Don't Trust a Gift House in the Lap (Part 2)

On Sunday, Some Guy was back at Hick's SUS2.5. Not about the truck deal, but about the house. As if we need anything else to worry about.

"Some Guy was there again. He said a buddy told him that he'll have to pay taxes on the money he gets for the house. Maybe up to 30%. I told him yeah, he'll get taxed for what he makes off the house. I don't know how much. He asked if we could write the sale for less. For $15,000. And pay him the rest in cash. I told him I didn't think so. But I needed to talk it over with you."

"The point isn't if we are ABLE to do it. But if we WILL do it. That amount of sale will be recorded. It will look like we bought a $15,000 house. Then when WE sell it, that will look like a much bigger profit. WE are the ones who will get taxed on it then."

"He said if he had lived in it for two years, he wouldn't have to pay the taxes. I said that's right, too bad he couldn't do that, but he said his name wasn't on the title then."

"So he's particular about how he wants to cheat on the taxes, heh, heh! I don't like the idea of cash. It will be hard to get. The bank tracks every withdrawal over $1000. There will be a record that we took out a lot of cash. You'll probably have to ask for it ahead of time. It might set us up for a tax audit in the future."

"One of my buddies said he took out a lot of money to buy a car for cash. The teller asked him what it was for, and he said, 'None of your damn business! It's MY money!' So they have to give it to you."

"I'll call The Pony, since we're partners in this. Just to get another opinion."

The Pony heard the story, and said, "Sounds like tax fraud to me. But I don't care either way."

We have decided this is not an option for us. It's either done like a regular real estate deal, with a cashier's check, or we are out.

As of this writing, it's Sunday night. On Monday, Hick will tell Some Guy (if he shows up at the title office) that we expect a regular (legal) agreement and purchase, or he can sell to his other (higher offer) buyer. I seriously doubt that somebody else will hand over that much cash.

Don't Trust a Gift House in the Lap (Part 1)

On Thursday, Hick made a handshake deal with Some Guy to purchase Lap House. That's a flip house that fell into Hick's lap on Monday, a house inherited by Some Guy from a friend who passed away. They agreed to meet at the title office for an appointment the following Monday to draw up legal paperwork.

On Saturday, Hick came home from his SUS2.5 (Storage Unit Store 2.5) with a hope-dampening tale.

"Some Guy was at my unit today. I'd told him I'd trade him for a truck he has. He wanted a couple of my guns. He come in an picked out the most expensive one, and said, 'I'll take this one, and another one.' I told him, 'Well, I haven't had a chance to look at the truck yet. So it will have to wait.'"

"Oh, no! Now he'll be disgruntled, and might not go through with the house deal!"

"No. He also come in sayin' that another guy had offered him more for the house. Then he said, 'But I made a deal with you. So I'll stick to it.' I think he will. But we'll find out Monday if he shows up for the paperwork."

"Why are you trading for a truck? You don't need a truck! How are you gonna sell a truck?"

"Old Buddy wants the truck. I figure I can work the money out of him."

"Yeah, IF he shows up to work!"

Anyhoo... everything still seems to be go for the deal on Lap House. Right?

Tune in tomorrow for another episode of How the Gift House Drops.

Lap House Dance

Hick spent Monday and Tuesday evening talking about Lap House. With a gleam in his eye. I could tell it was his new love. So desirable. Bargain House was a fleeting memory. An old flame.

I couldn't really find any good reasons to reject Lap House, aside from cash flow. I'd talked to The Pony, who was on board with a new flip, given the understanding the money from the Bargain House sale was needed for investment. Hick kept emphasizing that he'd told Some Guy that he would need a couple days to think about it, and would let him know. So Wednesday night, I gave the okay.

Hick called Some Guy, and said he'd like another walk-through. That was on Thursday. On my way to pick up The Pony for our errand day, I heard a text come in. I was driving, and couldn't read it. My phone rang. It was Hick. I also shouldn't have answered, because that's illegal here now. But being a scofflaw for selective purposes, I did.

"Val. Some Guy wants more than we talked about. Three thousand more."

"Where are you?"

"I'm here now. At the house."

"Can he HEAR you???"

"Nah. There's some other guys here."

"I think we can come up with that. Since it's still lower than what he asked for. You couldn't even do your 'split the difference, split the difference' bargaining. 

No. I tried."

"Well. It's only $500 more than splitting the difference would have been. It should be fine."

"Okay. I'll tell him."

By then, I was only a few blocks from The Pony's house. We drove down that way to get a look. Hick and some guys were standing out back in the alley behind the house. We waved. The front looked decent enough. Lap House has good lines. Nothing sagging. Nothing falling off. Not an eyesore.

After going to the bank, and getting gas for T-Hoe, and shopping at Country Mart, I drove The Pony home.

"Let's go by Lap House, up the side street, to get a good look at the back. I can pull into the alley."

No. I couldn't. Because there was still a bunch of guys standing around behind the house! Hick was gone. I didn't want to look like a weirdo. But I was already going up the side street.

"YOU look, Pony. So they don't suspect anything."

The Pony reported that the back looked okay. We'll have to go by this Thursday if we want to stop. IF there's nobody hanging around then. Hick reported later that there were two other guys hanging out with Some Guy, and they were all drinking beer. A lot of beer.

Anyhoo... Hick accepted Some Guy's price. He called the title company and got an appointment for Monday afternoon for him and Some Guy to go fill out paperwork to start a title search.

You'd think we just bought ourselves another flip house. Or DID we...?

Lap House Specs

Hick went to look at Lap House on Monday afternoon. Since this opportunity fell into his lap, that's the name I have chosen for this potential flip. The house was not listed with a realtor. Just Some Guy wanting to sell it, who was a friend of the guy who sold us the Double Hovel flip house(s).

Some Guy was waiting to show Hick the property. It is TWO HOUSES DOWN FROM PONY HOUSE! Of all the places it might be, there it was. Almost a neighbor of The Pony. Some Guy inherited this house from a friend who died.

Anyhoo... it's on a corner lot. Across from it is an old elementary school that has been converted to apartments. Beside it is an old church that is not occupied. There's a gravel alley in back, and off-road parking. A back door on the church side, for easy entry from the alley parking. The roof is shingle, and in good shape. The house has vinyl siding, also in good shape. There's a basement with an outside entrance. Hick likes this, because it makes running plumbing and electric easier than with a crawlspace. Inside, it's 2 bed/1 bath. Hick said the kitchen is outdated and needs to be completely redone. The only way to the bathroom is through a bedroom. It needs new electric. There's a gas furnace, but no air conditioning besides a small window unit. 

Some Guy has painted some of the rooms. Has torn out all the carpets. Hick doesn't know if he was planning to flip it, or update it to live there. Some Guy quoted Hick a price. Hick said he would have to talk to me and The Pony, and would get back to him. Hick thinks that after fix-up costs, we could make a $20,000-30,000 profit on Lap House.

A House Falls Into Hick's Lap

Hick was driving to his SUS2.5 (Storage Unit Store 2.5) on Monday when he got a phone call. It was some guy he didn't know. He said that he heard Hick buys houses to flip. Turns out Some Guy knows the guy we bought the Double Hovel flip house(s) from. Who is the dad of Genius's elementary school teacher.

"I told him I'd come by and take a look at it later this afternoon."

Well. We haven't sold Bargain House yet. The Pony's money is tied up in that. So we'd have to front the money until The Pony gets his cut of the Bargain House sale, then recoup it. Not a problem, but something I'd rather not deal with. We could still come up with the asking price without getting a loan.

With nothing happening on the foreclosure house that's been stringing us along since last fall, Hick is getting antsy for another project. Hick has told Loan Officer that he will not pay one penny more for that foreclosure house than he had first offered and been approved for. We have no idea what will happen when it goes up for bids on the courthouse steps.

"Maybe this is what's supposed to happen. So if we would get this new house, we'd forget about that foreclosure?"

"Not necessarily..."

Well. I'm sure I'll have something to say about THAT. I'm pretty sure The Pony will share my concerns. More details about the "Lap House" tomorrow...

Reuben Was Here!

Hick did indeed bring home a Reuben sandwich for us on Tuesday. Of course I was giddy with anticipation. As giddy with an-ti-ci-paaaa-tion as a 1970s Heinz Ketchup commercial! I was really looking forward to the menu:

Broccoli Cheddar Soup

Reuben Sandwich

Slaw

Cookies OR Fruit

Hick brought them home around noon, to stash in FRIG II, then watch an episode of Gunsmoke before leaving to go play at his SUS2.5 (Storage Unit Store 2.5). He unpacked the bag at the cutting block.

"Did you only get one dessert?"

"There's four cookies in it."

"Is there slaw?"

"No. No slaw this time."

"But the menu says SLAW!!!"

"They had beets."

"You brought BEETS?"

"Nah. I said we didn't want the beets."

That's good. Because we don't eat the beets, and all they do is leak their beety fluids onto the REUBEN. Here's what we got:

Soup and a sandwich. Which is fine. Better than no Reuben. I warmed Hick's Reuben in the oven later, to get the bread all nice and crispy. The Reubens were better than usual. Had plenty of sauerkraut, and just enough of the Russian/French dressing, whichever they use at the Senior Center. 

Hick didn't want his soup, so gave it to me. I saved it for the next day, with the other half of my Reuben. It might look like a lot of soup, but the bottom of that container is not flush with the table. It's got about an inch of rim under there, with the bottom of the inner part built up. So about a half-cup of soup. It was pretty good. I would have liked more, seeing as how I didn't get my SLAW. There was actually a little piece of broccoli in my soup, and a piece of cauliflower. Hick's had two little pieces of broccoli.

The cookies were chocolate chip. I gave mine to Hick. They looked pretty good. He ate all four that evening.

Now I have to start nagging Hick to bring home the March menu. I don't want to take a chance on missing the next Reuben.

Hopefully, We Will See Some Bargaining for Bargain House

Bargain House hit the market last Thursday. 

Saturday, Hick got a call from Realtor Guy saying that he had shown the house, and had another showing that afternoon, but it had just been rescheduled.

Monday, there was an afternoon showing, and one scheduled for 6:00.

Tuesday, a showing was scheduled for 4:30.

Realtor Guy told Hick that the couple who viewed Bargain House on Monday said they would be in touch. You never know if they will or won't. They may have other properties to look at, or they may be checking on a loan.

Hick wants to know if people say there's something they don't like about the house. Not that he would change it, but so in the future he will do things differently with another flip.

On Monday, there had been 447 views of the listing, and 14 saves. 

Hick said, "And it's only been listed for a week."

I replied, "You mean 4 days."

On Tuesday, there had been 479 views, and 14 saves.

On Wednesday at noon, it was 510 views, and 20 saves.

I figure the saves are people who are interested in viewing the house, actively looking to purchase property. They're probably waiting to see if the price gets reduced, and how many other people are looking. It's not flippers, because this house is done, and costs more than flippers want to invest. When we are looking for a flip house, we will save the listing and check back for price reductions.

According to Zillow, Bargain House is "Likely to sell faster than 89% nearby."

We are happy that people are showing an interest. We don't plan on dropping the price unless several months pass with no offers.