After being at a picnic with some fellow investors last night, I decided to look into something I heard.  Another investor told me that Fannie Mae/Freddie Mac were putting a new constraint on investors borrowing – a new limit of just four loans (used to be ten).  Whaaaaat?????

Yes, it appears to be true. It seems that Fannie Mae, as one of its last acts, decided rewrite its lending guidelines for investment and second home properties.  Not only will we be subject to a limit of four loans, we will now pay a nice little mandatory mortgage fee to get one of their loans.

Granted, I can put my loan in my LLC’s name and it won’t count towards one of my four.  But have you tried that lately?  Just try to find a lender willing to do that lately.  Let me know if you have been lucky enough to find a lender still willing to allow me to put the loan in my LLC’s name – one that doesn’t want my first born in exchange for that anyway…

Want more info on how this buyout will effect you as an investor?  Check it out at Dan Green’s site: http://www.themortgagereports.com/2008/09/fannie-maes-las.html

Well, I certainly hope we’re rounding third and heading for home.  Target list date is next Thursday.  I have about a day’s work of handyman type items and I am having a TERRIBLE time finding someone to complete them. 

I seem to have acquired two groups of handyman types – those who are too busy to get to me on short notice (the good guys always have work!) and those who I will not call unless I can be there to babysit.  I thought I had run through all of my group A guys but lucked out at the end of the list. 

My plumber has “plumbing and remodeling” in his business name so I thought I would ask him if he knows anyone who could help me out on short notice.  It turns out that he is available for a day’s worth of work on Monday and we have come to terms on a rate that I am happy with.  I am going to pay him by the hour – a bit more than I usually pay but I am thrilled to get the job done.  Holding the house off the market for another week will certainly cost me more than the extra bit I am going to pay him.  Good deal all around!

We have decided that our next job should really involve a GC to oversee some of the projects.  I have put together a great team of specifically skilled guys.  I have a great window guy, a fabulous roofer, an electrician I am fond of (and another I would love to start using), a heat and air guy, a detailed painter, and a very nice carpet and vinyl guy.  What I really need is someone who can make sure those guys get their jobs done properly and in conjunction with one another.  And then I need the GC to get the handyman type stuff done and done well.  I am hoping my new plumber/handyman may eventually be willing to talk to me about being a GC on our next project.  We’ll see where that goes…

The last week or so is always the worst.  I am just plain tired of being over there.  I should be done by now.  That seems to be my theme song for rehabbing.   Anyone care to make it into a song?  I would record it. Once I go over my “time budget”, I get disgusted and aggravated.  Today I am not going over at all and hope to recharge. 

I went on a college visit with my daughter on Friday.  I told all of my contractors that I would be gone.  I stopped by the house that morning for a bit.  The only worker there was the electrician (and he was supposed to be done days ago).  Now, normally that would not be such a big deal BUT all of my guys were under strict instruction to be done on Friday because the living room floor was being refinised on Saturday.

Needless to say, nothing is done and it sure does not appear that any of my crews showed up on Friday.  We stopped by the house on Friday to show it to some friends only to find that the living room floor was covered with all of the various contractor’s stuff.  We all moved THEIR crap into other rooms so that the hardwood refinishing team could actually get their work DONE on time.

What makes it worse… the hardwood refinisher called this morning to say that they lost power and had to flip the breaker… on the new electrical panel…. that I paid too much for.

Aggravating!  I just wish these contractor dudes would do their jobs!  Another verse for the rehabber song!

Tomorrow I will be going over to take a peek at the hardwood.

Monday – normally not a great day.  Mine was productive.  I started off with a trip to Lowe’s to pick up a few things.  Shortly after I arrived at the rehab house, the plumber drove up.  I am working with a new plumber this time.  I used to work with a great guy who is a plumber but he could not pull permits.  After paying out the nose to his “buddy” to pull permits for us, I have moved on.  My new plumber is someone we go to church with and I know his family.  It’s nice to know I am helping to support the business of someone who is a nice family man.

So, the plumbing is underway.  We did pull a plumbing permit.  The hot water heater needs some tinkering and improvement, I have a number of sinks installs, a toilet, etc. 

I LOVE the way the upstairs bath is coming together.  The wall color really looks great with the white floor tile (was already in place) and the white toilet, black vanity, “brushed nickel” accents.  Very chic.  I love it!

My painter actually showed up today too.  It was a good day!  He’s another new team member. My painter took a full time (non-painting) job.  My new guy did some great work today.  Dare I say he may be even better than the old guy???  Well, I think I’ll hold off in my hopes until he actually shows up again tomorrow!

I returned loads of items that we didn’t end up needing to Lowe’s.  It’s much better to get a credit for a change.  Now I need to get someone out to haul off all of the stuff we have been tossing out back so I can get started fixing up the back yard.

I am getting to the stage that I need to start fluffing it up.  My painter will arrive next week so I am choosing paint colors.  I usually go with my standard Sherwin Williams colors (kilim beige for beds and hall, a green/khaki for the living room, and a match for Olympic brand “Belgian Waffle” for the kitchen). However, my new painter uses Porter and gets a great price so I stopped by the Porter store here and picked up some paint cards.  I like my colors and get compliments on them so I am sticking with what works.   I am going a bit off plan and painting the bath “Cake Stand” from Martha Stewart, a nice icy and modern blue.  The vanity is “espresso” (black to you and me) and the rest is all a crisp white.  I am anxious to see how it turns out.  It looks great in my head!

I am off to ProSource today to see what kind of carpet they have in my price range.  I have been there a few times but have never ended up buying from there.  Someone told me he got a nice beige plush for 41cents a square foot so I am going to see if I can get that price.  My installer recently moved so I am trying out a new guy.

I put a few plants in the ground yesterday to get the yard into shape.  It really doesn’t need too much.  A previous owner built a nice stone wall all along the front and one side so I have some nice, defined planting areas.  I put some zebra grass down the side.  For $13 each at Home Depot, they look great and fill a lot of space.  It’s the first time I have tried the “landscaping grass” and I must say that it looks pretty nice.  I moved a few hostas and dug up a rose bush.  In went a few holly variety of bushes and it is shaping up nicely.  The back yard needs a lot of attention but I have to wait until we get a dumpster out there to get rid of some trash first.  We never really do a whole heck of a lot in the back because people just don’t seem to care really.  This one, however, has a killer back yard that backs into green space so it is part of the “wow” factor and will receive a few planting areas.

I have been knee deep in rehab!  We have, of course, closed on the house (Friday, July 18).  My roofer and his crew showed up that Monday and knocked the roof right out.  They were amazing.  They work hard and fast and I have yet to be disappointed with their work.  The worse part is picking the shingle color from that little sample!  I decided to go with “Weathered Wood” which (from the sample) appeared to be a lighter gray with some beige tint here and there.  Well, on the roof it looks like dark gray.  It still looks great – just not quite what I was expecting.  We always put on architectural shingles since they really cost next to nothing extra and make the roof look expensive.  We also replaced the skylight which goes into the kitchen.  All in all, it turned out quite well.

Our next project was rehabbing the deck.  If you remember, there was a screened in porch on the back of the house and a hot tub was built into the deck.  The hot tub came out and the screens came off.  Once the screens were off the front of the porch, it became apparent that the screens would not be going back up.  It looked soooo much better being open.  It might lose some practical appeal (losing the screened in aspect) but it really gains alot of visual appeal.  And we all know how important that is when you’re selling a house!  The deck repair is now done.  It took much longer than expected actually.  I think I wore my handyman out on that one! 

The electrician tested the panel box and found that we are way overloaded.  So a new service panel is going in over the next few days.  Not in the budget – that one hurts!  I budgeted for electrical but not for an entire new service.  I think the cost of new service is going to go into every “iffy” looking house budget from now on.

My plumbing is also coming in on the high side.  My hot water heater is relatively new but the vent is too large.  Duke wouldn’t light the pilot due to improper vent size.  That one surprised me.  So we’re pulling the permit over the next day or so and the plumbing will get started soon.  It’s relatively minor – or so we hope!  I have a standing shower in the basement that may need to be replaced.   That one scares me as it is a big unknown once that shower surround comes out!

Painter gets started on Monday so we are trying to get it all in order and ready for that process by Monday.  Flooring goes in late next week.  If it all goes to plan, we will be done with this rehab in 21 days!

Lesson of the day: there is no such thing as “it just needs cosmetics”!

We officially closed on Friday!  Yay!  Over the weekend, we got into the house and got to work.  I refined our scope of work yet again.  Every time I go through I find new things to do.  I took our list of the things we need to do, broken down by room, and went through it again to see if we had failed to list anything.  I found a few things and came home and corrected them.  I now have what I think are some pretty good scopes.

The carpet came out this weekend and I am thrilled to find that the floors are pretty decent underneath.  There is hardwood upstairs in the bedrooms but we are going to carpet up there.  I prefer carpet in the bedroom and have actually quizzed lots of folks about that.  Most people prefer carpet in the bedroom so that’s what we’re going with.

The hot tub came out… with a Sawzall.  My wonderful husband surprised me by doing that today.  I am thrilled to see it gone.  Some girls like flowers – what can I say?  The deck doesn’t look too bad.  There’s a big hole in it of course but that can be fixed.  Glen, my handyman extraordinaire, will arrive tomorrow to get started on that.

Tomorrow I am meeting with my electrician and hope to meet a new plumber tomorrow.  The roof should begin tomorrow. 

Tomorrow’s schedule includes: meeting with the electrician to go over the scope, getting the roofers going, calling the plumber out for a bid, getting the deck demo going with Glen, out to Lowe’s to buy decking materials.  I also need to call Kirk, the fireplace guy, to schedule the chimney sweep and work.  My carpet guy moved so I am going to have a new guy come out this week to measure and see what I think of him.

Tuesday I will head to Lowe’s to buy what will, undoubtably, seem like half the store.  I like to go to Lowe’s over HD.  There are things I like better at HD (faucets mostly) but I have found myself at Lowe’s more and more.  I definitely prefer Lowe’s for lighting and bath vanity type products.  I am sure I will hit both stores before the week though. 

I know that I need to get to the point that I am not the one running to the hardware store.  I have found, however, that each house is unique and will need something that the last one just didn’t need and I need to go to the hardware store to shop.  So, that’s where I am still.  I really do not like going to Lowe’s… truly.  But I do like to control the finished look and I can’t give it up just yet…

The scope is a work in progress.  A few days ago, I took our first draft over to the house and went over it again.  We missed a few things and I clarified a few items.  So now we’ll put it back into the spreadsheet and print it out again.  I would like to go through the house once more with it and see if we have hit everything.  I will feel good about it then.

After I go over it once more, I would like to review the chapter in Flip, the Book that goes over the order and progression of tasks.  I love that book.  Talk about some guys who are way organized!  It’s a great way of looking at the entire project, breaking it down into managable pieces. 

I decided early on in the project that I was going to try to do this one “by the book” (Flip that is).  I would like to see how the author’s system works out and if I can modify it into something I can use over and over.  I started this project going through the book and doing each aspect of comps and comparisons in the neighborhood.  Unfortunately, I have kind of gotten caught up in getting tasks done and have strayed from the patterns set out in the book.  I need to get back into it.

Another goal of mine is to read on a business practice each day.  So tomorrow’s reading should be in Flip!

Onto another subject – I have the closing scheduled for Friday at 10am.  I finally got the closing agent to understand what was going on with the IRA lender.  I met my hardwood guy today to take a look at the flooring.  I am meeting the electrician on Friday for a bid.  Trash and electric services have been ordered.  I picked out the shingles today and the roofer gets started on Monday.  So, we’re moving right along.

Scope coming very soon!

We have not officially closed on the house I am writing about yet.  I got an email from the title agency’s processor today asking me all kinds of odd questions – am I purchasing this house or is it an investment?Who should go on the title, the LLC or the IRA Holder?

I am borrowing the funds from a private lender who is using funds from his self-directed IRA.  The paperwork for the IRA distribution has been completed and processed and the money was wired to the title company already.  This, evidentally, is freaking her (the processor) out because she can’t figure out how this is all working.  Who is the money coming from and why isn’t it coming from the LLC???

The processor called me to tell me that the IRA holder will have to pay a penalty since he is withdrawing funds early.  Wrong!  After I explained the whole self-directed IRA business, she proceeds to say that the title must then go in the name of the IRA since that’s where it’s being funded.  Wrong again.  I explained to her that the funds are basically being loaned to the LLC and that the house is the collateral.  I thought that would make it simple enough.  Evidentally not.  She can’t wrap her brain around it.  The attorney in the office is going to review it.

Why does the title company really care where the money came from?  I just don’t get it.  They were wired funds earmarked for this house.  I told them I will be bringing a mortgage to the closing and that I want them to record it (warning that they should put the charge on the HUD).  Why is that so hard to understand?  Why in the world is it necessary for the processor to know how this IRA money is funding the deal? They have the funds and the IRA holder ok’s and initiated the money transfer. How aggravating!

The house has a shabby covered deck on the back and it has a built in hot tub.  My teenage daughter was thrilled to hear that.  Little did she know that a “free” hot tub is never free.  Just ask my neighbors.  Anyway, the tub looks like it has seen much better days. 

One thing I have learned in cleaning out junkers is to never underestimate the value of an item.  Our first rehab had a refrigerator in the kitchen that could have been donated to science.  It was really bad (and yes we did open it on our first tour – big mistake!).  Would you believe that we put that old nasty thing out on the street with a “free” sign and it was gone within 30 minutes?!  One man’s trash…  So, I decided to check out Craigslist to see if I might be able to actually get someone to come haul off the hot tub for free. 

I was surprised to find there were multiple ads for people wanting a free hot tub.  Three out of three people returned my emails.  Now if I can just get my direct mail marketing to return that kind of result!

I went over to the house to snap some pictures to email to my new best friends and hit a snag.  The hot tub probably isn’t coming out all in one piece if we want to keep the decking in some kind of repairable state.  The hot tub is built into the deck and is quite large.  Superman will have to get into the covered porch area and lift the thing out of its hole.  We will then have to take off one entire side of the screened porch to get it out.  And did I mention the deck is about 4′ off the ground and currently has very few steps left?  I think my new best friend will be a Sawzall.

Does anyone happen to know a repairman or maybe a pool guy who would be willing to come out and tell me if there’s any hope in repairing the hot tub?