Hey guys, Sharon from digital nomad quest and this is Sean with everything Rei and today we’re gonna go over the moldy house he purchased $125,000 in the progress with it. Have you guys are new to this channel welcome I’m all about teach y’all how to build passive income become financially free and design your best life. So we are interested in that make sure to subscribe and hit the bell button to be notified on my latest video, make sure to subscribe to Sean’s channel where he talks all about real estate investing. First off we are currently in Texas right now we’ve been here for about two weeks or so we’re actually flying back tomorrow. I don’t know when we’re going to post this. But we’re going to be back by the time we post this we came here to visit the house. We talked about it in our previous video. If you guys haven’t checked that out, make sure to check that one out. We talked a bit about the numbers and stuff like that. Now we’re going to talk more about like the mold remediation process. As you guys saw, we were in escrow to close on the property. But we’ve had some difficulties since and we’re still not closed yet. As of this moment, maybe by the time we publish this, we might be closed. I’m not completely sure. Okay, we’re gonna talk a bit about the process during escrow with the wholesaler and all this stuff. So I remember when we were trying to get this all closed, it was like a process because the wholesaler wasn’t being responsive, right? I was getting like annoyed because for me whenever people are unresponsive, especially with like business stuff, I get very, like anxious and impatient. So I remember we were at Great America. And I was like, like this is happening and you’re trying to calm me down, you’re trying to make me like have a good time at the park. And then later on, he reached back out with us. And he told us that closing will be delayed even further than we anticipated, because of the way that he set up the closing. So this might be a bit too technical. But when you are closing on a property, you’re supposed to be the one that buys the property close out with the seller, and then he was going to sell it to us pretty much the same day. So it’s like a double closing. But he was doing this with a short sale property, which means that the seller is paying the bank less money than he owes on the mortgage, the mortgage on this property is maybe you’re in the $140,000 range. And that thing’s only getting around $70,000. So take a pretty big cut. Now to do this, the bank usually writes in the agreement that the new buyer won’t just sell and make a profit, which is exactly what this wholesaler was trying to do. And because of this, the short sale was not going to go through anymore. So we have to change terms so that we are not the buyers. And then we pay the wholesaler like his wholesale fee, which was Ozzie what I thought we were gonna do in the first place, but because he didn’t talk to anybody, you didn’t really communicate CAD, this extra layer of hurdles that has delay closing till now, which has been pretty frustrating for us. Yeah, so I think the minimum time that like you can sell a property in the contract, I guess it was like 90 days, if he bought the property, and then you want to resell it, it has to be a 90 day period, you have to wait before you like sell it again. So that’s why like we couldn’t do that. And then we had to take over essentially and then pay the wholesaler, a finder’s fee. So we had to rewrite the contract and everything like that. It was just kind of shady that like he did it that way. You know, we spoke with the agent. And the agent was like, Yeah, I had no idea about this. He just told me about this. And he was like, if we did it the right way, we could have avoided like a lot of difficulties, like a lot of time wasted and stuff like that. So we were getting annoyed. We felt like oh, should we even trust this person. So that’s what the agent said. So like, in my mind, I was thinking this felt shady. Like he wasn’t disclosing stuff to both parties. But after speaking with him, it seemed like he didn’t realize what he was doing. But he realized it was an inconvenience to us. And he basically brought down that purchase price to $120,000 instead of $125,000. So I think we came to like a good agreement. We didn’t want to sever that like relationship because he could still be a good like partner or something for us to work with. But yeah, so that was like the whole deal with that. I think everything worked out. We’re all like okay, now now like the Agent is a person we’ve been speaking with more versus like the wholesaler. Even though we got all those agreed we sought to go through more delays because now instead of qualifying our wholesaler as the new buyer, they’re going to qualify us but luckily that process went by really quickly. Dendi had a final estimated settlement statement that they had to send to the short seller, which is the bank and have to prove that and then the seller now has to sign so the seller doesn’t live in Texas anymore. They are male away. And we’re just waiting for them to sign and then we can sign and then we’re gonna close. So supposedly it’s gonna happen sometime this week. But we don’t know for sure. Yeah, so originally, we came here for the purpose of like going into the property and renovating and stuff. We actually plan to get mold remediation done before we even got here so the whole timeline got completely messed up. So we’re still in escrow even like we’re leaving tomorrow we’re still in escrow said we use the time to view mold remediation companies and general contractors we also did visit the property you know what, let’s go visit the property right now. Let’s go drive by right now. Alright guys, so we are driving through right now so you guys can see the property. We’ve already checked it out a few times already. Let’s go do that right now so you guys can see it. We’re pulling in we’re pulling in now. Let’s go Let’s
go
Alright guys, we’re gonna show you guys a property so let’s head out our we’re gonna go inside I’m not gonna Shawn’s gonna go inside here
oh hell to the no look at this Oh hell no so gross I see you remember not to walk into that day yeah
spider when I walked back alright to this web It’s so crazy to home OH MY GOD NO NO NO NO NO NO GOD PLEASE NO No dude oh my god All right well as you see when you walk in this property is a day oh spider just hanging out over there frickin gross tall hairy and stuff to feed on jump me right on walking nice and easy
it’s you minutes later
alright running in oh my god Okay, so here is the mall crazy homeowners love all this stuff here too so all the stuff is going to go I’ll just trash all this carpet is going to go this chairs moldy could be some stuff on the wall and me just dirt just walk up here like this
is their home closet Limra under some cracks over here to backyard needs to completely be done as well. Kitchen Cabinets cabinets him okay okay, it’s going to one room nice keep it 100 Trump seems okay bathroom cabinets might be able to scrub them here’s the shower can’t really see much here the closet of old stuff here. Oh there’s a lot more on the dock right there too. So go careful for that
a lot more than this bathroom as well. Well and this garage is where a lot of damages so can we see it here but let’s just close it up for now because it’s really bad in there oh crap Alright, let’s go upstairs Chabad over here you see got mold come here over here and over here so they’re gonna do is cut everything here upstairs living room area
upstairs rooms seems okay. We all this carpet is going to go anyway. Are the ceiling fans okay, too? So, no, it doesn’t seem like a leak.
Okay, so this is the laundry room No, doesn’t seem like it’s that bad here. I don’t know why it’s like that for laundry room area. Okay, they go hot and cool stuff here’s one of the bathrooms sir up here oh, here is a toilet. Look at that. The other corporate diapers here. Use diapers. Gross. Oh, I’m all here. Okay. Yeah, like someone just took a dump and left it there
oh so you guys checked out the interior. So actually, I’ve never actually been inside that was all Sean’s footage, I always stop at the front of the house. Thank you for getting that footage. Even though I told him not to go inside, it’s so bad in there as he is and see, right. So I did not want him to go in there for like safety reason. So we got a bunch of mold remediation companies to go in there, they were actually okay with going inside the property because apparently the mold is like dry. If it’s like triggered, then there’d be health issues. But like, currently, I guess it’s okay, something like that. I’m just more like weary and I don’t want to go in just in case. That’s why he was like more comfortable with going in. I was like, so we got multiple bids, they were ranging a lot, like somewhere going up to $45,000, which was like, insane. I think we’re basically seeing around 20 to $25,000 right now for our bids. I’m not completely sure who we’re gonna go with. And we’re gonna see if we can talk with them to see if like, we can make something work better for us, or he’s leaving because he wants to do a call right now. I guess I’ll just take this right now. Yeah, so the courts are arranging pretty significantly. So we are still speaking with maybe three companies that we’re still possibly going to work with. So on top of that, we also interviewed some general contractors. And we’re able to get some quotes for the GC work, which will happen after the mold remediation stuff. So that’s going to take quite a bit of time. So we’re waiting on the closing, we’re waiting on the mold remediation stuff. Before we can start the GC work. One of the GCS was saying like $100 per square foot, which is insane, because our properties around 3000 square feet, right. So if it were 100 times 3000, that’d be $300,000, which is basically the cost of a new build. So it made no sense. So we were able to get some quotes, we think we should be around the 50k range for the GC work. But we’ll see things may change depending on like how the mold remediation goes, and what the property looks like after that, and the way our arrangement is, we’re probably going to be the ones doing the materials like ordering the materials, and then we’re gonna pay for the labor for the GC. Okay, Sean’s back. Did you take the call, I was busy doing business. Okay, so almost me pretty good. Because you figure 25,000 for mold remediation, and around 50,000, for the total rehab work, we’re going to be in it for about $75,000, which is actually what we kind of estimated going into it. And that’s actually on the low side, because we thought was in between 75 and 125k. So that means that with a purchase price of 120,000, plus maybe 5000 or so for, you know, title and escrow fees, we’re going to be in it for just around $200,000, that is estimated. So we hope that it will be around there, right? Yeah. And if it’s 20,000, then we’re very much in the clear, because homes in this area rent for at least $2,000 a month, maybe even $2,300 a month, if we do a good job renovating, it kind of follows the 1% rule, it’d be $200,000 rent it for $2,000. So that’s, that’s our hope. That’s like our goal right now to get it to around $200,000. And the beauty of this whole strategy is that after it’s completely repaired, homes in this area are going for around $300,000, which means that we’re going to be around 66% LTV, which means that when we do our cash out refinance, it should be very easy job. And we’ll be able to get all of our money back maybe even a little bit extra at very low interest rates. So that’s the first strategy we’re hoping to take advantage of it. Another thing I want to mention is that since this whole escrow thing has been so complicated, our private lenders are currently in Hong Kong. Right now we’re thinking we’ll probably pay all cash for the property. And we may tap into that HELOC I mentioned before for like renovations and stuff like that. Another thing is it’s been eye opening to and it’s been very productive because we’ve been going to like real estate investing meetups we’ve been meeting up with not just like contractors and mold remediation companies, but also other investors, other agents, we met a lot of different people that we could potentially work with in the future. So I think always go to meetups, if you can, especially when you know like what you’re looking for, because I feel like we’re getting more and more ingrained in our target market. And we’re trying to find the right people.
We’re trying to find the right deals. So we’re kind of understanding what we need. We also have been driving for dollars which has been really fun. I may make a video on this in the future to kind of describe how we’ve been using it. We’ve been using prop stream to help us with driving for dollars because they have like The mobile app, but also like it’s been a great way to find like off market deals. So I will go into more pop stream tutorials for you guys link below if you guys are interested in Prop stream. And yeah, we’ve also just been driving around these different cities to see what the city has to offer. We’ve actually enjoyed our time a lot out here. Did you enjoy it out here, it was a lot of fun. This trip is actually very tiring because we started off with Nashville at a conference. And then we’re here in Texas looking at properties and going different meetup groups and driving around right? All over. So it’s been quite a tiring vacation. Actually, it’s not even a vacation though. We can’t we came into this knowing it was like a workstation and I thought it was very productive and fun at the same time, which is like what I like because if it’s just like a vacation, you end up getting like, you know, restless you want to start being productive again. So like we kind of had the mix, and I thought it was a good solid trip, in my opinion. Alright, well I hope you guys enjoyed these updates on the moldy house. We’re planning to do more to document the process. I know some of you guys have been asking me like where’s the next video for this? So we will definitely be documenting this process. I think it’s interesting one for you guys. If you guys enjoyed this video, let me know in the comments below if you guys are shocked by the moldy house and how much you would pay us and like those walls. And then make sure to subscribe and hit the bell button to be notified on my latest videos and subscribe to Sean’s channel as well. And we’ll see you guys in the next episode.Transcribed by https://otter.ai