Modification of My Construction Loan

November 20th, 2006

Well I have my C/O so now I can modify my construction loan. I did a construction to perm loan, so now that the construction part is done its time to turn it into the perm loan.

I am going with a 5 year Fixed Rate mortgage, so it will go adjustable after 5 years. The initial interest rate is 7.5% which isn’t too bad considering I only put $5,000 down and this is an investment property. My payment is around $800.00 per month without taxes an insurance. It appears my taxes are going to remain based on the raw land for the next year, so I am going to save some money their. My insurance is around $90.00 per month, so at a total payment of around $950.00 I am going to have great POSITIVE CASH FLOW if i get tenants at the $1,200 per month I am looking for. Based on the rental market in my area I am pretty sure I can.

I didn’t have to bring any additional money to the modification, I just had to pay for my first year of homeowners insurance. So all in all I have around $6,000 of my cash tied up in this project and the rest of the funds came from the mortgage. I had to modify the loan amount upward to cover the stolen A/C unit, but i had plenty of equity so it wasn’t a problem. The modular home appraised considerably higher than what I paid for it!

The lender was great, the title company was great, I am now in my permanent mortgage with a fixed payment and rate for 5 years. Now its time to find a tenant!

Waiting for my first Certificate of Occupancy

November 16th, 2006

Well after replacing the stolen A/C unit my cost of the project went up a few thousand dollars. I am not real happy about it, but it is one of the risks. I could have filed it on my insurance, but I would rather not. In the long run I feel like it was better just to pay for it.

The perimeter enclosure is in, we went with a reinforce vinyl siding that is durable, lets the crawl space remain accessible and easy to maintain. At this point we just went with some basic steps on the front and back of the home, I will probably end up putting in some porches in the future, we’ll see.

As soon as we get the C/O I can modify into my end loan and start looking for tenants!

Air conditioning Stolen!

November 12th, 2006

Ok, so one of my homes had its air conditioning units stolen! I got a call today that one of the A/C units has been stolen and its going to cost me around $2,000.00 to replace. The police came out and fingerprinted and took statements. They said there were a number of A/C units stolen, all from new construction homes!

I hope they catch the guy.

Construction Update on First Home

November 9th, 2006

Its been a week since the home was delivered and things are coming along nicely. The A/C has been installed, the plumbing is all in, and the inside of the home is finished. There was some drywall that had to be patched after shipping, and a good bit of crown molding and baseboard that had to be installed on site.

The A/C company did the A/C unit and the power box all at once. They installed a circuit breaker on the side of the home and wired in the whole house and the A/C unit. It only took them 1 day to get all of the electrical and A/C in.

The plumber came and had to run a number of pipes under the home. The drains had to be run from each bathroom and the kitchen out to the septic tank. The water tap was put in by the county and the plumber connected the incoming fresh water to the home. Seeing how easily accessible the pipes are under the house makes me feel good as an investor. If there are ever any plumbing problems down the road it won’t be very difficult to get underneath. Most homes in Florida are built on a slab so correcting plumbing problems can be very very expensive.

The interior drywall work looks good, it only took about a day for the drywall sub to finish up and have the inside looking perfect. We still have to get someone in to seam the carpet where the sides meet but the inside is pretty close to being finished.

Modular Homes Set

November 2nd, 2006

The homes were set today and it was a very interesting process to watch. The homes came in on trucks and were unloaded onto the foundation. The roof then had to be raised. It was shipped on hinges due to the height. So each half of the roof was raised and then the connected at the top. I am going to try to get some pictures of a home being set at some point in the future to post here.

The insides are pretty nice, knock-down textured drywall and nice appliances. I put in 9 foot ceilings which give it a good open feel. I think someone will enjoy this as a home and I can really see the project starting to come together.

Selecting Modular Homes

October 4th, 2006

I have been looking at different modular home companies to decide why direction I want to go. I have found some modular homes that are very complex, and very expensive! Some of these modular homes are mansions, built in 10 – 15 pieces and having very advanced architectural designs. On the lower end of the spectrum are simple rectangular homes, they seem to be very cost efficient, I will only have to pay shipping on two parts instead of 10 – 15 and they are as large as 2000 square feet. There is even a rectangular DUPLEX available, that might be able to provide some real positive cash flow. I’ll keep you posted.

Cash Flow Modular

September 3rd, 2006

Welcome to modular cash flow. I am a real estate investor and I am experimenting with modular housing. This blog is going to track my progress, and hopefully success, using modular homes as investment property. I will share my experiences with every aspect of finding the land, financing the homes, building the homes, renting and eventually selling the homes.

I was originally drawn to the idea of investing in modular housing because of the low cost per square foot and the ability to complete the homes quickly. When an area has a shortage of rental property there isn’t time to wait for a full year while a new home is built, the market could change.