We have two more new-builds in the hopper and then I plan to be done.  Unless an irresistable deal happens to come along of course.  I’m getting tired of working with the builders.

These last two homes are DR Hortons that we signed contracts for last December 31.  They had a year-end fire sale and allowed investors into a community where they had not been allowed into previously.  They also allowed you to ride out the build time on a $2,500 earnest money deposit.  We did these homes up pretty nice with open banisters and 18″ tile on the entire first floor.  The deals were good at the time, and as of today’s prices still have over $25k in equity, but I’ve gotten spoiled since then.  I want more equity than that.  There actually aren’t many comps from the neighborhood (one I think?) because there hasn’t been any investor turnover.

In the last couple of weeks we’ve been debating whether or not we should cancel out of the contracts.  My husband has since gotten his RE license and we’d rather get paid commission to buy a house now.  Some builders are paying up to 10% right now.  There is another realtor on these homes (who we’ve not spoken to since Dec. 31 BTW).

We thought we’d tell the salesperson that we just bought two other DR Horton homes (true story) with much better incentives and realtor commissions.  By comparison, these are no longer great deals.  Plus if we cancel, there is a chance they will drop the price to unload them and we could buy them back.  They would maybe blacklist us though.  But if they did drop the price, they would be super duper deals and we would probably find another investor who would want them.  We also considered trying to get out of the deals by saying we no longer qualify for financing due to the two additional homes we just bought, then we’d get our earnest money back.  They already told us this wouldn’t work because it’s a situation we put ourselves into, not them.

The title company has left us six messages already with our closing date of Oct. 20 and we’ve been stalling.  We thought about different negotiating tactics and today decided to call the sales rep.  We told her that the deals just aren’t good enough anymore and since we just bought two other homes from them, if we were to extend ourselves out further, it better be for good reason.  They’d have to deal.  So we now have an offer back in to “the boss” to see if our new price is accepted.  We’re going for $206k plus 2% closing costs.  We’ll be sure to indicate this is 2% off of OUR closing costs.  $206k would be another $20k off our contract price.

Our strategy would be the same as always: 5% down no prepay, then re-fi into a pay option arm using the instant equity before our first payment is due.  We should squeeze out 3 months before our first payment is due, plus get about $2k back at the re-fi closing.  This will buy us 3 months with no payment plus the $2k we can spend on blinds and backyard landscape.  We’d either lease option or rent them out, cash flowing either way.

I imagine we’ll hear back tomorrow regarding our offer.  If accepted, we’ll have two more loans to speed through. 

I don’t know how many credit inquiries my credit report can take!  I just started the pool loan process for our new primary today (they promised to do only one inquiry) plus the DR Horton loan officer on our last house pulled my credit four times for that loan.  He’s gone on vacation but as soon as he’s back I’m going to have him write me a letter for the credit bureaus to get those unnecessary inquiries removed.