Category: June 2017

Wow, one week to go in our attempt to replace our rental in California with rentals in New Mexico. We’ve oscillated from anything between two to four houses in an attempt to spend as close as possible to the same amount as the value of the one in California. It’s been a moving target, as house contracts fall through, leaving us with unexpected amounts of money. But it looks like 3 houses is going to be the magic number. Hard to believe, 3 nice houses in very good neighborhoods in Albuquerque, for the same price as one modest, older, rental in Livermore. Here’s a photo of the one in Livermore we sold:

Last time I posted about houses, on Day 29, we had made offers on 6 houses and closed on one. We’ve now made offers on 8 houses! It’s definitely been more difficult than I expected.

So far, we’ve actually completed the purchase of one house, and we are currently under contract for two more. Of the other 5 houses we’ve made offers on, one of them we got outbid, two of them the sellers counter-offered and we did not accept their counter offer, one we cancelled due to a septic installation disaster, and another one we are planning to cancel tomorrow due to unexplained standing water.

We found out on Friday during the inspection that there is a broken water main somewhere, and we don’t know where. There’s standing water near the house and out at the street around the water shut-off valve. That’s the one out in Rio Rancho. The city will go out and look to see if the issue is theirs or not, and it may be a simple fix. But because of our 45-day deadline, we don’t have time to wait for this to get resolved. And we don’t want to risk any sort of expensive issue.

That’s also the same house that has the storage addition that is not permitted, and violates zoning code (not that anyone cares about zoning code). But I used to be a city planner years ago, so I know too much for my own good. And I don’t think my tenants need a storage area that’s accessed from outside only, that includes skylights and lots of electric power. That sounds a lot like hydroponics to me.

So tomorrow we’re reluctantly going to cancel our contract on this very cute, low-priced home in Rio Rancho:

So we went ahead and put an offer on another one in the La Cueva school district in Albuquerque, which is the best school district in the region. Now we are under contract for two in that same neighborhood, not very far from each other. We hope everything goes well with these two: 

The top one passed its inspections on Friday (yay!) and will close soon. The bottom one we just got under contract on Saturday, and we will now try to schedule inspections as soon as possible.

 

We are at day 29 in our quest to reallocate the funds from the sale of our rental in California, in the 45 days allowed by tax law.  So far we’ve made offers on 6 houses, and have managed to close on one.

The first house we made an offer on was the one with the septic system installation disaster, so we made the reluctant decision to not buy that one.

The second house we made an offer on was a very pretty house in the best school district in all of Albuquerque, on Oso Abrazo. Unfortunately, we were outbid by someone who wanted it more than we did.

The third house we made an offer on is the cute townhome on Academy Ridge, with the beautiful (but impractical) backyard. We closed on that one Friday, so it’s now our first purchase!

The fourth house we made an offer on was a nice house in Rio Rancho. They’ve been on the market a long time and are asking too much, so I offered low. They countered but only came down a couple of thousand. I increased my offer significantly and told my agent that’s as high as I would go. They countered again, and as before, only came down a couple of thousand, and they also stipulated that they didn’t want to close until the end of July. I want to close by the end of June and have it rented by the end of July. So I turned down their second counter offer and did not counter again.

Here’s the house that I didn’t buy because we were never able to agree on a price and closing date:

The fifth house we made an offer on is a very small house, again in the best school district in Albuquerque. That’s the one that went pending before I knew I was the buyer! I don’t have a good photo of it. We’re going back out there tomorrow (John hasn’t seen it yet). So I’ll take a better photo tomorrow.

So yes, you may be asking, “What? John hasn’t seen it yet?” And it’s true. I’m looking at houses without him. He simply doesn’t have the time. The first time he ever saw the Academy Ridge house, that we just closed on Friday, was during the inspections. For some reason, he trusts me to buy rentals, yet I cannot pick out tile without his sign-off. Of course if something unexpectedly bad comes up during inspections, we can get out of the contract. (Or if they destroy the entire property trying to install a new septic.)

Here’s the sixth house we’ve made an offer on. We are also under contract on this house, as of yesterday. John will also see this one for the first time tomorrow. This one is in Rio Rancho near Intel. John is a little worried that Intel will pull out of Rio Rancho, and the market will go down. But we offered on this house because it was a very good price.

There is one potential issue with a storage area that is attached to the house and extends to the side wall – creating a “zero lot line” situation. That may be violating zoning code, but we were told it’s been like that since before the current owners bought it, so maybe it doesn’t matter?

Zero lot line means there is zero feet between the house and the property line. Some houses are built like that (with city planning department approval). But the little shed-addition on the side of this house was obviously an after thought. I’ll add better pictures tomorrow. I had a migraine when I saw this house Friday and didn’t take good photos. And of course the listing photos don’t include the funny addition.

But in general this house is quite nice inside, and has an easy-care backyard with no neighbors looking into it (that’s my pet peeve; neighboring windows looking down into the backyard). This one doesn’t have an arroyo though!

You can almost see the funny storage addition; the white door on the left side of the house. There’s no indoor access to that storage area. There were no keys to get into it, so we stipulated that we would need access to the storage area during inspections.

From google earth, it sort of looks like the locked storage area might have skylights. See the two little white dots on the lower left next to the neighbor’s tree? Those look the same as the skylights elsewhere.

Hmmmm. Now why would people install skylights in their potentially illegal, locked shed/storage addition? I have one theory…

When a seller has accepted an offer on the house, the house “goes pending.” That means the buyer and seller have agreed on price and conditions, and are under contract. The sale is pending. It’s not fully sold until inspections are done and approved, and the buyers submit their funds at the same time as everyone signs the final documents. So there are 3 main stages, 1) Offering & counter offering when the buyer and seller negotiate the initial contract, 2) Inspections, where the buyer has the house inspected and requests that the seller fix any serious issues, or gives a credit to the buyer so they can fix them after closing, and, 3) Walk-thru and closing, where the buyer verifies the property is still in the same condition as when they made the offer, everyone signs the final documents and the buyer pays for the property.

On Tuesday night, we made an offer on cute little house on Eagle Crest in the La Cueva school district, which is the best school district in Albuquerque.

 

The other great thing about this house is actually has views!

On Thursday morning I woke up early and saw on-line that the house had gone pending. The first time we made an offer on a house in that school district, we got outbid. So I assumed we got outbid on that one too.

I was a little disappointed that the seller hadn’t counter offered requesting a higher price if my offer was too low, since ours was a cash offer. Cash offers are generally preferred by sellers because they close faster and there is not the risk of the buyer failing to secure their mortgage. So I was hoping for at least a counter offer, and not just getting outbid again.

Here’s what actually happened:

 

 

It was Monday night, a day before we were scheduled to approve the condition of the house on Academy Ridge, and 4 days before we were scheduled to close. A friend of ours saw on my blog that we were planning to purchase a rental on Academy Ridge Road, and emailed us to say that they used to live there. He then went on to warn us that the neighborhood has a problem with failing in-ground ductwork, and asked if we had checked into that. We hadn’t.

I was like, “Ductwork for what?”  Turns out it was HVAC! I had no idea that sometimes HVAC (heating and air conditioning systems) ductwork would be installed underground!

Apparently the underground ductwork can rust and collapse.  Then new ductwork has to be installed on the roof, and new vents put in, all costing a great deal of money. I think it cost our friends about $15,000.  Wow, I didn’t want to buy a rental with a $15,000 ticking time bomb!

Here’s google map photos of houses on the same block, that had to put their ductwork on their roof after their in-ground ductwork failed.

So we spent a frantic evening trying to quickly research in-ground ductwork and how it can be maintained or remediated. Meanwhile, John was working late that night at work, getting ready for two big presentations the next day.

That was at about 9:00 PM. Then around 11:00 PM my real estate agent emailed to say, “The house does not have slab ductwork.”

Whew!  Apparently she had already looked into it, because she knew about the potential issue. She knew we would have to get it inspected if the house had it. But it doesn’t!

We closed on the house yesterday!

They’re going to have to start calling me “the woman who buys houses on arroyos.”

The house John and I bought together in Albuquerque when we got married backed to an arroyo.

The one we we were under contract recently to buy just recently, that had the epic sewer installation failure, also backed to an arroyo.

The one I just made an offer on yesterday in Rio Rancho backs to an arroyo.

And now today I made an offer on one in NE Albuquerque that’s…you guessed it…on an arroyo!

Apparently I don’t like houses behind my houses.

And wait! I forgot the Academy Ridge house! That’s the first rental it looks like we’re actually going to manage to purchase…expected to close on Friday.  The Academy Ridge townhouse doesn’t back to an arroyo. But look! There’s still open space back there, just not an arroyo; it’s an alley way.

Yesterday I made an offer on a house in Rio Rancho.  It had been sitting on the market for 2 months, which means it’s overpriced.  I made a low offer. It was quite low, so I wasn’t surprised when they counter offered. However, they only came down a token amount from their list price. And if their list price was anything close to right, they would have already had an offer.

But that’s not the funny part.  Get this; they also included a long list of junk that they plan to leave at the house!

I could imagine that they might actually that someone would want their old patio furniture.

But then the counter offer said, “All items inside tool shed convey with home.” Meaning, I would be the new owner of who-knows-what in their toolshed. Really? What are they thinking?  There could be hazardous and/or illegal stuff in there. I think they need to hire somebody to clean up their own junk!