Two weeks ago we found an investment property here in Denver. The property we found here in Denver actually had two houses on the same piece of land. But those two houses were selling for the price of one. One of the houses was completely finished. The other needed some work. We offered $40,000 below asking price.
Did we get the property?
Risky to offer that low, yes, but unheard of, no. Making money all depends on a good offer to start the buying process. We knew the second house on the property would take at least $15,000 worth of work to get it up to speed. The owners of the houses had done all of the remodeling themselves and stopped renovating the back house when they got the bedroom and living area. These would be necessary areas to renovate to rent out in any neighborhood.
Sadly, after the 24 hour deadline, the seller’s real estate agent rejected our offer and said the seller’s had accepted another offer at just $10,000 below asking price. The seller’s real estate agent seemed sketchy though and kept telling us to bring them a higher offer. We didn’t and the very next day, the house was pulled off the market and all real estate websites. We didn’t sweat it and decided we’d keep looking.
But like many things in life, it doesn’t end there.
Don’t Be a Sucker for thinking Bait is Fate
Earlier today, we again made the same offer of $40,000 below asking price. Again, we were told to bring a higher offer. The sellers were seeking a price $10,000 below asking price. Again, we refused. Then, after we refused to increase our price, the seller’s agent told us the seller had just received two offers, each $10,000 below asking price. Shocking, that the requested price came in immediately after we refused to increase ours. It seemed like again, their agent was trying to bait us. Many people may read the second chance to bid on this property as fate. We did not. It’s like the fish who sees the same worm twice. It’s not fate, just bait, and will make you someone’s dinner.
I believe this house will be back on the market time and time again until a seller finally bites at their requested price. In the meantime, if we have the opportunity, we will continue to put in our offer, $40,000 their asking price.
Enact that Plan B You Kept in Your Back Pocket
If this same property with the two houses comes back on the market, will we put the same offer in again? Yes, certainly. Eventually, if the seller wants to sell bad enough, they will bite at our $40,000 under asking price offer.
However, like we said we would do, we kept looking during the past few weeks. And we found another property. It is a duplex in an up-and-coming Denver neighborhood. Both units of the duplex have recently been renovated within the past year and are well-done. It was previously used as a commercial property in the front with an apartment in the back. The yard is huge, there’s a two-car garage and also plenty of on-street parking. The light-rail recently opened some stops out this way as well, which makes this a very desirable area for those commuters looking to make the daily trek downtown.
We offered $20,000 below asking on this property. Why? Well, when we walked through the property, we noticed that several of the electical outlets near the sinks were without GFIs and that there were no carbon monoxide detectors in the place. GFIs are the outlets with the red and black boxes in the middle that shut off the power immediately if for example, a hairdryer fell in the water. Generally, a house will not pass an inspection without GFIs and carbon monoxide detectors in place so we wondered if permits had been pulled during the remodel.
Make sure Plan B is Just as Secure as Plan A
Our Plan B property is not without its issues. Turns out permits weren’t pulled which can lead to issues with the remodel and with zoning. Like I mentioned, this property used be used as a commercial property in the front with an apartment in the back of it. All residential properties are zoned. Some are single family, some are multi-family, and some are mixed use, meaning they can be used for commercial or residential. The zoning for any property can be pulled from the city records with just the address.
Although, this property is set up as a duplex now, we found it was only listed as a single family home in the city records. Most likely this means permits were never pulled to turn it into a duplex. This isn’t necessarily a deal-breaker. Sometimes older homes were divided up before the zoning laws took place and can be grandfathered into a different zoning. However, if it’s not grandfathered in, the last thing we want to deal with is trying to re-zone a property after we buy it. It would be expensive and time-consuming.
We’ve made our offer contingent upon the zoning being verified by the city of Denver. They have three weeks to get this verification, because the city’s zoning department is notoriously slow. If the zoning clears, then we move onto the inspection and assessment. If this doesn’t happen, we get our earnest money back. I’ll let you know if we get this one!
And Never, Never, Never Give Up
The process of buying properties can be frustrating. Overwhelmingly frustrating when you go from house to house and find one you like and want to buy. You run your comps to make sure you are pricing your offer appropriately. Next, you work with your agent to draw up your offer. Then, you submit your offer and get a rush of adrenaline thinking of the profit that may be in your future. You wait and check your email and voicemails. The sellers may counter with a higher price. You may find another property during that waiting time (because you never stop looking), but you want to put an offer but can’t because you are waiting to hear on another one. Then, the offer’s not accepted and it’s the process all over again.
This combined with the rest of life that includes work and bills and obligations can become exhausting. Recently, I have let my work effect me and my drive the past few weeks. It has been stressful with work travel and very tight deadlines and a few very grumpy and demanding co-workers. This is where I value my husband as he is able to pull me out of my work funk and keep us on track. It’s normal to have some ebb and flow in determination related to the early retirement adventure.
But remember, never, never, never give up.
And work, work, work to find that perfect property now. Then quit looking when you retire early and never worry about those grumpy co-workers or deadlines again!