for sale in this complex of about 35 units. I'm glad I didn't buy here as it seems to take a while to sell. If anyone is interested, this condo is FHA Case #023-097638-HUD.

Wednesday, March 23, 2005

Appliances Are In

Today went much better than yesterday. When I arrived, I noticed all the trash that was out front had been picked up. One thing I did not mention in my last post was that yesterday I decided to hire a trash pick-up company instead of waiting for the city bulk collection. I made this decision because the line of trash stretched the length of the front yard and I didn't want it sitting out for up to a week (and rain was forecast, so I didn't want a big mess on my hands). So I called a company yesterday and tried to get them to come out. They told me they would work me in. I also gave them the lockbox code because the refrigerator was not moved outside and I needed them to haul it away. So, the question was, who picked up the trash? I never got a call from the trash company and they didn't have my billing info, so if they did get it, it was picked up for free. When I went into the house this morning, the refrigerator was still there, so it appears the city collection picked everything up. Well, it turns out they picked up everything except some cans of paint, which can't be thrown in the dump.

So I sat around waiting for the appliances to be delivered and talked a bit with the handyman, who was there working. About 10:30, I got a call from the trash pick-up company. They didn't make it yesterday, but were going to come by now. No problem! I told them the city picked up most the stuff, but I still had the refrigerator to get rid of. I had also loaded the cans of paint into my car to haul off somewhere, but they said they could take those too. A few minutes later, they showed up, took out the fridge, and unloaded the paint from my car. It only cost $100 (the basic refrigerator charge) rather than the $350 it would have if they had to haul away all the other stuff the city took.

I took a few pictures of the place while I was there.

Witness the power of this fully operational Death Star!

Family Room. The marks on the floor are dirt. You can also see the soot on the popcorn ceiling. This will be painted over.

Kitchen With Old Appliances. I should have gotten the dishwasher in this shot.

Kitchen With New Appliances.

Yesterday Was Mostly A Bust

I took the day off work to go out to the property and meet with two appliance installers. One was to deliver and install the new dishwasher and stove, the other, the new range hood. The range hood guy was supposed to show up between 8 and 11. I did not have a time for the other guys, despite calling three times the day before.

While I was at the house waiting, I figured, I'd do some cleanup. The trash was still out front, so the city collection hadn't been by yet. I brought some trash bags and spent about 1.5 hours hauling more garbage from the house to the front yard. I swear, with all the bottles of cleaning products the previous owners had in the house, you'd think they would have kept the place a bit cleaner! And they must have loved pickles, because the laundry room had about 15 one gallon glass jars and almost all of them had pickle labels on them. They were all empty too. Don't know why they were being saved, but I tossed them all. I also had to pull out an old recliner. I was a bit pissed that the handyman did not take the refrigerator to the curb, like I asked him to.

While I was doing all this, no less than three people stopped by in front of the house and dug through the trash and took stuff. The first was someone from the house across the street and they took an old stereo cabinet. The second was a guy who took all the scrap metal and aluminum he could find. The third, though, is the one that really baffles me. He took a couple old paintings and then some weird stuff - a half empty bottle of fabric softener, a half empty bottle of tile sealer. I don't know what else because, once I saw him take those things, I tried to avoid him.

I tried calling the dishwasher and stove people again and was told they weren't coming until tomorrow! They claim they received the dishwasher damaged and had to order a new one. They also claimed they called me three times yesterday to tell me and that they left a message. This is crap. I told them I was the one who called them three times. The number they have is a cell phone and my caller ID log shows they did not call, nor was there a voicemail from them. The stupid guy on the phone just said "all I know is that my computer tells me they tried to call you three times." Turns out, these people are the same jerks who screwed up the last dishwasher installation I had. I will never use Home Depot again. Anyway, they called later that day to tell me the installation will happen the following day (today) between 9 AM and 1 PM.

It got to be 10:30 and the range hood installer had not shown up yet, so I called him. He had me down for 2 PM to 6 PM. No no no. I told him he told me 8 to 11 AM and we hemmed and hawed for a bit. I finally asked him if I had to be there when he installed the thing and he said no, so I gave him the lockbox code and left.

He called me around 5:45 PM and told me he was there working and he got the thing installed. One thing I did wrong was I bought a ductless range hood (meaning the exhaust fans just blows back into the house through a filter instead of up a pipe to the roof). The last house I rehabbed was like this, so I didn't think about this one being different. No big deal. The hood can still be installed, it just won't vent to the roof.

As I was talking, the installer informed me he used to work for a bank fixing up foreclosed houses. He installs dishwashers, cabinets, lighting, and anything else needed to fix a house up for sale. So I asked him to give me a quote on replacing the cabinets in this house - something I wasn't going to do, but I thought I might see what it would cost, since he said he could do it for cheap, using good but cheap cabinets. I should get the quote today.

So, I only got 50% of what I wanted to get done accomplished and I have to go back again today. On the other hand, I have a potential new handyman and I spent the rest of the day setting up my Quickbooks file for this new LLC, something I have been putting off for a couple months.

I also forgot to bring a camera yesterday, but I have one today, so hopefully I can get some pics posted.

Monday, March 21, 2005

House 11 Update

Not much happened over the weekend. The handyman was supposed to start working. I haven't heard anything, so I'm assuming that's progressing fine. On Sunday, I stopped by Goodwill and picked up a chandelier to replace the one currently in the house. It cost $15, but I also donated some stuff to Goodwill, so I got a 20% off coupon, bringing my cost down to $12. And the chandelier even came with light bulbs, so no need to buy those! I'm taking tomorrow off work to go out there and drop it off and wait for the delivery and installation of the new dishwasher, stove, and range hood. I'll probably also bag up some of the trash and take it away just to have something to do while I wait.

The handyman claims he'll be done by Friday. Even if he's not, when it gets towards the end of the week, I'll have the carpet people go out and give me an estimate on replacing the carpet. This place is about 100 square feet bigger than my last property, and that cost $800 to recarpet. But I also did not replace the padding in that house. I may have to here, since it's so old. And after the handyman is done and the carpet has been laid, I'll get the cleaning people in there to clean it up. After that, I'll get it on the market.

I may have to delay things a bit. A family member is not doing well and I may have to leave the state for a funeral any day now.

Friday, March 18, 2005

House 7 Callback

Man, for a supposedly hot real estate market, I sure am getting a lot of callbacks on houses that haven't sold. Today, the agent for House 7 called me to tell me the price has been lowered to $49,900. This is an REO condo and my original offer was $39,700. I told the agent I couldn't go much higher than that and thanked him for his call. He claimed the bank had an appraisal done and it came back higher than the current listing price, but they didn't tell him what it did appraise for. I do believe the appraisal was higher, since my comps put it in the $55,000 range, but I don't believe he doesn't know what the actual figure was. This guy also said he didn't remember what my original offer was and this has to be a lie since the only way he would have had my phone number was if he still had my offer.

But I do take a small amount of joy in the fact that this place hasn't sold yet. My offer for this property had the honor of having the quickest rejection time so far - 1.25 hours. As I wrote at the time, I think there is someone at the bank thinking they are doing the bank a favor by holding out for top dollar. The defaulted loan on this was for only $25,000, so my offer would still allow them to make money. Now another month has gone by, the bank has had to pay another $120 in HOA fees, pay for an appraisal, pay another month of property taxes, and it still hasn't sold. Maybe next month, they'll drop the price again.

Thursday, March 17, 2005

House 11 Electrician Update

Just got a call from the electrician and he and his assistant (a journeyman electrician, actually) are at the house working now. He wanted to know if I wanted him to take down the ceiling fans and re-wire those. There is also a workshed on the side of the house and he wanted to know if I wanted those outlets replaced as well. I said yes to both. The workshed definitely needs it because he said he saw one outlet there that was burned out. He also has to pull out the appliances and change the wiring behind those. I informed him the appliances are being replaced and he can save himself some time and effort by not bothering to re-install them. He also commented that the outlets in the kitchen were filthy - they are caked with grease and dirt. He's found about 50% copper wiring and 50% aluminum wiring. The good news is that he thinks he can get everything done today.

House 8 Callback

Last night I got an interesting phone call from the listing agent for House 8. This was a house in Mesa that I figured had a FMV of $115,000- $120,000 and was listed for $117,500. It was going to foreclosure auction on March 18th. The agent told me they managed to get the auction date pushed back a week, but they are having difficulty selling it. They have had four different sales fall through because the buyers couldn't get funding. As a result, she was calling me because I was one of the first people to put in an offer and my offer was an all cash deal. She said the price was now $113,000 and the seller's couldn't go lower because of the penalty charges that have accumulated on the loan. I told her I appreciated the call, but I have already bought another house and did not have any funds available at this time. If anyone is interested in buying this and can close in a week, let me know and I'll pass on the details.

This is the first time someone has called me with a deal. Even though I couldn't do it, I like that a deal was brought to me instead of me looking for a deal. I hope this happens more often!

Wednesday, March 16, 2005

Handyman Costs and Trash

I just heard back from my handyman with an estimate - $1,800 plus material. (I'll need paint, a sink, and a roll of screen material plus some other miscellaneous stuff.) And he thinks he can get the work done by next Friday. Not bad.

I've been wondering what to do about the trash situation. There is a refrigerator and desk that need to be disposed of, plus other miscellaneous trash. I called around yesterday and a small roll-off dumpster will run about $350. I called a company that will haul away stuff and their price was about the same - mainly due to a $100 charge for the fridge. Since it has coolant, a hazardous material, in it, it cannot go to the city dump as-is and so they charge an extra fee for it. But the plus for these guys is you just pile everything up in the driveway and they will show up with the dumpster and load it up and haul it away.

One thing I have used before is the city's bulk collection service. Once a month, the city will come around and collect any large items. The drawbacks are the items have to be placed within 4 feet of the curb and the pick up day is not specified - they just come sometime during the week. The stuff needs to be set out by the weekend before. The plus is it is free (well, it's included in the city's monthly garbage collection bill). As it happens, next week is the pick up week for this month.

This is obviously the way to go, but I was having problems with the logistics. The city requires the door be taken off the fridge, so I'd need to do that. There is also, for some reason, a huge concrete bump in the driveway - it's about the size of a large, wide speed bump. This will make moving stuff to the curb difficult. In addition, since I need to have the stuff out the weekend before, I'd need to go there this weekend and put it out. My wife is busy this weekend and I was supposed to watch my 1 year old daughter. Hmm. Hard to do all this while keeping an eye on her.

Then my handyman called and said he was planning on starting to work on Friday. I told him about the pickup service and he said he'd move all the stuff out to the curb for me. Yay! Problem solved!

Tuesday, March 15, 2005

Going Over Work To Be Done

I met the handyman at the property this morning to go over what needs to be done. I've got a one and a half page list of stuff. I was pleased to see the previous owners are indeed moved out, although they still left a bunch of junk, including a key ring with about 20 keys on it. I hope he doesn't need any of them! There was some trash piled up in the front yard and I guess what happened was the trash can got full, so they piled some stuff there, and left more stuff inside. There's a computer desk to haul away, a bunch of little stuff in the storage sheds, and miscellaneous crap inside. They left the refrigerator, which I thought they were taking, and took the freezer, which I thought they were leaving. Oh well. I wasn't planning on keeping either one. So I need to get a dumpster over there when my handyman is there, so the stuff can be thrown out.

My handyman will be calling me back tonight with an estimate. He thinks he can start work on the place on Friday. I asked him about the dirt on the popcorn ceiling and, as we discovered, the popcorn was already painted over once, so we'll paint over it again. Dirt problem solved! In addition, I need to swing by Goodwill and pick up a chandelier to replace the Death Star that is hanging in the dining room now.

The plan is as follows: Thursday / Friday the electrician will be there working. Friday / Saturday the handyman will start his work. I expect he'll take 2 - 3 weeks, but we'll see what he says when he gives me his quote. Next Tuesday, new appliances are being delivered. After the handyman is done, I'll get new carpet installed. Once that is in, I'll have some people in to clean the place and then I'll list it. I still haven't decided if I will be using a Realtor or going the FSBO route yet.

Monday, March 14, 2005

A Visit To House 11

My wife and I went out to the house on Sunday. The sellers were supposed to be out by the end of the day Saturday, but they were still there, packing stuff up to move. I spoke with them and the guy was really nice. He's an older guy, maybe 60 or so, and he told me all about the house and the "improvements" he's made. He obviously has great pride in the house and I'm glad he was very friendly and not upset that he had to move out. They say they will be out for good on Monday (today). Almost all of the furniture was moved out and they were staying in a trailer parked in front of the house. The seller told me someone was coming to pull the trailer away Monday morning.

I made some measurements of the rooms (for carpet cost estimates) and walked around, making notes of what needs to be fixed and checking out the things mentioned in the inspection report. I know now I will be over my $2,500 budget for repairs. These people have lived in the house a long time and I don't think they ever replaced any appliances. The dishwasher and stove look like they were built sometime around the Pleistocene era. The garbage disposal is the size of an outboard motor. There was a refrigerator that I think is going to go with the sellers and a deep freeze freezer in the enclosed patio area that the guy said he would leave. He says it still works, but I'm going to get rid of it. The kitchen sink probably should be replaced as well, since there is some serious staining in it. The carpet will have to be replaced, not just cleaned. It's too old. Strangely enough, he had a modern computer and DSL.

A bit of good news is that the kitchen and two bathrooms had new flooring installed recently. I guess the seller's neighbor does that for a living, so he put it in for them.

The seller said he spoke with the inspector when he was out here and doesn't understand why the inspector said there was aluminum wiring. He claims the house has copper wiring. In fact, he has been in the Valley since 1959 and worked as an electrician who used to wire new homes. He believes he actually wired the tract of homes where this one is located. Anyway, the electrician I have coming out there Thursday will get to the bottom of this. Maybe the seller is right and there won't be a lot of wiring work that needs to be done. I could save some money. I'm not counting on it though..

There are two big storage sheds - one on the side of the house and one in the back. The house is on a corner lot, which is nice because it has a big side yard. The patio enclosure needs some new screening put up and the screen on the master bedroom window has a hole in it and needs to be re-screened as well.

The doors to the all the bedrooms will either need to be repainted or replaced. They are a natural wood color with what looks like a good coat of varnish. They really don't match the white walls at all. I don't know if paint will cover them well or not, so I might just replace them. The door handles need to be replaced too since they are all mismatched. The seller did buy a new front door, but he never installed it. He will leave it there for me.

There are working ceilings fans in all the rooms. The dining room has a horrendous 1960's style metal orb chandelier that looks like a welding school student's rendition of the Death Star. That needs to go. The A/C vents need to be cleaned. The family room has a "popcorn" acoustical ceiling and there are streaks of dirt on it from where the air blows out of the A/C vents. I don't know if that can be cleaned or not. The house has A/C and evap cooling. It also has two new attic fans to help keep the attic cool. The outside of the house has been recently painted, but the inside will need to have a new coat applied.

After we left the house, we went to lunch at a nearby restaurant. We passed a Home Depot on the way, so we stopped in and ordered a new stove, range hood, dishwasher, and garbage disposal to be delivered and installed on 3/22. That and the required new power cord and dishwasher install kit, plus delivery fees and installation charges, came to about $700 (less a $50 delivery charge rebate I have to mail in for). While I was there, I checked out prices of some other things I know I'll be needing. It seems $35 is the standard cost for just about everything! New door - $35! New stainless steel sink - $35. New kitchen faucet - $35. New range hood - $35. New screen door - $35. These are for pretty much the cheapest ones Home Depot sells, but still, new is new.

Today I need to contact my handyman and see what his schedule is. Before I do that, I need to write up a list of all the things I want him to do. That really helps in making sure everything gets done and that there are no surprise costs later.

Friday, March 11, 2005

House 11 Escrow Closed!

Escrow closed yesterday and I am now the official owner! The sellers have two days to move out, per our contract, and I will have the keys on Sunday. I'm still working with their agent to figure out the logistical details of me getting the keys, but that should be done today. There were a couple interesting things I had to sign for this escrow: The title company needed copies of the Articles of Incorporation of my LLC and then I had to sign a statement confirming the LLC was still in existence and had not been amended in any way. Then the listing agent needed me to sign some disclosures releasing them from liability for the condition of the property, that I elected not to purchase a home warranty, and that I waived my final walkthrough inspection. The nice part about this was that nothing I signed had to be notarized, so I never had to go in to the title company to sign anything. They had a courier bring stuff to my office, I signed it, and they had a courier come back and pick it up and return it to them. Sweet!

I called the electrician back and re-scheduled the appointment for next Thursday and Friday. I also called the electric company and city to get the power, water, sewer, and trash put into my name, effective Monday. Interestingly, the city needed the name of the escrow company and escrow number for this. On the plus side, they allowed me to put the service in the name of the LLC, since that is who is on the deed. With the electric company, if I did that, I would be required to pay a deposit since the LLC hasn't had service with them before.

On Sunday, I am planning on heading out to the property and going over it to make a list of all the fixes I need my handyman to make. I'll base this on the inspector's report and other cosmetic things I find. I'm also going to need to buy a dishwasher and garbage disposal and get those installed. If the store I buy them from offers free or cheap installation, I'll take it. Otherwise, I'll probably have my handyman install them. One thing I learned from my last property is to never have the appliances delivered and installed on a Saturday. If something goes wrong, as it did last time, there is no one to contact so the problem can be fixed that day because the main office will be closed. I'll save a lot of time and headache if I just take a couple hours off work and wait for them to show up on a weekday.

Budget-wise, I'm close to on track. I budgeted $750 for escrow fees for both the buying and selling of the property. The fees for buying only ran $222, so I've got more than half of that left for the selling costs. My repair costs may be a bit over the $2,500 I budgeted, mainly because of the electrical work that needs to be done. The estimate for that was $1,500, but that was just a guess. I'll have a definitive figure once the guy gets in there and starts working. That leaves $1,000 for my handyman and appliances. The dishwasher and garbage disposal will probably run about $300 total, leaving $700 for the handyman. This may be within reason, but I'm not sure. Again, once I get in there and make a list of what needs to be done, I'll have a better idea.

Wednesday, March 09, 2005

House 11 Closing Today?

Just got a call from the title company asking me to come in and sign the paperwork and bring my funds. The only thing they have given me so far to show my costs has "pre-audit" and "estimate" written all over it, so I asked for a final version so I wouldn't bring the wrong amount and have to make two trips. Apparently, this is an unusual request, since the woman I was speaking to was a bit flustered by it. She said they have the final figures after everything is signed. Since it's an all-cash sale with no home warranties, loans, etc., she says the odds are very tiny that my figures would change. The only changes would likely be on the seller's side. I told her the rest of my week is very busy (which it is - I'm getting two cavities filled tomorrow and I'm meeting with my CPA to go over my taxes on Friday), and I won't have time to make two trips to their office this week. She said none of the paperwork I have to sign needs to be notarized, so she is sending the stuff by courier today for me to sign. I'll go out at lunch to get the cashier's check and then call her, at which point she will send a courier back to pick up the docs and my check. And then we will be done!

The sellers are coming in today to sign their paperwork. Two days after we close, I get the keys, so this should work out good - if we can get this all done today, I should have the house by the weekend!

Monday, March 07, 2005

Realtor Messes Up

The electrician showed up at the property this morning at 7 AM to start working. The sellers had no knowledge he was coming and were on their way to work. As a result, we have to reschedule. This pisses me off because I spoke with the seller's agent twice last week - the last time was Friday afternoon - and told them about this. I was assured the sellers would be told, but apparently that didn't happen.

I did get to speak with the electrician though - Rocky is his name. I can't say I've ever met anyone named Rocky before. Anyway, I spoke with him briefly about aluminum wiring. If I want to replace all the outlets and pigtail the connections to use copper wires, it will be about a 2 day job and will run about $10/outlet for parts, plus labor. Based on the square footage of the house, he guesstimated the whole job would cost about $1,500. I think I will get this done. It's a safety issue and will help when it comes to selling the house, I think. This still leaves me $1,000 in my budget for other repairs. To save some money, I may end up just cleaning the carpet instead of replacing it.

So, I think I'm just going to wait until escrow closes and the sellers have moved out before having the electrician back. He said it'd be easier with all the furniture gone anyway. I just got off the phone with the escrow agent and they are still waiting for the title report to come back. He expects it today. If we get that today, we should be able to close tomorrow or Wednesday, the sellers will be out two days after that, and then I can get people working on the property full time.

Thursday, March 03, 2005

House 11 Exit Strategy

This is in response to a question in the comments on the previous entry - what is my exit strategy and how did I pick this property, given that I have investors in this.

The deal with my LLC is that I get 15% of the profits and the investors get the remaining amount. This is actually less than the 25% the manager of other LLCs that do similar things charge.

When I started looking for properties, I started with the standard rule of buying at <= 75% of fair market value. None of my offers were being accepted and I quickly realized that the Phoenix market is too hot right now for there to be many of those deals. I changed my strategy and started looking for properties that I could get for $20,000 or more under FMV. Those were more plentiful, but I still wasn't getting many. I had decided to lower my limit to about $10,000 plus repair and resale costs under FMV. In other words, I wanted properties where I could get at least $10,000 profit when all was said and done. House 11 I actually originally had at $25,000 under FMV, but then that damn second offer came in at the last minute and I had to raise my price by $8,000. Still, I'm getting the house at $17,000 under FMV. I think I can sell it a bit over FMV once I have it repaired (due to the hot market here), and, as I mentioned in a previous comment, I think I can make about $12,000 on this.

Note that I said "I can make..." In actuality, it's my investors and I making this amount. The fact that I have other investors doesn't really change how I approach deals.

I have just recently started thinking about another possibility to make some extra money on this deal: a seller carry-back. The house will be completely paid for, so when I sell, I might be able to offer seller financing for all or part of the purchase price. Of course, I don't want to carry a 30 mortgage note, even though it would provide good cash flow. The purpose of my LLC is to flip houses, not create monthly cashflows. But, if I simultaneously sell the house with seller financing and then sell that note at closing to another investor, I might be able to get some extra money out of this.

This is due to the time value of money. If I carry a 30 year mortgage for $150,000 at 7% interest, that note is worth more than $150,000 today because the buyer would get interest payments for 30 years. I need to do a lot more research into this, but it's something worth checking out.

House 11 Picture

House 11

Aluminum Wiring and Waiting For Title Report

Yesterday I was faxed my copy of the receipt for the my earnest money deposit. I just spoke with the title company this morning and they are still waiting for the title report to come back. It was ordered Friday and they say they are taking about 5 days to process, so it should be here soon. Once that is in, if the title is clean, we are free to close. They are also going to fax me a list of my charges today so I know exactly how much money I need to bring to the table.

As I mentioned earlier, the property is old and has aluminum wiring. Back in the late 60s and early 70s, the price of copper rose quite high and houses were built using aluminum wiring to save money. But aluminum has since been found to have some problems - namely, it is more susceptible to thermal expansion and contraction than copper. What this means is, as the wires heat and cool, they tend to come loose from their connections, which of course, creates a fire hazard. There are several options to dealing with this. From what I've read, there are pigtail connectors that can be installed at all outlets and switches to transition from aluminum to copper wiring before connecting to the switch or outlet. Aluminum wiring also presents some corrosion issues where it is joined to other metals (like at the grounding point), so antioxidant paste needs to be used. I've got a licensed electrician scheduled to work on the property Monday morning and I expect him to spend most of the day working on this place. His rate is $58/hour plus parts.

I'm going to try to post a picture of the property here. Right now, the only one I have is the shot from the MLS listing.

I am also having a second phone line installed in my home today. This will be a dedicated fax line. Right now, I am using my work fax number. This is actually pretty nice since our system converts all incoming faxes to PDF files and emails them, but I obviously can't continue using this forever. I'm currently looking for some fax software for a home PC that can do the same thing. If anyone knows of any, please let me know.

Tuesday, March 01, 2005

House 11 Inspection Reports In

The property was inspected yesterday and I received the reports today. No termites were found, although there were a couple places where wood siding was touching the ground, which is conducive to termites. I'll get that cleared away.

The house itself has what I consider to be standard repair issues with a 34 year old house:

  • Loose bricks in block fence
  • Windows and doors need to be sealed
  • Some wall shifting / displacement is evident
  • Aluminum wiring (instead of copper - typical for the year the house was built)
  • Outlets at kitchen, bathroom, and outside are not GFCI outlets
There are some other issues which are basic maintenance issues:
  • Dishwasher racks are rusty
  • Kitchen faucet leaks
  • Bathroom faucet leaks
  • Garbage disposal noisy and vibrating
There are also signs that seem to show the owners were do-it-yourself type people:
  • A workshop / shed was added and the sink in it uses pipes that are too small and don't have supply values
  • The plumbing vent in the workshop doesn't extend to the exterior and vents into the room
  • Ceiling fans are installed below 7 foot blade height
There was signs of water damage in the attic, but the SPDS (seller property disclosure statement) states there was hail damage to the roof. This was repaired by the seller's insurance in May, 2003 and I am receiving proof that this was done - including the cost, the company that repaired it, etc. I'm glad this was professionally repaired and not done by the homeowner. I requested this information not so much for myself, but for the person I sell the house to. I know their inspection will note the water damage and I want to be able to provide concrete proof of what caused it and that it was repaired.

There were also various other miscellaneous items, but when all is said and done, it's not in horribly bad shape. I'll probably replace the dishwasher and garbage disposal. All in all, it looks like I'm set to close escrow! My insurance coverage on the property doesn't start until Friday, so that's the earliest I can close. I called the escrow agent to get an update but he was away from his desk and I had to leave voicemail.

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