The story about how I found the property was simply the MLS (multiple listing service) on a local realtor's website. Doing my usual browse in my spare time, my eye came across what looked to be a good deal, so I took some time to drive by the property. I usually look around the outside first to see if it is really worth spending the time for a showing of the inside. There was definitely some tuck-pointing to be done, but in general it looked much better than many similar properties that I'd seen in the neighborhood on past drive-bys. Looking back at my calendar it's hard to believe that the showing was way back on 1/20/2013.
The showing told me a lot more about the building than I ever could have gotten without seeing it in person. I knew a fair amount from the MLS listing: it was a 6-unit apartment building with 3 units occupied; the roof, hot water heater, and boiler were new in the last 5 years; and the interior was fairly updated and livable. But through the showing I also learned that the entire property had been renovated with new plumbing and wiring in 1991; that the foundation had also been stabilized and reconstructed; that none of the tenants were Section-8 or subsidized (meeting them gave me more confidence that they weren't bad people too); that there was a partial 4th floor that was inaccessible but big enough for other potential rooms; that there was a huge walled-in basement with brick archways; and that there was a boatload of touch-up work to be done in every corner of the building. I was happy that most of the work seemed within my realm of expertise and that there were some bonus items that I hadn't expected. Most of the major systems also seemed to have been updated recently enough to at least give me time before I'd need to upgrade them to the higher standards that I envision.
After the showing I knew that I was going to make an offer (albeit much lower than their $79k asking price), but I took my time talking to lenders and getting my financing lined up, which turned out to be harder than I imagined. It turns out that being above 5 units makes lenders consider you as a commercial loan instead of a residential loan (even though I'll be living in one unit). This took my desired 30-year fixed rate loan at 3.5% to 5.5% for only 5 years fixed and adjusting every year thereafter. It's also slowed down the process as they evaluate me as a new business rather than a single person who is easily capable of handling the loan for $45k by myself. Sigh... But I thought I had gotten through this mess by getting a pre-approval letter before making my offer...
So after three weeks of that whole mess, I finally made my offer on 2/11/13 for a low-ball price of $60k while including many other things like Seller paying for title insurance, closing costs, and a home warranty on the appliances (most of which I didn't expect to get included in the final deal). Surprisingly they came back near halfway at $70k without taking out the side items. Because I valued those items as at least 2-3k, I accepted their counteroffer (after the inspection I knocked off another 2k for a final price of $68k with all the goodies included).
After I returned from a trip to Vail to ski over the holiday weekend, I got the home inspection scheduled for my first weekend back(2/23/13). It was great to take the day to learn even more about the building and how it works. Some of my inspectors had even been a part of a past renovation and could tell me that pretty much from the front to the back of the building had been one open box with everything in between reconstructed. They said there had been multiple iterations of rehab in this property and that what was currently there was number 3-4. I learned a lot about the mechanical systems and helped them take inventory of all the odds and ends that needed fixes; mostly minor. Even they were stumped as to why the 4th floor access had been closed up, but gave me pointers for renovating it like they'd done to their properties in Mt. Adams. Potentially it could give city views from a balcony cut into the roof if done correctly. The negative surprises were that the electric was single strand aluminum, which has the potential to start fires if not correctly spliced to copper at the outlets and switches, and that a small section on the first floor's structure had been improperly repaired and would need redone. Mainly due to needing to recheck all of the electric work I asked for an additional $2k from the Seller, and got it.
With the inspection behind me, only the bank was holding up the closing on the property and as I touched base with them it seemed that they hadn't gotten anywhere since I 'd given them the contract weeks earlier. After a couple more weeks passed, I learned that I'd need to move the closing back another 30 days from the original March 21st close date in order to get the deal done. To this day I am still waiting on the bank to do their job and give me the money that I need to close. Unfortunately I'm still waiting official approval from the Seller that I have the extra 30 days and can wait to close until April 21st....
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