Old Neighbor in Preforeclosure

This is interesting! Last night, I was going through some preforeclosure listings and came across an address that seemed very familiar: it is across the street and about 2 or 3 houses down from the house I used to live in about 2 years ago! I never met the guy living there, but I know the neighborhood and the houses and they are both pretty nice.

From what I can tell, this property is not yet listed in the MLS, so the owner may not have an agent yet. I'm going to send him a letter today and hopefully, if he does decide to sell, I can do it without an agent, thus saving him some money on commissions (which, of course, means I don't have to pay as much).

I did some research on him this morning and it looks like it's the second mortgage that is foreclosing. He bought the property as a new home from the builder in 1995 and refinanced once in 1997. The home owner's association also filed a lien against the property in 2004 for about $2,000 in unpaid fees and took him to court to get that paid in 2005. The civil judgment hasn't been released yet, meaning he still owes them. With late fees and court fees, the amount is now around $2,800.

So my letter will emphasize that I used to be his neighbor, that I can buy his house quickly if he wants to sell it, and that he can save some big bucks on commissions by dealing with me. If I don't hear anything back in a week or two, I'll send a follow up letter. I sure hope the closing on the house I am selling now goes smoothly. It's scheduled to close on 9/16. If all goes well with this guy, I may need my cash by then!

Buyer's Inspection Notice

On Friday afternoon, I received the Buyer's Inspection Notice. They had the property inspected and this notice is a list of things they'd like me to fix. I went out to the property Sunday to verify the items and to meet with my handyman and go over which ones I am willing to fix. Here's the list with my responses:

• Fascia boards and trim have wood rot / deterioration on northwest corner of patio cover. I will fix this. There is about a 6 inch section of wood at the corner that has some wood rot. You can tell the bottom half of the piece of wood was replaced previously. It looks like whoever did the work previously didn't get all the rot.
• Electric panel cover missing blanks. I will fix this. This showed up on the inspection I had performed when I bought the house. I had mentioned to the electricians I hired that I wanted this fixed, but I guess they forgot. This isn't a big deal. Basically it looks like two circuits were moved in the electrical box and the blanks that cover the old breaker locations were not installed.
• Screen door at main entry needs repair / replacement. I will fix this. The inside handle is missing.
  
• Laundry drain pipe vent needs to be installed up through the roof to the outside. I will fix this. The laundry room of this property is attached to the enclosed patio and the vent pipe extends up to the ceiling and stops, so it vents into the room. I made things a bit easy here for my handyman because the range vent hood I bought was a non-venting model. The old one vented to the roof. Since the laundry room is on the other side of the kitchen wall, we're going to extend the laundry vent pipe in the attic and join it to the old range vent pipe, which is not being used anymore. My handyman won't need to cut any new holes in the roof this way. This item also showed up on my inspection.
• Closet door guides in the guest bedrooms are missing. The closet door in one of the bedrooms needs to be adjusted. I'll fix this.
• One of the guest bedrooms has a broken window. When I looked at this, the crack is a little 1.5 inch semicircular crack that runs from one edge, out a tiny bit into the window, then back to the edge. I was going to not fix this because it's such a tiny crack, but my handyman tells me replacing the window isn't difficult and the glass should only cost about $20, so I'll fix this as well.
• Ceiling fans and lights in master bedroom and one guest bedroom do not work. I know these work because I checked them when I bought the house. The problem with the one in the guest bedroom was that the fan direction switch was in-between positions. I pushed it all the way up and it worked. Issue solved! The one in the master bedroom however, doesn't work. I know this one worked before and, when I had the electrician pigtail all the aluminum wiring, I had him do the fans as well. His work order shows he did this fan and that he tested it afterwards. I checked the circuit breaker and that was ok, so I have no idea why this fan decided to stop working. My handyman will check it out and, if necessary, replace the fan with a cheap one.
• Drain leak at kitchen sink. I don't see it. I filled both sides of the sink with water and let them drain simultaneously. No leak. I let the water run for a while on both sides and saw no leak. The only thing I can think of is that, if you feel the bottom of the cabinet, there is a spot under the drain pipe that feels like there might have been water there once, but I imagine that happened during the installation of the cabinets and sink. So I just tightened all the plumbing joints and reported the leak was fixed.
• Exhaust fan from hall bathroom terminates in attic instead of outside. This is something else that showed up on my inspection and I had asked my handyman to fix it earlier, which apparently, he didn't do. The attic entrance is actually in that bathroom, right next to the fan, so all I had to do was open the hatch and I could see the vent hose not going anywhere. There is a vent in the attic wall right next to it. I suggested to my handyman that he might be able to route the vent hose to that, thus avoiding the need to put a hole in the roof. He said he'd check to make sure that was ok code-wise before doing it. Anyway, this is another item I will fix.
• Interior water pressure is low and both bathrooms. I will not fix this. Truthfully, the water pressure seems fine to me.
• Main entryway security light not working. Fixed this. Just needed to replace the lightbulb.
• Master bedroom door strike plate needs adjusting. The door doesn't latch closed unless you push hard. What a ticky-tack thing. I'll fix this.
• Caulking needed around shower enclosures. I'll fix this. The caulking has some gaps in it in both bathrooms where the drywall meets the shower enclosure.
  

All in all, it's not a bad list of problems and three I was able to fix on the spot. My handyman tells me it's about a day's work, which is what I figured, but experience tells me it will probably take him 3 days to finish. He will start working tomorrow. I expect most things will be pretty inexpensive. The biggest expense might be if he can't use the wall vent in the attic and needs to extend the bathroom fan exhaust through the roof.

I sent my response to the buyer's list to my agent. She's typing it up on the correct form for my signature and then we will fax it back to the buyer for his approval. Tomorrow is the end of his inspection period and the point at which his deposit becomes non-refundable.

Article On Why RE Agents Aren't Getting Rich

There's a good article on Slate.com about why real estate agents aren't getting rich from the current housing boom. I love the last line :-)

Building My Company's Credit part 2

Following some of the advice from the site in Steve's comment, I went to Dun and Bradstreet to request a D&B number. They have a section where you can check to see if you already have one because 1 out of 2 companies requesting a number already do. It turns out, my company does! So I requested it online. A short while later, I got an email saying they couldn't email me anything because the information I provided didn't match what they had in their records, and to call in. So I called and gave them my company's name and they found me. They asked for some additional information to complete their profile and then they told me my number. Based on their questions, I think my company has a plus - because my largest investor is a woman and she owns at least 51% of the company, I qualify as a "woman-owned business." That will probably help obtaining loans down the road.

If you do call in, watch out for the upsell. (Watch for it on their website too.) All you need is a D&B number. They will try to sell you a whole credit building package. The one on the website is $499 and the one they pitched on the phone was $799. For the purposes of building business credit, you really don't need these (from what I've read).

Building My Company's Credit

I'd like to get to the point where my company can apply for bank loans and other financial instruments without a personal guarantee from me, but few banks will lend to a company without some legal recourse against a person should the business fail. To show the business is solid, it needs to have a good credit history. Today, I took the first step towards establishing that credit history.

I received an application in the mail from Chase Bank for a business credit card. Normally, I throw these in the trash, but this one caught my eye because it offers a cashback bonus. You earn 3% cashback on purchases at gas stations, restaurants, office supply stores, and home improvement and hardware stores. All other purchases earn 1% back. Based on what I have read on other personal finance blogs like Savvy Saver and Personal Finance For The New Age, this sounds like a pretty good deal. There is no annual fee and all charges for the first year are at 0% interest. After that however, the interest rates are killer. They offer the program at three different levels: The Elite level gives you a 8.99% rate. The other two levels (I forget what they are called) give you a 13.99% and a 20.99% rate. Of course, they don't tell you what level you will qualify for until after you apply. But reading the fine print discloses some additional gotchas: They can change the program at any time. They can change the interest rate at any time. They can changed fix interest rates to variable or variable to fixed at any time. And, the killer, the interest rate will NEVER go lower than 8.49%, 13.49%, or 20.49%, depending on what level you qualify for.

I would never get a card with terms like this for my personal use. In fact, I probably wouldn't even get this card for a business. However, I am lucky in that my house flipping business is basically a cash business. I have my investor's money to use for all expenditures and therefore, I never need to carry a balance on a credit card. So now I'll use this card to buy all the appliances and materials needed for rehabbing a home, collect the 3% cashback bonus, and then pay off the bill in full each month.

FYI, I couldn't find this offer on Chase's website anywhere, so it might not be offered online.