Friday, October 24, 2008

If You Love This Blog You Need To Do This .....

You need to go over to Dogs and Jen and post a big thank you in her comments because she IS the savior of these sites! I don't know what kind of other magic she is into but she sure knows how to handle a guys files! I understand the whole process took minutes to complete whereas I would have spent countless hours trying to achieve the same result.

For those who don't know, America Online is dumping "Hometown" which is its FTP space provider. I had to move 7 years worth of web page entries and photgraphs. All the pages that make up "The entire Crack House Story" and my website were scheduled to be terminated on October 31st even though I have paid AOL thousands of $$$ over the last 13 years. So you may find a few dead links or a couple of pictures missing from this blog in November. I have to go through all my entries, and there are over 470, to find and edit the links to the old host. The new hosting service is managed by a gentleman who lives two blocks away who is doing it for all the free publicity that I can give him! Just as soon as I get a banner ad or a button from him, I will add it to this blog but here is the link anyway.

So, what good will come of this? Well, I can dump my dial up service now since I"m losing the web hosting capability with AOL and get high speed internet! Whoo hoo!!! Travelling at the speed of light, Baby!

Thursday, October 23, 2008

More Polished Concrete

A little over two weeks ago when I had to fight with the tax appraisel folks I took this picture of our unfinished hearth in the main bathroom. Complete with water puddle on the floor from our leaky roof.

As of last night it looks like this.

Here is a close up for all you polished concrete sceptics.

This was poured in place and glass was pressed into the surface. The fact that it was poured in place and trowelled means the surface is slightly uneven. It is level but uneven. Most of the surface area is going to be covered with a mantle and a pellet stove insert. I curved the front to make it more interesting otherwise it would have been too square for the room.

I noticed our tax evaluation hasn't been adjusted yet to reflect the market as I was assured it would be. Gasoline is way down, copper is way down, natural gas is down and our house value is still double what it was a year ago.

Friday, October 17, 2008

My Big Boy is Finished!

It only took about 6 real days of work, something like 320 bricks. 8 sacks of mortar, 12 gallons of water, two chimney liner tiles and 14 bags of vermiculite for a total weight 2400 lbs. of stuff that I had to haul up three flights of stairs and 13 feet up a ladder through a small opening onto the roof!

Now after some five years or so it is time to get all those old crumbling bricks from the original chimney down to ground level. I can think of one easy way to make that happen!

Tuesday, October 14, 2008

Politically Incorrect for Columbus Day

We just participated in another 17Th century re-enactment event. This one is local. We have the Sunwatch Indian Village here in Dayton. It is a 11Th century archaeological site that has several reconstructed huts. It is a cool site and a great place to host this type of event. We put on a trade scenario and a couple of ambushes circa 1680. At this time the natives won many of the encounters because matchlocks were the affordable weapon of the day and plug bayonets were not a common thing. None of our scenarios were scripted so we went with the mood of the day. Both trade scenarios went bad for the English trading party. I got jumped twice. I did manage to survive one of the ambushes though. The worst thing is my daughter has been influenced by the natives into thinking that I am one of the bad guys!

She was an active particpant in the trade scenario on Sunday. She even learned to shoot arrows and fire off my musket. The cool thing is not many 5 year olds get to experience history this way. The things she will do to run around barefoot in a leather skirt!

Land Contract vs. Rent to Own

You may have heard of these two terms in the past but not understood them fully. They are both forms of owner financing a real estate sale. You can Google both terms to find out more information than I will provide here because I'm not a real estate agent or a whiz at financing. Just someone who is aware of numerous ways to creatively finance a home sale.
Rent to own means just that. You set a price value on a house with a prospective tenant interested in ownership but lacking the credit or large down payment needed to buy a house at the present time. You get a down payment which is basically a right to exercise an option to buy a house at a pre-determined price for a period of 1 to 2 years. The option amount and a portion of the rent paid is applied to the purchase price if the option is exercised and becomes equity for the buyer. Real estate taxes are not required to be brought current until the house is sold under the option. This type of arrangement makes code enforcement, tax liability and maintenance the responsibility of the seller for the rental period. The seller also has the right to sell the property to another who will uphold the rent-to-own contract or increase the sale price of the house at the end of the option period.
A Land Contract is a sale of the property but a withholding of the deed by the seller until final settlement. A price is agreed to and the buyer pays principle and interest to the seller. Since a land contract can be filed at the county records office, the taxes must be paid current to the day of the contract by the seller and a recording fee is involved. The buyer should expect to incur some closing costs as a result but these are often applied to reducing the principle. The buyer is responsible for taxes, insurance and maintenance of the property. After a set number of years, generally three to five, the balance owed to the seller is paid in full by a conventional refinance through a mortgage company or a bank. At this time the deed is transferred.
In both cases, if the contracts are not complied to by the buyer, the property becomes the responsibility of the deed holder except with a land contract, the equity acquired by the buyer is generally refundable to the buyer as a result of liquidation of the property at auction if necessary.
So, if you want to buy a house and your credit is currently shaky, find a seller who doesn't need the money right away and work out a deal that benefits both parties. You don't need to look for "For Sale" signs either. You can always walk up to someones front door and make an offer though it is less likely to be accepted. Now if anyone wants to offer me a cool million $$$ for the "Crack House" I am all ears!

Wednesday, October 08, 2008

Enquiring Minds Want to Know .......

Did we sell the house? Well, we have a strong potential buyer and I will know more in a day or two how the transaction will turn out. We will end up with either a rent to own or a land contract scenario. The process has been interesting because it didn't produce the results we were expecting but it did produce a result that we wanted. So in that effect, the concept worked. Here is what happened. I placed adds on numerous free classified ad sites for greater exposure and I designed a pull off phone number type flyer and put a few of these up wherever I could but realized that there were so many potential places to place them that I could never get to like the employee cafeteria at Wright-Patt Air Force Base or Wright State University etc. Soooo, I attached a copy of the flyer to an email and sent it to everyone on my email list who receives the neighborhood newsletter every month electronically and asked them to put the flyer up if they could. Now the fact that it read "$100 or highest best offer" got some immediate response. I got a call from an old neighbor asking about what we were doing. We sat on the roof of the "Crack House" for an hour or so while I was working on my chimney discussing financial options available and covered a few owner finance scenarios that might work for him. He reported back to me just days later that he may be able to sign a land contract with a friend of his on a duplex that he could live in while renting the other half and fixing the place up. Then, one person we know fairly well called and told me that they had placed our flyer up at work and offered to rent the place for $600 a month if we couldn't find a buyer. So effectively we had a bailout plan before we even placed the ad in the newspaper or held the open house days. We got over 40 phone calls. Most were investors looking for cheap property to fix up and rent. I suspect many of them drove by the house after I revealed the address and realized that it was truly worth more than they were willing to pay for it. What is the place worth? We bet it could appraise in the $85,000 range however, we elected to have a sale at the same moment the U.S. credit and financial markets were crumbling around us. We factored in many things. Our dream price would have been $90,000 but to get this I would have to replace the roof, replace the water heater and put in a new furnace to replace the perfectly good 1950s era gravity furnace that has worked for half a century! So I would have to spend $8,000 or so reducing our realized price to $82,000. Then, to get the best possible exposure we would have to list with a realtor in order to be on the multi-list. Upon a sale we would be expected to hand over $5000 in commission, taking us to $77,000 realized gain but this could take a year or even 18 months costing us between $5,000 and $7,500 in mortgage payments, taxes and insurance as well as the cost to heat the "Crack House" just to keep the pipes from freezing and the walls from cracking. Net gain ends up being $70,000. So we decided that if we got any offer in or around that amount it would be acceptable.
We held an open house over two days. From 10 AM to 5 PM each day. This was a huge waste of time. We should have run it from 1 PM to 5 PM because we had only 9 or 10 lookers and 5 bids. I think about all the work I have to do on the "Crack House" and I am stuck indoors on a beautiful weekend waiting for people to arrive at our door. Most of the people who showed up for the open house were walking or driving around the neighborhood, saw my signs and stopped in out of curiosity. Two left bids for the opportunity to get a house very cheaply. All bids were very low and unrealistic. On Sunday night, before calling the bidders, I called our rental offer person and asked if they would like to own the property if we could work out a land contract or rent-to-own deal. They said "Yes" and lo and behold, a $600 rent equates to a $70,000 mortgage plus taxes and insurance. There is a variable depending on what interest rate you use. We picked 5.75% as being very reasonable. Effectively this established a best offer scenario for us but since they were not a bidder on the bidding sheet, I had to follow the process that we had established. The purpose of the whole process is to establish a sales price that is agreeable to both parties. Nothing was binding until we agreed on a price, then a finance arrangement and we made it very clear to everyone that we would accept the best deal for us. The highest bid did not get above $35,000. We don't know if that was because the bidders did not understand the concept of an auction or they had no real idea what houses are worth that are ready-to-move-into quality. I called the "serious" bidders back after the bidding came to a halt and told them our best offer is a land contract for $70,000 and they have the opportunity to offer us something reasonably better. That didn't happen. So. I meet with our "buyer" later today to make sure they are happy with the place and to discuss the financial arrangements that we can fine tune and at the end of the month we can sign papers and depending on the arrangement, get them filed with the county. No muss, no fuss and we probably won't need a lawyer or have horrendous closing costs.
So we have to ask ourselves, "Did this system work." The answer is yes and no. Yes because the effective marketing brought forth a candidate who would have never considered they would be in a position to own their own house had they not called us. We were also able to explain that we could, if need be, owner finance for several years. Had we just posted a sign in the yard, this person would never had considered talking with us. Yes also in the fact that we found a serious real buyer very quickly. No in the sense that the bidding process did not establish a fair market value for the home. Of course the financial crisis did not help our situation as far as strangers were concerned and advertising at $100 attracted a whole bunch of "bottom feeders" who realized quickly that our home would be worth more than they were willing to pay. The financing thing isn't so bad because we act as the mortgage company and earn interest so after say 5 years we will have realized a real $ amount close to our dream price!
How did we get so smart? We purchased the "Crack House" in a similar manner and I would advise anyone to seek alternative financing arrangements over a traditional one any day because closing costs will eat you up! Plus, real people are easier to deal with than banks.
My next post will explain the difference between a "Rent-to-Own" and a land contract so you have a better understanding of the concepts in case you want to try what we did.

Saturday, October 04, 2008

More Bugger-it Cursings!

Not only do I have to go and fight with the real estate tax appraisal people next week, try to sell a house this weekend AND wrestle with the three cats to get them transferred to the "Crack House" so they don't get out during our open house. I have just been notified by AOL that they are no longer supporting their FTP space. The layout of this site will be much affected if I don't do something. I have 7 years worth of web pages stored there! I now have to move them and worse than that, I have to go through every single one and change all the links! So, if you have never read the link on the right that says "The Entire Crack House Story" you might want to go ahead and read all that stuff now because after October 31st it will all be GONE! At least until I find another free hosting site. Anyone have some suggestions?

Friday, October 03, 2008

The Plight of ELVIS.

I have been informed that ELVIS (Extra Large Volume Iron Soaker aka "the worlds heaviest bathtub") was abducted from it's retirement home though it may have eloped with an iron sink that appears to have gone missing at the same time. It was not, I repeat NOT slumped over, in, on or even near a porcelein telephone. I'm sure there will be reports of sightings before too long in many major cities across the U.S. If you see a cast iron shower tub, circa 1955 in a donut shop please let me know .........