The flames were getting hot but i made it through on my first success.

MD: after the bank turned down the loan the buyer went to another bank and with out incident agreed to a closing in less than 7 days. i couldn’t help but to think it was going to fall through but as the date approached nothing changed. then on the set day of closing Wednesday Aug 24 2005. my phone rang.

it was the seller.

i was thinking to myself, he must be canceling. yet when i answered the phone the first thing he said was “we’re set, lets get it done” and sure enough at 3 PM my Representatives walked into the closing room. (i could not get out of work) and by 4:30 PM they walked out with a check for just under $95,000

something did change however, the original agreement would have entitled me to around $35,000 but do to an unforeseen hardship, my partner and i cut our fee by a substantial amount down to $20,000 profit each. if i had the money to cover the down payment of the asking price of $65,000 (10% dp=6,500) then i would have made allot more. i can’t complain. I’m very happy and relieved it’s finished.

now on to the issues of DE.

before, i left of with the problems with the partner, closer,seller, + 1,000,000 other things. well things started to fall into place.

partner problem: Resolved

despite the problems with the partner we both stepped back realized the situation. he agreed to the 50/50 split of profit as per our original deal. in turn, i told him i recognized all the extra work and time he has put into the project and on the spot bumped his cut up to 60%. he was very happy to hear that. you might ask why? look at it like this: everything he does there pushes up appraisal and sales price. he HAS done allot since our argument. so had no work got done, i would have made X amount of dollars, with all the work i make Y amount of dollars and he makes y amount of dollars. now there was a point when everything he did to the house made my profit the same either way (X=Y) now we are at a point where i am set to make a substantial amount more than i would have. so Y
Seller and Bank Problem: Fixed

the seller came back to town and called me then called the bank. the bank justhad not posted the payment as of that time. it worked out. however i was scared this could happen again so i took other actions.

Closing Lawyer: Terminated (not in the literal since)

this whole mess seemed to stim because of the lawyer not doing what he promised. this guy gave me the run around for dame near two month. i have desided to forget tring to deal with him and search for someone esle. however i still need the property in my name or we loose everything we put into it so far. i havea feeling that if i lost franks money, due to not getting the deed in my name andthe nbank taking it back he would hire a hit man and i would be terminated. (that one was literal) so i was left with finanicng.

Financing: In progress.

to get the deed now i need to secure a new loan. to do this me and my wife aplied for a invstment property loan. it was promply aproved and a closing date was set for 22 days later. the bank needed a substantial amount of colateral to aprove me… 20% to be exact. or just under $20,000 cash. hmmmm i just happen to have 20,000…..

I can’t make this stuff up… Don’t you love how things come full circle.

MD: as some of you have been following along this MD deal seemed like it would be cut and dry. man gets loan tenant moves out house is sold. the latest is that the tenant has started to move. really this time. and i may have mentioned we extended the closing date. the closing was missed yet again. REASON: the bank does not want to loan money on a 500 square foot home. the like a minimum of 700sf. normally fine, but, two reasons why this is wrong in this situation. first they waited till hours before closing to tell our seller this. and two, he is TEARING THE HOUSE DOWN and they know this. what the heck does it matter if the house is 500 or 500,000 square feet if the whole point of the loan was to buy property to teat down a house? we’re working the problem but i am growing tired of the constant idiotic funding problems. i do not hold this against the person trying to buy it. i just hope it will resolve before the next closing date.

DE. to recap the DE deal. i took on a partner and offered a even, and more than fair, 50/50 split of profits after all taxes. labor, materials, etc. when the house is sold. you provide cost of repairs and any personal labor you want, contract out the rest of the work, for 50%…sounds good right? chance to make a great return on your money. my downfall may be that i put faith in people and give them a chance without proof the are really a good person. first everything is fine. he had been doing some yard work and used his truck to haul away old junk. (reimbursed for gas, and etc) then after i made then things started to change.

we hired some porta Rican guys that lived close by to do some misc. work around, brush removal. some small paint job, grass cutting, etc. for a small under the table fee. well, my new business partner chose to become friends with these guys instead of keeping it professional. normally easy to be friends and work together for most people. my partner isn’t most people. it started out buying a case of beer after the first days work and slowly progressed to no work being done, him sitting around drinking with them and paying them more for less. we had a talk about the drinking at the property and it stoped….for a day.

i must add in here that i work 12 hour days 4 days a week and after leaving my day job come to check the house talk about what we’re doing next, check progress, etc. and on my days off i have been over there at 7 A,m. and stay for about 8 or more hours doing what i can.

now i just get off of work and head over to see the progress. my partner had been drinking again. he kept making some subtle remakes about all the time he’s putting in there and how i have not pulled my weight in the rehab. finally he says he expects to take a cut for all his time. nothing big, just a little cut for all his hard work. that’s fine i tell him. all though 50% of profits was what we agreed and it was his choice to do certain things instead f paying out to do them. i just tell him to give me a number so i can recalculate our agreement. don’t worry about that, it wont be to much considering what I’ve done. i just want to be compensated or my time. 50% is not enough compensation. it is clear he didn’t want to give me a price. i was about to leave because i hate dealing with people who’ve been drinking. i tell him if he expects more even i want a number right then. so he says…. $10,000

that’s right 10,000 on a deal i brought him into to try and help him make some cash. insane.

some words were said. i told him he just burned a bridge that could have made him allot of money in the long run. I left, went home finished the written version of our original verbal agreement and added in 2,000 for his time above and beyond the 50% we agreed. paragraphs to cover up any other loop holes for him to try and screw me and concluded by a paragraph stating if the above agreement is not to his liking he can leave the project and be reimbursed all funds spent with 7% interest. then he can bill my company for $10,000 or $10,000,000 for work done by him and since i would not be paying any amount other than what is fair he was free to sue me and i would be more than happy to plead my case f extortion and counter sue for the same amount.

he was given the agreement. waiting on his response. in retrospect i wish i would have just resold and walked away with around $10k. i swear i am never going to work with someone i knew or anyone for that matter until they prove to be trustworthy.

to add insult to injury the appraiser came out today and after he was done asked him for a rough estimate in the as is condition. he told me, 145-155. not nearly the 180,000 my partner was wishing for. i knew that was unlikely for it to go that high. on one hand I’m glad because he will not make what he wanted and wont be able to try and screw me out of more of my half. on the other hand, i would have made more by not attempting this partnership. that’s what i get for trying to help.

worse still. the bank has not yet cashed the check for the late payments. it could be they just haven’t gotten to it or they are refusing payment and may be trying to foreclose. everything else would seem like a joke if this is the case.. i would either have to come up with 20,000 out of pocket cash for a down payment of a new loan, which i don’t have 20,000 because d deal hasn’t closed yet. or the bank takes the house and we loose around 25,000 in money put into the property. the sellers well they are out of town for a week and i cant have them call to check…. if you religious, please prey for me.

so there it is, i hope this story will have a happy ending and not become a horror. i don’t want to rename the blog, “how i lost my mind in less than 120 days.”

DE:

well we got in there and completely cleaned out the entiire house. it was crazy we basicly said free stuff and about 15 people came over and started grabing what they wanted. then they helped us throw the rest into the dump truck. when it was droped off at the dump the total weight of everything we through out was nearly 3 tons!

today another propblem came up….the check i sent into for the payment was returned. scary. turns out the seller defulted unter thier assistance program and they want the full amount of around $4000 to bring the mortgage current. i’m going to send it in tomarrow but that changes the whole dynamic of the deal.

the original plan was to sell it “owner financing” to a person who could do repair for a huge discount. profit for myself= around 25,000. NOW i needed to take on a 50/50 partner due to the unforseen exspenses with the house. so the new plan is to completely remodel the house and have him cover all the cost. then split after all exspence. bottom line, im still going to make about 25,000 but now he is going to make about 25,000 aswell.

i’m just begging there isnt going to be any more peoblems getting this property.

MD:

they buyer in Md talked to me the other day and is aware of the problem with the tennent in the house. he completely understood and said it wouldn’t effect the closing because we exteded it for him a few times. so we’re set to go on the 12. although things allways can change.

Other:

i will continue to talk to people and possably pass deals along to other investors but i’m not going to take on any other project until the md deal is done and the de. deal gets close to being done. it’s to much working on two sinsitive deals and having all the unexspected problems. i have my future riding on this project. I CANNOT FAIL.

(dum dum dum…..Dramatic, isnt it?)