Selling the rental property?

[Nords]

Six months later, the tenants have asked us a second time about selling-- which we're happy to do. Landlording has been very very good to us over the years, but one home is more than enough for us to take care of.

Spouse and I have done several FSBO transactions, both selling and buying, and we're comfortable doing that again. From the tenant's comments it's possible that they're first-time home buyers. We get along well but we're looking for a good way to sell the place without making them feel that they're dealing with Mr. & Mrs. Snidely Whiplash.

Our first thought would be to go with the home's assessed value, which was last done in Dec 2007 for the fiscal year starting July 2008. The city's next batch of assessments will be mailed out in Dec 2008. I think the 2009 assessment will be 5-10% lower, but we're not trying to squeeze every penny out of this deal.

A second idea would be for us to hire an appraiser. We know the neighborhood's sales pretty well, and these 30-year-old homes are probably selling above assessment. Ours has new ceilings, new carpet, new interior & exterior paint, a new PVC street fence, an updated kitchen, a screened lanai, a whirlpool tub, a full attic, and a bigger floorplan on a bigger lot. All appliances included, a new gas stove/range & microwave oven, a 10-year-old water heater, and a water conditioner. The roof is 10 years old, heavy-duty cedar shakes with 30-40 years left. Great elementary school two blocks away, a shopping center a block away, a huge community park across the street. Not the best house in the neighborhood, but definitely in the top quartile.

An appraisal would give the tenants the choice of paying that price, or they could counter with their own appraiser. We'd probably settle on the average of the two, sign a contract, and turn it all over to the title company.

And of course we'd encourage the tenants to get a good home inspection. Heck, I'm curious to see how that turns out too.

The tenants have been in the place just over 18 months. He's retired military with what seems to be a good DoD civil-service job. His spouse just had their third kid (older kids are 3 & 5 years old) and I think they'd rather stay in the house and raise their family for a while than have to move again someday. From our beach-bum perspective they seem to have an awful lot of stuff. If we raised the rent, they'd probably choose to sell body parts rather than do another move. She also probably anticipates supplementing their income by running a home childcare business, something she hasn't been able to do as a tenant. And perhaps they sense an opportunity as Hawaii's mortgage rates & sales prices get softer.

Spouse and I are also willing to seller-finance up to 80% of the sale price. We'd offer a decent deal around NFCU's & PenFed's fixed 30-year loan, but without the origination fees & points. Because we want this deal to succeed, we'd probably try to structure the interest rate to make their P&I payment approximately equal to their current rent. They'd essentially lock in their current rent for 30 years while picking up property taxes and homeowner's expenses. Depending on how much they borrow, their interest rate could be 5.00-5.50%. That rate could be easily exceeded by long-term CDs over most of the next three decades, so maybe we want to rethink seller financing. But I'd hate to let such an easy sale get away because I'm pouty-faced about not beating CD rates. If we had to sell a vacant rental property then we'd easily spend a couple thousand in repairs & staging & marketing, and a buyer would probably be facing a 3-4% realtor's commission. I can forego a few thousand in interest to avoid those expenses.

Closing would depend on the financing but otherwise it'd be fairly quick. For tax reasons we'd prefer to close in 2009, but we wouldn't let it kill the deal.

I've done all the tax calculations for a straight sale (http://www.early-retirement.org/forums/f28/renting-or-selling-the-rental-property-28264.html) but I'm not sure how taxes would work for a sale with seller financing. That could also kill our willingness to seller-finance-- clearly I'd hate to have to fork over tens of thousands of dollars to pay taxes while all the sale's proceeds are tied up in seller financing.

Anyone have a link to a tax site or an IRS pub where I can research taxes vs seller financing?

I understand the tax-deferral & mechanics of 1031s and of putting this money into another rental property or a TIC investment, but we're not interested. We'd rather cash out and put the after-tax profits into our ER portfolio's asset allocation.

Any other ideas, tips, or pitfalls?

 

[Rich_by_the_Bay]

DW (realtor): Get the appraisal, or even two (one for each party) and agree to the average. It protects you from some kinds of liability (claims you withheld knowledge about pertinent adverse market or sales conditions, etc.). Caution about taking back the loan - lots of people are walking from their obligations - or at least get them to put alot of skin in the game (more than 20% - say like 50%).

Good luck.

 

[huskerblue]

Agreed on appraisal. Everyone feels like they are playing with the same information and you have a much more harmonious situation. The two appraisals and sell for the average works for some.

 

[Martha]

Here ya go hon: Tax Topics - Topic 705 Installment Sales
and: http://www.irs.gov/publications/p537/index.html

Note the need to report recapture of depreciation income in the year of sale.

 

[Nords]

DW (realtor): Caution about taking back the loan - lots of people are walking from their obligations - or at least get them to put alot of skin in the game (more than 20% - say like 50%).

Note the need to report recapture of depreciation income in the year of sale.

Thanks for the links and the advice. Dang, I was afraid of that.

Despite dealing with our usual "Oh, but these are really good people" bias, I think they'd need to bring at least a 25% down payment so that we could pay our own closing costs & taxes out of the proceeds instead of out of our pocket. If sellers brought 20% to the closing then it'd only cover the payoff of the mortgage that we have on the place. We'd still have to pay the depreciation recapture-- about $15K-- either out of our own pockets or by getting a bigger down payment. Then there'd be some additional tax for cap gains.

The anticipated fun of dealing with Pub 537 forms for the life of the loan just makes it that much more exciting!

I can make an educated guess at his military pension and his GS salary. Even with no other debt their ability to borrow on that cash flow tops out at around $275K. That means a down payment would be at least $375K... not impossible but.

 

[nwsteve]

Nord
Another option for structuring that is being used a lot in local market is lease/option to buy. This structure works well when downpayment amounts are a hurdle. Tenants pay a "bumped-up" monthly payment with an agreed amount be "set aside" as downpayment. At some agreed point, the tenant has the option to buy at the previously agreed purchase price. Agreed amounts are credited to downpayment. Financing is by whatever means you wish--personally I would rethink being a banker. Ask yourself if you really want to deal with the hassle of late payments, overseeing timely payment of taxes and insurance and possible (even if remote) foreclosure.
If you go this path, I would get the help of a real estate attorney to make sure all your state's rules are in alignment and keep the surprise quotient low.
One good reason to keep the rental (I am also trying to get ours sold) is that under current rules, rental income does not count when determining what parts of your SS payments are taxable.
Good Luck
Nwsteve

 

[free4now]

Setting price via appraisal sounds like a great idea. As I'm sure you know, appraisers seem to come in several flavors:

1. biased to raise appraised price,
2. biased to lower appraised price, and
3. biased to appraise accurately.

If you're going to both get appraisals, then you want to get #1, because your buyers will go for #2. OTOH if you are going to agree on a single appraiser ahead of time, then you want #3 to make it look as legit as possible to everyone.

I could never imagine loaning 80% LTV. That's just too big a basket for my eggs to rattle around in. But I understand Nords that you have pension income so you are willing to take risks the rest of us can't.

 

[nwsteve]

Nord
Another second for the appraiser. Hitchhiking on Free4now comment, it is important to "instruct" the appraiser what type of appraisal you want. A lending appraisal can legitamately come out different than a FMV.
Fair Market Value in appraiser parlance will only use comp sales from willing buyers and willing sellers within a defined time line. Time is another variable you will want to give your appraiser. What is the FMV for my property if I wanted in sold in 30/60/90 days etc.
Have a third party valuation will make any conversations with your tennants much less emotional and brings a level of clear objectivity to the process
nwsteve

 

[Martha]

Nords, at least you can offset capital losses against the depreciation recapture. The losses are not subject to the dollar limitations when you offset against ordinary income.

 

[W2R]

If it was me (which it's not)...

I would never sell a house to someone who can't come up with his own financing. If he can't get financing, you need to know why. If (as you suspect) his pension and so on isn't enough to qualify, he probably can't afford it and is going to default, good guy or not. So how is this doing a favor for him? You're not in the financing business. Leave it to the experts. Then you can remain on friendly terms with this nice guy that you like so much.

But that's just me! We are very different people (nothing wrong with that!). Actually I am about 100% certain that you are going to go ahead and finance this guy. And I will try not to say "I told you so" if he defaults on you. Really.

Also, I think that if/since you are going to do this, the average-of-two-appraisals method sounds like a good idea.

 

[Nords]

We're going to gently reel in the slack and see what happens. Although they may be first-time homebuyers, he's a smart guy who may already have a realtor or a friend's advice. Who knows, they may think that they're taking advantage of dropping mortgage rates and declining home values to get a bargain out of their clueless landlords. Throw me in that briar patch.

Another option for structuring that is being used a lot in local market is lease/option to buy.

I've read about this, and the author was a big fan because his tenants kept moving out and forfeiting (as agreed in their lease) the money that they'd put toward the down payment. If our tenants are just looking for more security, this might be a good feature of a long-term lease. Of course they could also just ask for a long-term lease, but the equity build might make them feel better.

One good reason to keep the rental (I am also trying to get ours sold) is that under current rules, rental income does not count when determining what parts of your SS payments are taxable.

We actually looked at that a while back with IRA conversions. Spouse and I have a lot of zeros on our earnings record (only 24 years of history) so our SS is too small to move the needle in a deal like this.

Setting price via appraisal sounds like a great idea. As I'm sure you know, appraisers seem to come in several flavors:

... it is important to "instruct" the appraiser what type of appraisal you want. A lending appraisal can legitamately come out different than a FMV.

We're still batting this one around. Spouse brought up the "discount" of not having to pay a realtor's commission, so our current thinking is to set the price at a lower number (admittedly a relative term). They'd be getting an appraisal for their mortgage financing anyway, and even a lower appraisal would show that they were getting a good deal.

If they wanted an appraisal as part of the sales contract then we'd want one of our own for an average, and they'd need to understand that this would probably raise the sale price.

Nords, at least you can offset capital losses against the depreciation recapture. The losses are not subject to the dollar limitations when you offset against ordinary income.

Capital losses sure are easy to come by this year... ideally escrow would close in 2009 and our cap gains would be offset by losses that carried over from 2008.

If it was me (which it's not)...
I would never sell a house to someone who can't come up with his own financing. If he can't get financing, you need to know why. If (as you suspect) his pension and so on isn't enough to qualify, he probably can't afford it and is going to default, good guy or not. So how is this doing a favor for him? You're not in the financing business. Leave it to the experts. Then you can remain on friendly terms with this nice guy that you like so much.
But that's just me! We are very different people (nothing wrong with that!). Actually I am about 100% certain that you are going to go ahead and finance this guy. And I will try not to say "I told you so" if he defaults on you. Really.

Financing is by whatever means you wish--personally I would rethink being a banker. Ask yourself if you really want to deal with the hassle of late payments, overseeing timely payment of taxes and insurance and possible (even if remote) foreclosure.

I could never imagine loaning 80% LTV. That's just too big a basket for my eggs to rattle around in. But I understand Nords that you have pension income so you are willing to take risks the rest of us can't.

W2R, I'd listen to your advice even without your current avatar! And spouse reads the board as well, particularly this thread.

Seller financing is a hassle even without late payments, default, and a foreclosure. Of course that would return us to the status quo, with the possible addition of disgruntled tenants and an eviction proceeding. We've certainly avoided that problem so far.

On the other hand there's the hassle of selling a rental home, with or without tenants. Lost rent, staging, walkthroughs, hustler realtors, open houses, negotiations, courtesy fees... at these prices & percentages it could add up to just as much expense as a foreclosure. At this point I don't see much difference between seller financing and landlording-- same amount of collateral risk and possibly the same substandard risk-adjusted returns when compared to CDs.

Spouse has pointed out that the tenants have already laid all their cards on the table and there's no need to offer seller financing up front. We can easily let them figure out the financing on their own while we try to decide if we want to do extra tax paperwork for the next three decades. I'd hate to let financing kill an otherwise easy deal... I don't enjoy complicated tax returns... we have enough collateral & assets to handle the risk... why ruin a good working relationship by loaning money...

So here's the ball that we volleyed back to their court:

We'd be happy to sell the house!
The 2008 tax assessment is $648,900. Subtracting your half of the savings on a 6% realtor's commission would mean a sales price of $629,000.
We've attached a recent version of the sales contract used by the Hawaii Association of Realtors. We're flexible on title companies, but for our last refinancing we used Title Guaranty. They've reissued our title insurance policy in other refinancings and may be willing to discount that fee with you.

And now we wait to see if a contract comes back. We're going over to the property on Tuesday for its monthly maintenance, so I'm going to wear my scruffiest surfer-bum facial hair and my most raggedy yardwork clothes...

 

[Nords]

Update-- the tenants gave their 30 days' notice.

They're buying a cheaper home with a bigger yard (for their two young boys & baby girl) in our neighborhood. Sounds like a much better deal for them, especially the middle/high schools as their kids get older. The federal govt is paying up to $12K of his moving costs if he executes before April. Good tenants, good people, we wish them well.

Spouse and I had one of those marital-veterans conversations: "Do we want to rent it again or sell?" "I dunno, what do you want to do?"

That question is irrelevant for much of what has to be done-- finish the walkthrough, repair the damage, clean the carpets, detail the windows & bathrooms, settle the security deposit. We've also been wrapping up the last of our long-term projects-- reflective foil & solar fans in the attic, new reflective paint & skylights on the lanai roof, some attic flooring for more storage.

Now we can do the 30th-birthday upgrades-- El Toro zoysia in the entire yard, renovate the master bathroom counters/cabinets/sinks, resurface the second bathroom's tub, replace the lanai carpets. It's probably also time to take a look at part of the siding and some dry-rotted outside window trim. The original garage door is running strong and the ceiling fans are 20 years old but look fine. The appliances are nothing special but have plenty of life left. New ceilings & carpet, all paint less than two years old, new outside fence. 11-year-old shake roof in great shape.

As for selling or renting, I quickly worked through fear, anger, denial, bargaining, and acceptance-- I've been ready to depart the landlord business for a couple years. Spouse came to the same conclusion 20 minutes later. Lots of sweat equity in the place but the profits will heal our sense of loss. If a tenant drops in our laps in the next six weeks then we might be ready to rent, but a year from now we'd probably be cursing our decision not to sell while the selling was good.

The house's annual tax assessment has dropped from $650K to $605K. Rents are also softening but our upgrades will help us hold the line. $599K seems like a good starting FSBO price.

The house has enjoyed 4% average annual appreciation over the last 20 years, admittedly with a huge standard deviation. We've pumped a good bit of equity into it as a residence/rental so I'd have to sort those out to determine our actual ROE.

It's been eight years since our last FSBO. Instead of "traditional" media and weaseling our way into MLS, this time we're going with Craigslist and the military housing websites. We'll reference Zillow.com and have a ton of pix on Photobucket. Oahu's open houses are traditionally Sundays 2-5 and we'll piggyback our signs next to the realtors. The tenant is well connected as a civil servant at a military command. He offered to help find us a new tenant or a buyer (sounds like he has someone in mind) and we're happy to pay them an incentive. We'd also pay a realtor 3% to close a full-price buyer.

We'll probably have the first open house in mid-March. The market is softer but interest rates are putting homes within reach of a lot of buyers and this is a great location to start a family or to enjoy a retirement.

We've done FSBOs before, we're experienced with contractors & repairs, and spouse is an absolute HGTV fanatic. We think we're familiar with the process and the pitfalls. Any new trends or tricks that they don't want you to know?

 

[Martha]

Keep us updated. It has been awhile since anyone I know did a FSBO and I wonder how it will go.

 

[jimnjana]

Good luck with selling your property. My wife and I gave up landlording for good earlier this year. While it was very good to us over the years, we both sleep better at night w/o a rental.

Jim

 

[Nords]

Spouse and I think we're pretty good at this landlording stuff, but we learned a new lesson today.

The house was built in 1979, when a certain style of master bathroom was popular-- single-basin counter with a built-in dressing table on the adjacent wall. Everything's taken a beating over the years, so in our best HGTV manner we decided on new cabinets with a double-basin counter.

The first problem we encountered was timing. Tenants usually give 30 days' notice. Cabinets take 6-8 weeks from the Mainland, brah. Counter installers won't even measure until the cabinets are in-- another two weeks. This doesn't work very well for tenants, let alone buyers.

The second problem was style. Updating that 1970s bathroom with modern materials would result in... 1970s style. Even refacing and new doors would be a waste of time. It'd be like sewing a leisure suit out of modern fabric, and the buyers would probably rip it out and start over again with standalone vanities or pedestals and built-in wall units.

So we made the measurements & got the quotes in case it becomes a negotiating point. Otherwise everything just gets a good cleaning.

As usual, with very little effort we managed to generate a two-page to-do list. In this economy it's been no problem lining up other contractors. The outdoor work will get done in the next two weeks and the indoor stuff will all start on the Monday after the tenants leave, probably finishing with 72 hours. Until then we're spending a couple mornings a week either working on the exterior or getting set up to work on the interior. The house never looks so good as the day you put it on the market.

Whaddya do all day indeed...

 

[Nords]

It's been an interesting couple of weeks.

First, those pesky innovative Nigerians are at it again. If you're looking for a cheap Hawaii vacation rental, but you need to mail a money order to Africa and hire a locksmith, then the deal is too good to be true:
Family loses $2,500 in home rental scam - News - Starbulletin.com
Of course we're using the same military rental website and Craigslist, and now we're going to be driving by the property much more often. Just in case.

Second, we've received a couple Craigslist e-mails begging for more pictures or to loan us money for the closing costs. I guess the posers get my real e-mail address (not just the Craigslist reply-to) and sell it for spam. Or for a really cheap vacation rental.

Third, we're just about caught up on the repairs, which all went far better than expected. (The reason it took so long to get around to them probably has to do with the quality of the surf.) The El Toro zoysia sod looks so good that I wish we'd done it months ago.

Fourth, flat-fee MLS contractors are much more prevalent. We got a $299 offer that seems like a legit deal. Not interested yet since it obligates you to pay a seller's commission to the buyer's realtor, but we'll see how Craigslist & open houses go.

Fifth, we saw an "open house" last week that made us want to swap our shorts & slippers for HAZMAT suits. As we rolled up to the curb, the listing realtor was hauling two huge bags of trash out the front door. The home was 30 years old and everything was original, even the shake roof. It had been trashed by three decades of renters and neglect. Holes in every interior door. Rodent droppings everywhere. Cabinets destroyed. Shattered light fixtures in every room (must've been quite a party). Sewage smells in every bathroom. Never seen white drywall hallway corners blackened by handprints before. No idea why the realtors took the listing. It's a 4BR/2BA that would assess for $600K in average condition. They'll be lucky to get $400K and free immunizations. At least the realtor is smart enough to charge by the hour for cleaning services in addition to their commission.

Our nearly-former tenants are experiencing buyer's remorse. They bought a great fixer-upper in a good neighborhood but now they're dealing with stale cigarette odors, three layers of wallpaper, popcorn ceilings, a 35-year-old kitchen, and 14-year-old (!) carpeting. Oh, and her mother-in-law is visiting on the 25th. The good news is that they're moving out this weekend and we'll have our rental back by the 24th, a few days ahead of schedule. We've done just about all the exterior & attic work that can be done so now we're standing at parade rest with paint brushes, ready to invade the interior.

We've had the home listed both for rent (military website) and for sale (military website & Craigslist). No action on the rental but we're noticing that the other rental listings don't seem to move until after their "available" dates. We'll have a better feel by the end of March. We're still not motivated to rent but if a good-quality military tenant drops into our laps then we could be persuaded to sign a lease. The path of least resistance.

Had an interesting conversation today with a "We buy houses for cash!!" entrepreneur. He trolls Craigslist ads and was hoping for a distressed sale but he realized after talking story that we aren't ignorant or in extremis. (Those are his profit margins.) He hopes to pay 70 cents cash on the dollar or to pay a bit more if the seller takes back paper. He's a one-man circus backed by private investors and his own profits. The good news is that he hoped to persuade us by leaving us a page of comps which included a couple sold listings that we haven't seen yet, so tomorrow we'll be off for more market research. And of course we recommended that he don a HAZMAT suit and visit the nice fixer-upper across the neighborhood.

We'll see what happens on 1 March, or after we stick the FSBO sign in the front yard…

 

[Martha]

Cute house. I'd live there.

I wonder if fixer-uppers will be getting more popular. A way to get into a house for less money. Every place we bought was a fixer-upper.

I heard on Science Friday that you should never buy a house that had smokers. Maybe a bit extreme, but I think you would end up having to Bin or Kilz all the walls, scrape all popcorn, and replace all carpeting.

 

[deserat]

Ahh, Nords, I'm so glad I sold my house in CA when I moved - my husband did a lot of the work but I remember when I came back from Germany last time all the work I had to do to get it back in shape - the tenants had broken the rules and smoked a bit inside and had a cat.....took awhile to clean it up - they also ruined some of the blinds, trashed the vinyl in the kitchen, stole some closet doors () - oh and didn't pay for the last few months' rent. Being a landlord overseas *s**cked*.

What's amazing is the timing - although I didn't sell at the high point, I believe the current owners might be upside down now or underwater in their loan - and I managed to escape CA, although as I said on another thread, I might get the worthless IOU
As samclem said, beautiful place, but not conducive to independent hard-working people getting ahead.

Good luck - I hope you sell it and can invest the proceeds - at least it's keeping you busy right now (what do you guys do all day? ;-))

B

 

[Nords]

Cute house. I'd live there.

That can be arranged!!

 

[Rambler]

Got a link so we can view the listing? I think we could live there too, with DD going to school on Oahu. We've been giving thought to living in Hawaii a few months of the year, maybe renting out when we are in Cali (or Tokyo).

R

 

[samclem]

Looks like you've got things well in hand--I'm living the great adventure vicariously through you.

I had good luck when I did seller financing one time. The guy had a recent divorce and trashed credit (due to the former wife, says he). But he had a steady job and could put 20% down. It worked out great, and he got a conventional loan a few years later (at my suggestion). There will be a lot of folks out there with damaged credit right now, but if you can get a sufficient down payment you might find it worth your while to take some paper for a few years. If prices go back through the roof you might be hoping the buyer defaults and you get the place back.

 

[Nords]

Got a link so we can view the listing? I think we could live there too, with DD going to school on Oahu. We've been giving thought to living in Hawaii a few months of the year, maybe renting out when we are in Cali (or Tokyo).

2273 sq ft 4BR/2BA single-level home with screened lanai & fenced yard

It's an hour's drive to UH, but it's only 15 minutes from LCC and UH West Oahu.

But he had a steady job and could put 20% down. It worked out great, and he got a conventional loan a few years later (at my suggestion). There will be a lot of folks out there with damaged credit right now, but if you can get a sufficient down payment you might find it worth your while to take some paper for a few years. If prices go back through the roof you might be hoping the buyer defaults and you get the place back.

Spouse is thinking clean break, but I think a CD-like return secured by a first lien can be a good deal. (It certainly keeps me from chasing after small-cap stocks or more Berkshire Hathaway.) I guess it all depends on the "buyer" and their credit check.

We spent an hour Friday driving the neighborhood sales and current listings. Oddly we didn't see a single "for sale" sign at any of the places that have been on the market for more than 30 days. But from the dozen or so that are even remotely close to our listing, it's more than fairly priced. Should be an interesting open-house Sunday.

 

[Rambler]

Thanks Nords.

DD is going to be in Laie, BYUH and intending to work p/t at PCC. Don't know that we'd buy in the Laie area though, considering the longer term. We intend to be in Honolulu towards the end of March, may drive by to take a peek at the neighborhood if it hasn't sold by then. Will PM you before we fly over.

R

 

[Nords]

DD is going to be in Laie, BYUH and intending to work p/t at PCC. Don't know that we'd buy in the Laie area though, considering the longer term. We intend to be in Honolulu towards the end of March, may drive by to take a peek at the neighborhood if it hasn't sold by then. Will PM you before we fly over.

Sounds good. Nice school, and I'm impressed with the scholarship work they do at PCC. Except for the fire-knife competitors... I'm not too sure about those guys.

Around Oahu, however, Laie is considered one heckuva drive from Waipio Gentry. At least 45 minutes and more likely over an hour. The "good" news is that you could drive H-1, H-2, and H-3 both ways...

 

[Nords]

Looks like we're going to rent the place again. (http://www.early-retirement.org/forums/showpost.php?p=795715&postcount=21) The new tenants are coming over next Wednesday to sign a lease and start unloading their truck. We never even stuck a FSBO sign in the yard, and next week would've been our first open house.

I think we did more minor maintenance & upgrades on this place in three weeks than I've done in some shipyards in a month. We even got to leak-check the attic during a torrential downpour (three inches in an hour), where we discovered a couple nasty little drips. One has been coming in around the gas water heater's exhaust pipe for at least 12 years. The drips drilled a little quarter-inch hole through the drywall ceiling into the master bedroom-- luckily onto a high closet shelf where no one noticed it. But I bet the previous tenant and my mother-in-law were wondering what made those funny stains on some of their clothes or shoes.

The roofer's the same guy who put in the solar exhaust fans a couple weeks ago. Both fans seemed to have condensation drips under their photovoltaic panels, which plopped through the fan blades to make shallow puddles on the ceiling drywall. I'm not sure if there's a fix for that, other than putting a couple sheets of plywood under the splash zone to absorb the water and dry out. Plenty of ventilation in the attic now, so no mold or mildew concerns.

We did decide to reface the cabinets in both bathrooms and upgrade to RTF doors/drawers. But we'll start on that next month and do the install on tenant time. The nice thing about the project is that we'll get new doors with the hinges already installed and the templates ready to be drilled into the existing cabinets. And although the style will still be 30 years old, at least it'll look good for another 20.

Anyway we're almost at the end of our two-page punchlist, and Monday morning I'll be setting up the utilities to transfer to the tenants...