Refinance

Last year I bought this house with a 5/1 I/O ARM at 6.625%.  It was lame, but the best I could do at the time. I just refinanced it for 5.375% for 30 year fixed.  The total payment went up about $20/month, but this includes $300/month of principal pay down.  The refinance cost about $4500, so it will pay back in about 15 months, then I'm in the black. 

I used Zillow's marketplace to get loan quotes.  I just put in all the relevant data and got back quotes from about 15 brokers.  You could sort by "total cost" over 3 or 5 years, where total cost equals total fees for refinancing plus interest rates.  This will allow you to compare loans and determine what's cheapest depending on how long you're going to hold the house.  I am sold on this, rather than having a loan broker I use over and over again.

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$300 here, $1k there

Today I got an email from my property manager saying that there was a leak in the basement shower of one of the houses...apparently that was fixed a while ago.  But the drywall was never repaired.  So it just cost me $300 to get the drwall repaired.  And the crappy shower that was in the house when we got there now apparently has gotten crappier, so we have to replace it.  It's gonna cost me $1000 for a vinyl shower plus installation.  I want to put in a tile shower, but he says that will cost me $3000.  :( 
I should have replaced the shower when we first bought it, but my wallet was getting sore after I replaced all the pipes and electrical.  Oh well.

Finishing the story

I apologize for not finishing the story.  We got the roof put on, and Kevin got the property rented to a family from North Carolina for $1900/month.  They wanted to rent it starting October 1, which is a little later than I hoped, but strangely enough coincident with the date of my first mortgage payment.  Kevin got the first $950 as his 1/2 month (well, he had to split it with Phillips Real Estate, his company).  So at least I had some income to go with my first mortgage payment.
As I mentioned before, this house is a 4 bed/1 bath.  This is not the optimal configuration.  We're going to ask the renters (once they move in) if they'd like for us to add a second bath in the basement and raise the rent.  We'd like to spend <$5000 and raise the rent $200 so that we can recoup the cost in around two years ($200x24 = $4800) and then we get the incremental income.

We also got the house on Corliss Ave rented starting 9/15, so we ate 2 weeks of vacancy in which we had to paint the house and clean up the yard.  This ends up being a quite expensive month, since the yard and paint was about $1k, plus about $900 lost due to the vacancy.  All this adds up! 

One additional note:  I ran into a friend the other day and he asked me how the economy and housing market is affecting my houses (he calls me a land baron).  It turns out it's affecting my stock portfolio significantly more painfully.  Houses are down nominally about 5- 7% in Seattle, while my stocks are down 30+% from peak.  Of course if I actually tried to sell my house, it would probably be significantly worse than the 5-7%.

Papers signed!

This was the fastest closing yet.  Jen and I got there at 9:30 and signed the last papers at 9:50.  Incredible. 

Apparently they file the deed and release the money tomorrow morning, and we get the keys tomorrow night.  That's pretty quick for seattle as well.  It seems like we often wait three days for the keys. 

The painter is scheduled for Friday, so hopefully we can have it on the market Monday, and tenants in it quick and in a hurry.

Tomorrow's the day!

Jen went to the bank today and got a cashier's check for $62,328.56 to close the deal. She doesn't like walking around with that much money. This was from the HELOC on our primary residence, which we're using to finance the down payment. Although long term rates are up lately, Ben Bernanke has been nice enough to keep short term rates down. I have auto-payment via my bank so our rate on the HELOC is prime - 0.50%. So this month it's 4.49%. Not so bad. I wish I could get long term money at this rate. And, it's tax deductible since it's financed from our primary residence.

Next steps, sign the paper tomorrow (tuesday), get the keys thursday, and get the painter in there (Friday)? The head roof guy is out of town this week. he offered to send over his guys, but David suggested we wait a week and a half til he gets back, so we get it done right. Probably a good idea. So we''ll get the painting done first, get the house on the market, and then get a new roof.

It'll soon be Kevin the property manager's turn to do his stuff. We've also got the kids moving out of our first rental this month, so we need to get folks back in there ASAP, or we're gonna be waaayyyy Cash Flow negative.

I learned something new today about Google

I installed the Google Analytics tracking code, which allows me to see how many page hits I'm getting each day. I was doing pretty good last week...I had about 10 hits a day. All of the sudden, it went to 0 hits for the last three days. I knew that at least I was hitting my site, so there should be something! It turned out when I updated the template, it overwrote the tracking code that I had hand-added to the original template.

This isn't about the house, but is equally as frustrating as buying a house!

I just also added my blog to this Directory of Real Estate Blogs.

Ready for Closing

Yesterday afternoon the woman from the escrow company, Michelle, called and said "When can you come sign?" She offered to do it Monday, but I have a big meeting at work, so we've scheduled it for Tuesday morning. That was fast! I first gave the mortgage broker my application over the phone last Friday, and all the paperwork is done this Friday, and ready to sign on Monday. I guess the mortgage folks aren't quite as busy as they were two years ago.

She even sent me a pdf of the HUD settlement statement, and the mortgage broker sent me a pdf of the appraisal ($390k, $10k more than our price).