All Forum Posts by: Alan Pederson

Not sure where this person got the idea but it wasn't good. I think it was some type of laminate. It probably looked good when it was installed but one Texas summer and now it's all wavy. I laugh every time I drive by it.

We just replaced an A/C unit in one house and that costs about $5k. It was an old unit and I knew I would have to replace it when we bought the house 3 years ago. The big expenses you need to look out for are the roof, A/C unit, and water heater. I do most of the repairs to the houses we own so I've gotten pretty good at figuring out how much things are going to cost. We updated both bathrooms in one house. The hall bathroom needed a complete tear out and all new going back in. That one was about $4k. The master bathroom I completely re-did the shower area and textured the ceiling of the entire bathroom and that one costs around $6k.

There is a house near one of my rent houses and the owner used vinyl flooring for fence material. It kind of melted and is all wavy looking. Unless the material you're going to use is rated for exterior use, I wouldn't do it.  

Better call Sol.

We've bought 2 house that had to have new roofs installed. This came up during the inspection and both times the mortgage company and the insurance company would not move forward until the new roof was installed. One had lots of hail damage and the other one was 30 years old and had excessive granular loss (you could barely see any rock left on the shingles). Neither one leaked but they wouldn't insure either one in their current condition. One seller claimed it on their insurance and ended up getting roof installed for no cost to them. The other had to bite the bullet and spend $5-6k because it was just old and worn out. They tried to get me to pay half of the cost and I refused. I told their agent that they should have replaced the roof years ago because of how bad it was and they wouldn't be able to sell the house to anyone other than a cash buyer in it's condition. They replaced the roof and it almost made up for all the money I had to pour into the house to fix all the stuff the sellers Jerry rigged over the past 30 years.

I agree with Rodney. Just bite the bullet and realize that they are probably nervous about buying their first house and want to make sure they're not getting taken. There were so many things I didn't think to look at when I bought my first house that when I bought the next one I was a lot more vigilant. After buying several, I feel experienced but I still miss stuff even though we get an inspection every time. I've gotten burned twice now on broken sewage pipes. The first time I didn't know any better ($8k repair) and the last time I trusted the people we were buying the house from ($2k repair). Every house I buy from now on will have a camera inspection of the sewer lines before I buy it.

Move to a better area?

I put together an Excel spreadsheet for each property and I use a numbering system to mark each receipt. The number on the receipt matches the number on my spreadsheet entry. My CPA loves it. I keep hard copies of the receipts but at the end of the year I just turn in the spreadsheets and a large vanilla folder that contains the receipts in case he wants to look at anything. I have a separate sheet and folder for each property. It's pretty easy to keep up with.

I used to do things just on paper but after we bought the second house I could see that I needed a better way to get organized.

You'll need enough for the 20% down, closing costs, repairs, plus reserves. You never know when a major repair is going to happen so having plenty of reserves is crucial. We just had an AC system go out in one house and it cost us $5k to replace. In the past 2 weeks, we paid out $500 to have my truck fixed, $350 to have my wife's car fixed, $5,000 for AC system for rent house, and $2,000 to have our shower remodeled (I did the work). We planned on the shower expense, the rest was a surprise.

You can type of an addendum that would extend your current lease for 6 months or convert them over to a month to month lease.