Out of capital and repairs are needed, please advise! Pittsburgh

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Out of capital and repairs are needed, please advise! Pittsburgh

Shivron Sugrim
Member since 2021 · 1 post · 0 votes

I am seeking advice.

I recently purchased my first house with a 5% downpayment. My goal was to occupy one of the 4 bedrooms and rent out the other 3 to room mates. I purchased this house knowing that the roof needed to be replaced. The house is a bit older and needs a face lift, it appraised at 170k at the condition that it was in. The sellers agreed to lower the buying price to 162k, which I felt was fair. 

Now that I'm in the house, I'm repairing and remodeling the kitchen, bathrooms, paint jobs, etc. I expected about 15k in repairs total.
I am requesting quotes for a roof, and every company is quoting me 20k! They're saying there are 4 layers of shingles on the roof. 


I'm out of capital and don't know what to do. Any advice is welcome. I realize this was a completely stupid mistake on my end. My buyers agent said I might be able to squeeze a few years out of this roof, but now I hate him for saying it, he was just trying to sell me a house.

I'm in Pittsburgh, if any experienced investors would like to contact me to talk about your story and mistakes, lets talk!

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Jon KellyPro Member
Investor · Bethlehem, PA · Member since 2016 · 929 posts · 951 votes
5y

@Shivron Sugrim if the roof isn't leaking then wait a bit longer to build up some reserves. You can consider a short-term loan from hard or private money to cover the cost of the roof. Your property should appraise much higher after completing repairs inside and replacing the roof. You can refinance, pull money out and repay your short-term loan. 

"Every company is quoting $20k..." how many companies have you reached out to? I'd try a few others, but $20k may be the right price. 

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  • Austin F.
    Investor · MI · Member since 2015 · 227 posts · 478 votes
    5y

    Is the roof leaking? It would take a lot for water to penetrate 4 layers of roofing material. 

    If the roof isn't leaking into the house at all you may be able to put it off. While this isn't the best choice, it may be the most practical/only choice. If you can raise enough capital over the winter to cover the repair (and get on the schedule with a reputable company) it may be a risk worth taking. 

    I did a roof with 4 layers on it a few years ago and it sucked big time. I would be ready for there to be extra costs involved.

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  • Rex Petersen
    Investor · Pittsburgh, PA · Member since 2021 · 39 posts · 50 votes
    5y

    Just curious... why are there 4 layers of roofing?  Is that from people layering over leaks/issues over the years rather than replacing the whole roof?  Or was 4-layer roofing something that was once done in the area?

    Shivron, it's challenging where our money doesn't stretch as far as we hoped and we all underestimate some costs, good learning for the future to keep a little buffer.   I agree with Austin if it's not leaking yet you can work on saving up some money for the repair, but I'm guessing from your post that you feel it's more urgent than that.

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  • Jon KellyPro Member
    Investor · Bethlehem, PA · Member since 2016 · 929 posts · 951 votes
    5y

    @Shivron Sugrim if the roof isn't leaking then wait a bit longer to build up some reserves. You can consider a short-term loan from hard or private money to cover the cost of the roof. Your property should appraise much higher after completing repairs inside and replacing the roof. You can refinance, pull money out and repay your short-term loan. 

    "Every company is quoting $20k..." how many companies have you reached out to? I'd try a few others, but $20k may be the right price. 

    1Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    5y
    Originally posted by @Jon Kelly:

    @Shivron Sugrim if the roof isn't leaking then wait a bit longer to build up some reserves. You can consider a short-term loan from hard or private money to cover the cost of the roof. Your property should appraise much higher after completing repairs inside and replacing the roof. You can refinance, pull money out and repay your short-term loan. 

    "Every company is quoting $20k..." how many companies have you reached out to? I'd try a few others, but $20k may be the right price. 

    HML ers 99% of the time will not loan to an owner occ situation like this.. this is friends family and or CC project.

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  • Jon KellyPro Member
    Investor · Bethlehem, PA · Member since 2016 · 929 posts · 951 votes
    5y

    @Jay Hinrichs I agree. It will be challenging for HML due to owner occupant and the small size of the loan. However, I'd exhaust all financing options before you're left putting buckets in the top floor of the property to catch the rain water coming in :)

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    5y
    Originally posted by @Jon Kelly:

    @Jay Hinrichs I agree. It will be challenging for HML due to owner occupant and the small size of the loan. However, I'd exhaust all financing options before you're left putting buckets in the top floor of the property to catch the rain water coming in :)

    I get it but one must deal with reality and NO HML makes a loan on a owner occ its against the law for them since most are not licensed for owner occ loans.. there are the rare exceptions there are lenders in SOCAL> that are HML that have the proper license and underwriting.

    So just say in   why waste time talking to lenders that are not going to make the loan based on as you state too small and owner occ.

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  • Scott Mac
    Austin, TX · Member since 2019 · 5k+ posts · 5k+ votes
    5y

    Hi Shivron,

    If you exhaust all other options you could buy a $40 shingle scraper and remove the shingles yourself.

    You would probably have to rent a trailer to haul them off to the dump if you don't have a pickup truck.

    That and a home depot card for some new shingles and etc..., plus a few YouTube videos you might be able to self-roof the place.

    It's not Rocket Science.

    If it's tar or membrane it will probably take a professional to do it though.

    But if it's just shingles, many people do that themselves.

    Plus i'm surprised they made a loan with 4 layers of shingles, and in such bad shape (if they are shingles).

    Good Luck!

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  • Daniel Seigel
    Rental Property Investor · Pittsburgh, PA · Member since 2008 · 16 posts · 13 votes
    5y

    Shivron, It would be helpful to know the size and pitch of your roof as well as the number of peaks and valleys to be able to judge if $20k is the right number or not.  You can likely find an independent roofer who can likely do it for less than what you've been quoted but if it has a lot of peaks and valleys, it always adds to the cost.  In which neighborhood is the house located?  Getting someone who has the time available is going to be the hard part.  That's why the costs are so high as well since they can be picky and only take the jobs where customers are not price sensitive.

    It's been pretty tough with contractors these days no matter the type.  They have to pay people more to keep them and material costs have gone way up.  When I'm calculating repairs today I estimate what I think it should cost in 2019, then add 50% and hope I can find someone at that price.  If it's double the 2019 price, then I know I'm probably paying too much.

    One other thought.  There are a few home warranty companies that cover roofs as long as your are an owner occupant, which you are.  They won't cover anything pre-existing, so if its already leaking, they will deny the coverage.  But if you are only worried about it leaking in the near future, you can buy a home warrant less than $1000 per year.  Just make sure that the roof would be covered as most do not cover roofs.  That way if it starts to leak in the spring, you may have a small deductible, but the warranty company will pay for the roof.

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  • Jim K.
    Handyman · Pittsburgh, PA · Member since 2018 · 5k+ posts · 13k+ votes
    5y

    @Shivron Sugrim

    The self-help option is going to be the way to go, at least for the foreseable future Shivron. Please contact me.

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  • Jeremy TaggartBusiness Member
    Real Estate Agent · Pittsburgh, PA · Member since 2014 · 850 posts · 647 votes
    5y

    @Shivron Sugrim I utilized no interest for 12-15 month credit cards when I was first getting started. Put the repairs/rehab on those then worked on paying them off over the course of the next year. Use the money you get from renting out the other bedrooms to help pay them down. Get a side hustle if you have spare time outside of your job. Also if you are even somewhat handy DIY'ing is the way to go if you have the time on the first few properties. 

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  • Genny Li
    Baltimore, MD · Member since 2018 · 432 posts · 281 votes
    5y

    Look into the really huge groups for the best rates. If Power Home Remodeling is there, check out their quotes. The biggest companies can roof a house for the price of the supplies if you go to a hardware store because of volume. They're bad for small projects but good for complete roofs. Power specifically has a terrible quote process and underbids a good bit. Bad for them, potentially good for you.  (I got underbid by like $5k on a Power project and I explicitly brought to their attention all the expensive stuff they seemed not to be taking into account, but they brushed it aside. They honored their price, but I think someone got fired over that.....)

    Many of the big guys also do financing at really good rates, if needed. Get some people in the door and start pulling some income. 

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