All Forum Posts by: Marcus Auerbach

Thanks Brian. Just outside Milwaukee and I already have built a new home for me. Market rent is hard to pin down for this type of property, there are barley any comps, but I would say in the 0.7% range. 3k are on the easy side, but I've been looking at this in combination with the non refundable option money. Financing the option opens up a whole new  can of worms, no appetite to even print out Dodd Frank ;-) 

I was going to keep keep the contracts separate, a standard lease and a WB24. My issue is that I am going to make it harder to myself to obtain financing for rental properties as long as I carry two large mortgages on two primary homes, plus I cant access my equity. I thought about a wrap, but I guess it's easier to evict than foreclose. Thoughts? 

I am at a decision point and would appreciate your thoughts (I am so glad I am a bigger pockets member right now): I have a home on ten acres for sale. It has been a three year / 200k fix and it is set up for horses. If the house would have been in a subdivision it would have sold a long time ago, but there are only so many people interested in a horse property. Showings have been rare and we have not seen a single offer, so we kept lowering the price from 625 to now 550. The house gets excellent feedback and Its a good deal at this price, but it needs a special buyer I guess. (I had people complain about the size of the yard - too big). I also have bought a new home last winter and really would like to move at some point and take the equity of my old home.

By chance I found a buyer, he happens to be a real estate investor, who is interested, but cant get a 30 year loan at this point. The story: C-corp, small W2, waiting for next tax return. We agreed on a 6 month lease option, with 3k rent and 5k monthly (!) option money. I asked him to get a bank pre-approval, and that seems to be an issue, because he came back and asked for 18 months.

While I am inclined to consider the request (at 3+5k monthly) my problem will be that I will not be able to obtain another 30 year mortgage, because of my own debt/income ratio. I should mention that I am a fast growing buy&hold guy and also my bank wants to see a full year worth of taxes before they are willing to acknowledge the additional income. So, I am limited to 5 year ARMs..

I like 18 months better than 12, because it would put the end of the terms into spring and not fall, so asking for 12 month would no serve me that well.

Though nut to crack... Would really appreciate your thoughts guys! 

Good point Steve. Thanks guys.

I have never had a pool table on my own and yesterday one of my tenants asked me if it was ok to install one in the basement of a SF. I dont see an issue, as long as the take it with them when they move out. I have seen a few pool tables left behind in forclosures, like a broken piano, nobody wants it and its hard to move. Would appreciate your thoughts. Any red flags anyone?

Ryan, be careful with making asumptions about people you know from a different area other than professional. He might be a nice guy at church, butmay or may not be a good contractor. Never contract anyone without speaking to previous clients, preferably investors. And, even then be prepared for the worst: have them sign your contract, not theirs, have a detailed scope of work and never pay ahead. I even go and buy materials together with a new contractor instead of giving them money, it also helps also to get a mutual understanding of how you want things done and the quality you expect, it reflects in your choice of materials. As far as your job, it can be done no problem, just make sure you are at the job every morning and every other lunch break. Also spend some time the after work and do some clean up. Your contractor will appreciate that and you will see things you will want to discuss next day morning. It's a though program, but usually the majority of the work gets done within 3 - 5 weeks, so its a managable period and hoepfully your family understands that. After a few houses you will find yourself being a little bit less involved and it works pretty well with a reasonable amount of time invested before and after work. A final word: dont even think about taking on some of the work yourself! It seems like everyone is tempted to try that at some point and we all arrive at the same conclusion - totally not worth your most precious ressource, your time. Good luck!

Trotnow Construction does a good job and has reasonable priceing, you just have to make sure that he finishes the job all at once, the guy gets side tracked..

Oh boy, I have the same dilemma all the time, although it seems a lot easier to give advise on someone else's project...

I would leave the color of the siding, pressure washing and some fresh caulk will go a long way. The siding works with the roof - that's quite important, I have found out the hard way. My contractor (at the time, don't hire that guy) ordered shingles in a different color. Later I found out that he had paint left that would have worked with the roof and he wanted to give me a great deal. So instead of a nice dark brown warm looking roof with tan siding it's now grey/blue. Also, I have noticed that not all grey roofs will go with tan siding, some have a little bit of a green or blue in them and that looks weird with a siding that has too warm of a color.

OK, I am getting side tracked, when I show homes, it seems that people don't care too much about the exterior color, especially not in this price bracket. Kitchens and bathrooms sell houses, this is where I would focus the money. I think by the time your buyers have seen the house, walked through the front door and have seen the inside, the kitchen, etc.. they will pretty much know if they like it or not. I don't think the exterior on the backside is a major consideration at that point. And if it is, you can always offer to paint before closing.

Thanks Darren, sounds like the way to go. Just got the text from my heat guy, he estimateds $4500 to put in a forced air system, because of all the ductwork. But now that I think about it the house must have ductwork to run the AC, I cant imagine it cools the baseboards?? He said its better to rip it out because of all the maintenance issues. What is he talking about?

Something new with every house: I have a 1300 sft ranch under contract that needs major work and it also happens to have hydronic heating. The heat source seems old and I will replace it, which I normally do with the forced air systems anyway, but now the question is stay with hydronic or convert the house to forced air? I guess I would have to patch up the HWF and install all the ductwork in the basement. The house also had AC (got vandalized), but I think I have to go back and look how that even works with a hydronic system. Does anyone have experience with this?? Thanks guys.

I am wrestling with the same question: my rental houses are typically 50 years old and I spend about 25k for a complete makeover. Sanding and staining is not a commercially viable option - too much labor involved for the value of a non-historic 3/2 ranch, so we usually try to clean the trim up and use a good wipe-on polyurethane to reseal them. If we refinish the floors we replace the quarter rounds. We do the same with the hollow core doors and the window trim, to keep everything in the same look and finish. The result is a clean house with trim that can be wiped down wet if necessary. But of course you can still see imperfections sealed into the poly. So the last house we tried painting the trim white. Now, to keep the uniform look you have to spray also all the room and closet doors white. And to get really nice results you need to sand, fill, sand more and prep everything nicely before you spray the two coats. In the end I was tempted to also replace the hardware, because after all the time and money we had spent the hinges the doorknobs looked old on those new looking white doors. Bottom line for me is that it's totally not worth it. Either its good enough and cleans up or if its past that point of revival then the only option is to take 100% trims and doors out and replace with new quality stuff. That's the most expensive option, but it will look nice again for the next 50 years. At least that's what I hope ;-)