A day in the life of James Cavanaugh - or a few

Buying a house!!

Ok, so it isn’t completely set in stone yet, but it is as close as it can get.  I am getting a fixer upper, what I thought I would get since the beginning.  I hope I am not jumping in over my head at all with all the work that needs to get done, but in reality, nothing but lessons to be learned.  In this whole process I learned about a lot of different things, a few that I had heard before, but became more ingrained.  I knew I could get a loan without much money down, but I didn’t know about all the different types, etc.  I am getting an FHA with 3% down.  So it started with me talking with the mortgage broker.  He told me I could qualify for a loan no problem, and about different types of loans.  He happened to be the same guy that Joe and Matt used.  He referred me to the realators that Joe and Matt used as well.  Because of their schedule and my schedule, they put me with their son, Curt.  He was easy to get along with, and I liked him better than the older couple anyways.  I started off just going to the houses that they would suggest to me based on my criteria.  I noticed most of the houses they showed to me were at the top of my range at around $300,000.  They were nice houses, but I knew I could find something cheaper.  When I was talking to Matt, he referred me to MLS.com, to search for houses.  I found many that were less than $200k that met my criteria.  Unfortunately most of them were short sales, which my agent told me arn’t easy to work with, can take a long time and don’t usually work.  I found later that they aren’t too much harder, even though I didn’t do it.  My list of about 20 initially was cut down to 10.  We were looking at the 10, and the ones that seemed like real good deals were on busy roads, where I could hear road noise all the time (which I didn’t want).  I found a couple good deals, but they were all over $250k- but still real good deals.  The last house we came to was $165k, and it was getting dark.  It has a huge back yard, sitting on .27 acres, the flooring was torn up, no appliances, new black granite counter top, bathrooms were in ok shape.  Rooms had terrible paint jobs done, but that’s an easy fix, cabinets need to be finished, like with doors and stain etc.  There is a stone fireplace, but the fireplace part was taken out, so I would want to knock out the stone.  Overall the house is relatively small at 1285 sq ft, 3 bed 2 bath.  The garage is pretty big.  I said the price is right, and the work doesn’t look too daunting.  Not only that, but I think if I did the work, I would be much happier in the end with my house.  And it would be exactly what I want.  So a rough estimate is it will take me $20k to fix it up to my standards.  That’ll bring the cost up to $185k – this house sold for $310k in 2004.  I offered $172,300 but asked for a seller contribution of 4.5% which brings that total right down to 165k…their asking price.  So essentially I was offering their asking price, but financing the closing costs. That left my down payment to be my only concern for up front cash.  The bank had multiple offers and made a counter offer of the same price, with only 3% contribution, which basically increased my cost by $2k, but the closing costs arn’t as high as we thought they would be initially, so I only need around $7k up front.  It doesn’t leave me too much money to throw at repairs, but I can spread the repairs out over some time to make the hit to the wallet not as hard, and I am planning on doing all the work myself, so that’ll save me a lot of money too.  If I hold onto the property for 2 years, and the market goes up at all, I could be looking at a nice profit.  I am super excited, and I hope everything works out.  I am thinking about starting a website – just a page on this website – to track all my expenses, to accurately measure how much profit I actually make when I sell the house.  I also think if I have a good template, I would use it on my fish tanks and stuff too.  I am going to start doing that now.  Wish me luck!

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