Friday, August 15, 2008

The Hunt!

As I said, I've always enjoyed walking through open houses on Sunday afternoon. In the past couple years, I've taken Toby along, and it's become a father-son bonding experience. One of the first words he could ever read was "OPEN" on the open house signs. "Windermere" came soon after. In the last few months, the market has slowed in Seattle -- not as much as elsewhere but it has slowed. I've been feeling the itch to buy another house. I found a house a few blocks away that was for sale by the estate of the previous owner, rather than a realtor, for 589k. A representative of the estate was there every Sunday afternoon for open houses, but there was not other advertising...I would link to it but it's not in the MLS. I really liked it...turn of the century craftsman with high ceilings, and a finished second floor, and a big semi-finished basement. I wanted to give them a low ball offer, so I called David and we went to look at it. We looked at it on Saturday morning, August 2nd. He convinced me that I couldn't make it cash flow (rental income - mortgage and expenses > 0), and that it would cost > $100k to fix it up and flip it. In this market, even if they would have excepted a low ball offer, I couldn't make it work.

Again, I started to get the bug. I added to my iGoogle customized google homepage a widget from This shows you the top 5 houses that result from any search you choose and you can link from your google home page directly to information about the house. Pretty neat. So when I got up each morning and checked my email and stock prices, I saw what the latest houses for sale were. On Friday, 8/8, at 7:41am , I found a 3 bed, 2 bath house in Greenwood for $293k. I emailed to David and we talked about going by there Sunday morning.

That night, Jen, Toby and I went over to Toby's friend Katherine's house. (her mom Chris is another middle manager/junior executive with me; her dad Mike is the best chef I know). Uncharacteristically, I left my blackberry in the car, making for an enjoyable but slightly nerve wracking evening. Mike made hummus, greek salad, chicken and lamb kabobs. And of course wine...lots of Syrah during the evening.

When we got home at 9 with a tired Toby, there was a message from David -- "we can go see that house that you wanted to see in the morning, but there's one that just came back on the market that we've gotta see too. They're looking at offers tomorrow afternoon at 4." So I called David back and told him we'd take a look at 10am the next morning. This house was 4 bed, 1 bath, for $380k.

Timeline for Sunday, 8/10:
10:30am (5 1/2 hours til deadline) -- take a look at the house with David. Looks promising, 7k sf lot, 4 bedrooms (although one is very, very small), and a huge semi-finished basement.
11:30am (4 1/2 hours til deadline) -- called Jen to see if she and Toby wanted to come see the house, as I wanted to make an offer. She says no. But she does want to see the numbers. :)
12pm (4 hours to deadline) -- Opened up Staroffice Calc (like Excel, but better) and run the numbers:

Purchase Price 381000
Loaded Purchase Price 392430
Cash Down 32000 0
HELOC cash 44200 -202.58
Mortgage 304800 -1493.52
Taxes 3178 -264.83
Insurance 720 -60
Prop mgmt
Total Expenses


Cash Flow

12:20 -- Jen's not so happy about the -310 at the bottom but she acquiesces. Call David and tell him to start writing an offer.
12:21 -- Call my mortgage guy, Ed, and ask him for a pre-approval letter. He says he'll get on it (on Sunday afternoon) and send it in a few hours.
1:38 -- send a follow up to Ed:
"Hi ed, thanks for putting together the pre-approval letter. You can send it to me at this address and the other address on the to: line.
When do you expect to send it? We're gonna write the offer at 2pm.

2:03 -- David gets here and we sign the offer for $381k (one grand over the asking price, even in this market). We stand around waiting for the pre-approval letter.
2:12 -- Ed sends pre-qualification letters (not too shabby service for sunday afternoon).
3:43 -- David drops the offer with the seller's realtor. He likes to deliver them personally. He tells them that we're a nice young couple looking for a nice house...doesn't mention that it's a rental property.
5:55 -- Update Facebook --
David is trying to buy another house...waiting to hear back from the sellers. 5:55pm
7:57 -- David calls and says we got it!
8:03 -- Update Facebook
David just bought a house in Greenwood. Not bad for a day's work. 8:03pm
8:37 -- Update Facebook

This was the easy part. Now the saga begins!

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