The Great Paver Adventure

I'm always looking for a deal.   After seeing the first round of quotes for the pool deck I decided to check out craigslist for some pavers in hopes that I'd find something cheaper than what the pool builder quoted which varied from $5 sq.ft. for brick pavers and $9 sq. ft. for travertine.  I'll be adding a post about the pool very soon (we are still picking out a pool company).



Pavers in the driveway at Tampa

As luck had it I found an ad on craigslist for 1500 sq. ft. of travertine for $2 sq. ft.  There was one catch however; the pavers were installed on a driveway in Tampa some 60 miles away and we had to remove them ourselves.  Being the skeptic I was we contacted the seller and then drove to Tampa to see this great deal.  As it turned out the house was located in south Tampa (a pretty nice area).  The pavers had been installed about 5 months earlier and because they had been installed wrong were separating and cracking.  They were a little dirty from being driven on and some were cracked; but most were in good shape and just needed to be pressured washed since they had been sealed.  We quickly met with the seller and provided a 10% deposit with the agreement that we'd pick them up the following Saturday.  The driveway however was huge!  There were actually over 1700 sq. ft. of pavers. 

The following day I texted my lawn guy to see if he could help.  He's not real good with english and his daughter called me directly to figure out that I needed a crew and more importantly a truck with a fork lift.  We'd need to stack the pavers on pallets and then transport them the 60 miles to the Sarasota house.  After some negotiation and with her acting as the translator we reached an agreement that he'd help the following Saturday and more importantly had access to a truck and forklift.  Another Craigslist ad and I found some free pallets.

The week went by and  the Friday before I texted my guy to confirm that everything was ready to go for Saturday.  I immediately got a phone call from his cousin looking for clarification on my text.  Needless to say he had no truck and was not ready.  Needless to say I was not real happy.  A quick call to the seller looking for another week on my end did not go well.  They were installing the new driveway on Wednesday and needed the pavers up.   I frantically started searching the Internet for companies that rented trucks with forklifts to no avail (for a reasonable price).    We had a party to go to and I needed some time to think through the problem so we headed out passing through Elwood Park a semi-rural area with horses and lots of blue collar type dwelling.  That's when we saw the sod guys place that we had driven by a 1000 times.  He had a fairly large truck parked nearby so we stopped and I called the number on the sod-by-the-piece sign.  To make a long story short he had a buddy that had a large truck with a forklift and we worked out a deal.  $375 to pick up the pavers on Saturday and deliver to Sarasota.  Another quick call and my yard guy said he'd have 2 guys at my house at 7 AM.

We started picking the pavers up at 8:15 AM and finished at noon - 11 pallets worth.  Along the way I had to find a few more pallets at the local Home Depot.  By 3:30 PM they were delivered to Sarasota and we had a happy ending to the story.  Jan and I had a sore back the next few days - but we had found a deal - remember I like a good deal!  Next deal is to get them installed... and that's another story I'm sure.

Unexpected Problems at Garfield Delay Homeowner and Title Insurance

Problem #1 Live wires at the wall heater

As with every real estate transaction there's always a surprise or two along the way. With the Garfield house we had some electrical issues and a survey issue that had to be cleared up before the insurance company would issue a policy and before the closing attorney would issue title insurance. We had the house inspected before closing but apparently the insurance company looks for a few more things than the home inspector did. Luckily we have a good electrician that we've been working with for several years because as expected I had to had travel out of town for work that week.

The first electrical issue was in the retro bathroom where there was an original wall heater than was not working. We had to either fix the heater or ensure that the electrical connections to the heater were capped off.
Being that the house was 60+ years old we opted to remove the wires all the way to the power source ensuring that it would not be an issue. We could have just added some wire nuts but decided to just pull the wire.


Problem # 3 Exposed wire in closet

I actually like the retro bathroom - it's the original bathroom and looks like something from 1950, because it is!  So far Jan has it last on the list to rehab so it'll be safe for a while.  Gotta like that yellow tile!

Electrical issue #2 was an unterminated wire under the eave of the house on the west side.   This is another one that a couple of wire nuts could have fixed but we had the wire on this one pulled also.  I believe the previous owners were planning on putting a security light on this side but never got around to it.   It's actually a good spot for one now that decided to put a shed on this side of the house since we will not have a garage.

The last electrical issue was in the outside closet where someone had run wire from an electrical outlet in the attic down the inside wall and through a hole in the outside wall and connecting to an outside receptacle.  The receptacle was used to power the sprinkler system control box.  To fix this issue conduit was added between the attic receptacle and the outside one and the wire run inside it.  Another easy fix.

Moral of this story is that even if you have an inspection don't expect it to find all the problems that the insurance inspector would have concerns with.  I'd expect they would but this is not the first time we had a problem like this.  In a previous blog We Need Rehab: Home Inspections Lower Risk I discussed how inspections can lower risk.

The title insurance issue problem cost a bit more to fix and started at the seller closing table when the closing attorney was casually discussing the survey and questioning the improvements that the sellers had made to the property.  If you look closely at the survey you can see a wood deck on the front of the house and a fence line on the west side of the house.  The sellers removed both of them.  However, in spite of the fact the lot lines had not changed nor the footprint of the house he would not issue title insurance to us until the survey was updated!  Generally the survey is the responsibility of the buyer and we were going to need to get an updated one anyway - just don't need this problems at the closing table.

Lot Survey showing wood deck that

That's it for this post and have a great day and be thinking about my back.  I'm working on the rock pit over the next few weeks.



We have another rehab coming up - Lido Key

We finally found a house on Lido Key that we'll actually keep and live in after we rehab it.  Jan's been looking on a daily basis ever since we sold the condo at Lido Shores which she is now managing for Rick and Candy (the new owners).  The new house is a bit small but should be about the same size (1500 sq. ft) as our house now after we get done with it.  We plan to keep the Bradenton house and rent it out -we'll see if that actually happens when we get done with the Lido house.

When all was said and done it came down to lifestyle at Lido. After we moved out of the condo we really missed the beach, parks, and restaurants at St. Armands which were only a short walk away.  The new house is also about a block from the kayak launch on Lido so I expect we'll eventually get a couple.   There's a boat in the future and we should be able to either trailer it on the side yard or dry store it at Marine Max on Ben Thompson park just a bike ride away.

I'll be blogging on our progress as we work through the challenges that any 60+ year old florida house brings with it.  This house has some good bones though so I expect when we are done you won't recognize it from where we are starting and it won't blow away if we have a hurricane.  First order of business is to add a master bedroom suite where the carport / porch are.  Jan also wants to open the kitchen and remove that tile in the living room. Here's a link to the zillow map and the virtual tour.

We will be naming the house when it's done so give me your thoughts on some names!

BuildBankroll - Chris and Jan's Featured Flip Real Estate Blog

BuildBankRoll

http://buildbankroll.com/

Education is the key to success in becoming a successful real estate flipper or investor. Others believe it just takes a strong stomach for risk and a lot of luck.   The internet provides an excellent learning ground for basics to complex and I find myself routinely looking for new ideas and websites.

BuildBankRoll provides a great balance between education and risk - call it "educated risk" which is something that Jan and I have ascribed to since day one.

BuildBankRoll is a very good website/blog by a guy named Steve in Southern California. He provides lots of education on his blog mixed in with the houses he is buying and has rehabed. Each house that he's flipped is listed in a side bar and chronicled to some extent so it's easy to see the types of properties he's flipped and the amount of work that he's done. I was surprised to see a number of houses that had fire damage among those rehabbed and it actually makes great sense as I'm sure the properties were picked up fairly cheap... a segment I had never really thought about.


Another nice feature is the quick link bar to specific topic areas such as Buying, Evaluating Deals, Rehab, etc..  Basically a rapid sort function of previously posted blogs for the topic area.

What I like most are the GOALS they set and track each month and the level of education provided in common sense lauguage. It's clear that they do their homework and vet each deal in order to find the gems. For those looking to get into flipping its a primer on the way to do it and the amount of diligience it takes to be successful.
 
The real key is they have a plan, execute against the plan, and measure performance. 
 
This is probably the number one reason for success - just because you don't make the plan goals it doesn't mean you give up.  This business takes a lot of learning and persistence.
 
We look at a lot of property evey week and this guy puts us to shame... then again we are part timers now looking forward to maybe doing it full time some day. Now I just need to get a contractors license...

Buyer Beware - Insurable Title vs. Marketable Title

We decided to walk away from the Fannie Mae property that I talked about in a previous blog as a result of this.  Turns out the last owner transfered the deed and the property was never foreclosed on which means that any problems with the title would need to be cleared at our expense!!

I found this on the web at www.activerain.com by Ron Webster a real estate attorney in South West Florida.  It provides a pretty good explanation of the differences and the risks.

General Rule: All marketable title is insurable, however, not all insurable title is marketable.

What is the difference?

Insurable title may come with a host of defects. However, despite these defects, a title insurance underwriter weighs the risks involved and allows the title agent to issue a title policy even though there may be blemishes and potential problems down the road. Ironically, should the value of the property increase dramatically, the buyer is only protected to the extent of the original purchase price.

In contrast, marketable title is a title that is clean, has no defects that will come up again in a future title examination when the property owner attempts to obtain financing or more importantly tries to sell the property. Accepting insurable title could result in problems which need to be addressed at a later date resulting in both time and money.

Title Insurance Companies may recognize a problem when you go to sell the property. Their first solution is to ignore the problem and reinsure over it again whereby they actually profit from their previous oversight. Unfortunately, many buyer's, if properly represented will not accept this proposal.

Why is this important?

Standard A - Title of the standard form contracts in Collier County, Florida provides "Title to the property shall be good and marketable with legal access, subject only to the following exceptions..."

On more than one occasion in the past year, I have had frustrated sellers lose their deal because the property was not marketable. Title companies often gamble that the issue will not come up again or will be overlooked. When problems do come up they are more often difficult to resolve requiring corrective documents in the chain of title.

What does this have to do with foreclosures?

Everything! The problem is that every purchaser who is looking for a good deal buying a foreclosure property is required to sign a contract that states to the effect "The buyer agrees to accept at closing "insurable title" provided buy the lender's closing title company." Talk about the fox guarding the chicken hen - WOW!

Unfortunately a great number of foreclosures are riddled with title problems. This past year alone I have encountered countless problems which required the lender to go back and either re-foreclose the property or obtain the necessary releases or corrective documents. In one instance a title company overlooked a multi-million dollar lien in the form of a judgment which would have remained with the property following the transfer.

As a result, I cannot emphasize the need to have an independent title exam performed for anyone who is wiling to accept the lender's title policy which often has countless exclusions for liens, etc. leading buyer's to have a false sense of security.

Another major issue I encounter when dealing with title companies involved in foreclosure is that many are run as a sweat shop located outside of the state. Not only are many of these companies unfamiliar with many of the nuances of Florida Law, a few of them are either incompetent or down right thieves!

I cannot begin to tell you of the excessive mistakes and charges I have discovered and corrected on behalf of buyers. Ironically, I have never once seen a mistake on a closing statement benefit a buyer. Common examples are shifting closing expenses to the buyer which were not a part of the contract such as the seller's documentary transfer tax, charging unconscionable fees for title examination, title searches and settlement fees which were not part of the contract, shifting past due assessments and other seller obligations onto the buyer.

So often buyer's haggle over the purchase price and overlook some of the biggest expenses of sale on closing statements. Many times seller's dangle the carrot of even offering to pay for the cost of the title insurance provided you close through the seller's closing agent. In essence, a number of times there may be hidden defects or costs involved. Remember the old adage "if it sounds to good to be true.....

At the end of the day, protect yourself, protect your buyer and be sure to engage a qualified Real Estate Attorney to perform an independent title examination any time the seller offers to provide title insurance because insurable title does not necessarily mean marketable title.