As you, my readers, know, I work in real estate. Part of being involved in residential real estate sales is having access to the MLS, the multiple listing service. And it is a wonderful service, an online list of properties for sale, sold, and in other various states. It has more information than the tax service, and it includes new listings and lots of interesting valuation tools, like RPR, which is sort of like Zillow for realtors but better.
I know many of us spend the evenings watching TV, hanging out in the family room visiting with family and such. One thing I do from time to time (well okay lots more than that) is, while watching old re-runs of Deep Space 9 or Have Gun Will Travel, I have the MLS open on my laptop and am trolling for something interesting to buy or to show one of my investor clients. I don’t wait around for a search to send stuff to me (I do have lots of searches set up) but I get bored and try to find new and interesting ways to look for properties. Mis-spelled words, other agents who have made an error in posting a listing, properties that have been pending for a REALLY long time – lots of interesting ways to search.
A few years ago in the late spring, just before Memorial day, I found an interesting property that was bank owned, and had been on the market for some time. So I wrote a really low offer that was cash and the earnest money was the full amount of the purchase. Yep, got their attention – I didn’t get the price I offered, but it wasn’t far from it, either. Closed on the house, did some fast rehab and staged it, and sold it, all in less than a month for a very nice gain.
But about a year ago, there just wasn’t that much stuff on the market. I had sold a property and needed to re-invest the proceeds quickly (it was a Starker, or 1031 tax free exchange.) So I was looking not just in the MLS, but in several other places, including the foreclosure auction.
There are a bunch of good folks who operate bidding services, and I use one of them for my occasional auction purchase. Now, when you buy at auction, you usually only know if the property is going to sell late the day before the auction. And I was bidding (low) on a half dozen properties each day, and finally got one. Of course, I wasn’t driving to see them and so the purchase was sight unseen. I bid low enough that I was sure it would work out alright.
And it did, but as usual, there was quite the education process involved. I closed on the property, and then went to see what I had. (Yeah, I know, I probably should have looked at it first but it was REALLY cheap…)
What I found was actually a pretty decent house on a nice lot. The electric panel was missing, and it was… rough. So I called my contractor to come take a look, pull a permit, and get going. My first sign of trouble was that the zoning people refused to let my contractor pull a permit because… he was not licensed in that city (yes, it is in the valley, and yes, he has a Phoenix license…)
So he got a license (another $30 or something) and THEN they tell him they won’t give him a permit because… well, because there are “issues”. So I go to the zoning people to determine what these issues are. The home was built in the 1930s and when it was built, another home was also built on the adjacent lot. Their home was partly on my lot and my driveway was partly on their lot. So I had to move the lot line. Which involves dealing with planning and zoning (mostly just write them a big check) and getting drawings done by a surveyor.
Originally the same people had owned both lots, and in the 1930s no one really cared what you built or where it was, apparently. But we got it fixed. The issue was then, that once I had approved re-zoning plans, I needed the signature of the lot owner next door. They were nice folks, but the actual owner had dementia, was in the hospital, and was not expected to live long, and no one had a power of attorney. So… I got signatures from all the potential heirs. I don’t know if it was legal, but the city accepted it and the town council approved my rezoning request.
Then they finally let us pull the permit, and we did all the work. When I went to get the final inspection, the inspector came out and said “They were supposed to tear this house down. I can’t sign anything.” Well that was exciting.
Ultimately, though, the work was approved and we got a final inspection acceptance and a year later, the house is rented. Sure, it was lots of work, and I have probably a thousand miles on my car driving back and forth to the property and the city, but the rental cap rate is about 16%.
Yeah, it was worth it.
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