Hopefully the first inspection will happen tomorrow or Thursday and then we can cover things up and, with any luck, get our final inspection on Monday or Tuesday of next week.  If not for needing a permit to tear out two non-load bearing walls, that were built by the previous homeowner anyway, we would probably be finished with this house.  Now we’re going to be about two or three weeks over our original timeline. 

And they wonder why people don’t want to pull permits.  I don’t have any photos of the new wall yet, it was a very long Labor Day weekend and I didn’t make it over to the project house.  Hopefully we’ll have a chance to get over there tomorrow with a camera.  Once we have some decent photos I’ll update once again.

The sheetrock is up in the front half of the house and it is painted.  The flooring is down in the front half of the house as well; with the exception of the ceramic tile in the bathroom which we’ll wait on until we do the ceramic in the kitchen.

We went ahead last week and had a draftsman come out, draw out the current kitchen layout and then create plans for what we want to change.  These he created and had stamped by a structural engineer and now we have plans that we can take to the Parish for permits.  Now we don’t have to replace the wall, we can actually move it. 

So tomorrow is permit day, hopefully, and then we’ll be able to get the back half of the house finished.  With any luck we’ll have this one done in a couple of weeks. 

I’m going to attempt to  upload a couple of photos.  I will post more as we progress. 

The crew showed up at the site Monday morning at 8am and proceeded to tear up all of the old carpet, begin removing the paneling from the living room and they removed a wall that we are going to move over about 3 feet to make one of the bedrooms a bit bigger. 

Well, at 9 am an inspector from the parish shows up and shuts us down for not having a permit.  Yes, that’s right, we did not pull a permit.  And on this one job, where we did not pull some sort of permit, it just so happens that we purchased this particular house right next door to a retired parish building inspector!!!  It was nice of the seller to neglect to mention that little gem.  And it was a very warm welcome to the neighborhood.   Whadda ya gonna do?  We were wrong so we move forward.

So, one violation notice and a stop work order later and we are dead in the water.  Soooo we spent the week figuring out what to do and decided the best thing, just to clear the violation and clear the stop work order, was to file for a permit to put the wall back where it started.  Even though it’s a non-load bearing wall we are required to have a set of drawings, stamped by a structural engineer, that says it’s OK to move that wall over three feet.  We finally got the permit this afternoon to put the wall back up in its original position.

At least now we can get going on the rest of the house, yes we got a permit for that too.  We can remove the paneling and put up sheetrock and we can do the flooring (no permit needed for flooring). 

We are going to hold off on putting the wall back.  I think I found a guy over on the Westbank who can do the drawings and get them stamped for about $550.  If that’s the case we’ll have them draw up the wall move and not have to waste time rebuilding it where we don’t want it.

We wasted a week and a couple hundred dollars messing with our mistake but at least now we know where we stand and we know the neighbor will be watching so…..

Stay tuned, I hope to have a photo or two to post soon.  And I hope to have a progress report to post soon too.

The plan is to go day by day, as long as something gets done, and update you on the progress.  We want to tell you how we did it, why we did it and what we plan to do with it.  In the end we’ll see how it all works out and hopefully someone will learn a thing or two.

The house in question is a small house in a really great neighborhood in Marrero.  It’s a two bedroom house and we don’t normally do two bedroom houses but this one should make us a little money and we were bored looking for a project anyway.  Our realtor seems to think it will sell fairly quickly being that it’s in a great neighborhood so….away we go on a rehab of a two bedroom house. 

Here are the particulars:

After Repair Value (according to our realtor): $125,000 – $135,000 We’ll call it $130,000

Repairs: $24,000 (flooring, cabinets, move a wall, take down paneling and put up sheetrock)

Take ownership of the property “Subject To” the mortgage in place. Existing mortgage: $55,000.

Also had to pay the homeowner and catch up his overdue mortgage payments: $13,750.

So it should break down like this:  $130k sales price minus 6% for the realtors= $122,200

Subtract out the $55,000 mortgage and we’re left with: $67,200.

Subtract out the $33,000 we owe our investor, $30k loan at 10% interest and we have: $34,200.

Subtract out the $12,000 we’re going to have to spend for overages, mortgage payments, utilities, etc and we’re left with: $22,200. 

So we’re putting in about $12,000 of our own money to make $22,200 and we aren’t doing any of the work.  That’s an 85% return on our investment. 

So the investment doesn’t fit our normal formula, and the money is a little tight on this one but…I’m not going to be upset about an 85% return on my money.  If we had other projects going on now I probably wouldn’t have messed with this one but we were bored and looking for a project.  Not only that but we get to keep one of our investors engaged in the process, and he’s going to make his 10% so everybody’s happy.  

Now we just have to get it done and sell it.  Stay tuned.

We know that many of you knew Lee as he was a good friend of NOREIA and we wanted to post the details for his memorial.

MEMORIAL FOR LEE R. ORR

MONDAY, AUGUST 9, 2010.   3:00 —6:00 P.M.

NEW ORLEANS LADIES RECEPTION HALL – 504-366-3112

1771 STUMPF BLVD., GRETNA, LA 70056

(BETWEEN WHITNEY AND WRIGHT)

For More Information See the Alpha Insurance Newsletter HERE.

Did you know you can purchase real estate, loan money, purchase tax liens and deeds, purchase notes and even foreign currency with your IRA?  If you didn’t know you really need to be at this meeting.  

Do you think you make too much money to start up a self directed IRA?  Did you know there are special rules for 2010 only that allow you to do some things you wouldn’t be able to do in other years?  If you didn’t then you really need to be at this meeting.

The meeting is at the American Legion Hall on Metairie Rd at 6:15, don’t miss it.

Al

This month, in July we have Equity Trust Company coming to the meeting.  They will talk about self directed IRAs and how you can use them to invest in real estate.  Not only can you invest in real estate but you can loan money, purchase notes, purchase tax liens and deeds; all sorts of things.  So come prepared, if you don’t know about this little “secret” you are missing out on a great source of funding for your deals as well as a great tax deferred or even tax free wealth building tool. 

More to come.  Until then go make an offer.

Al

The meeting kicked off with a slightly longer than normal networking session.  We wanted to get Andy on early, and we wanted to give everyone a chance to do business, so we extended the early networking session and got right to the program. 

I’m happy to say that Andy kept the crowd engaged with timely and useful knowledge.  The Saturday seminar on June 26th is just about sold out.  We only have a couple of seats and books left.  Remember, if you pre-register for Andy Heller’s event at the Colonial Country Club in Harahan you get a full day seminar, lunch, and a copy of Andy’s newest book, “Buy Even Lower”.  The books are going fast as the Saturday event fills up, register now on-line by going to the Calendar page on the web site and click on the Saturday, June 26th event.  You will be able to register there.  If you have any problems with the web site or any questions please feel free to call, at reasonable hours of course, Al at 504-319-6541. 

Never stop learning. 

Al

Also, coming in July we have Equity Trust with us to talk about self directed IRA investing.  Not only will you want to be around for that one but you will want to bring your friends, even your non-investor friends.  You never know, they may like what they hear and become your next source of cash?