All Forum Posts by: Alex Wesling

I love all this. 

Few things from my perspective

1.) Furnaces last longer with routine maintenance further than 25 years. 
2.) Most of these repairs seem easy but aren’t and when you dealing something that is omitting carbon monoxide it’s better to leave to the professionals

3.). We have been replacing a lot of our units due to the fact they are 15+ years and we have no maintenance records and going off suggestions from our HVAC. We now have them come semi annually to do routine maintenance so we can get the 25+ years out of it

4.) both octopus furnaces we have replaced were both wrapped in asbestos so replacing them was best for the safety of the property

I would also suggest when talking to HVAC reps to ask if they are commission based or not, that’s a good indicator as well 

if you have the means to be a self fixer that’s great but not sure it’s always the best and easiest approach 

Hey folks

we have been buying houses and doing brrrr and has some questions around taxes

We are spending around 25-30 on each house but was curious if this all falls under capital improvements or do you class it as repairs and do immediate deductions

I know new roof and appliances are typically depreciated but what about a shower that has mold stains in it that we replaced. A toilet that was cracked that we replaced. Kitchen cabinets that were broken that were replaced. Etc. 

Thank you BP team

 If you plan to put 20% down then yes. If you plan to buy and do a cash out with management fees it will be minimal just make sure accounting for the other “hidden” expenses of management fees capex, and vacancy 

Jason I would say there is more room in the deal. Maybe think of doing it as a flip, use those proceeds to fund the next deal. If you are doing a hard money loan to do the fix you may eat into a lot of your margin so I would make sure to do the due diligence of the area on what “rehabbed” houses look like. If normal rent in your area is 1200 and you have that high of a Reno also look into seeing if higher quality homes rent higher and if not maybe consider downgrading the enhancements to the property. We buy pallets of VPF at a time and end up paying 89 cents a sq for flooring rather than using a higher quality product. We use the same flooring in all the houses. So if something comes up we have the supplies and ability to flip out flooring as needed. I agree 70 a month is a little light but doesn’t mean the deal is dead. Also remember if you are going to run on lower margins scale is key.  

Make sure you're looking at holding cost. If you hit a HML you'll need to understand the loan rates you get from HMl and then conversion to a conventional loan. Also your cost associated with holding (utilities paid by landlord or tenants, taxes). Also you'll need to check with local ordinance if converting to boarding house is legal and steps needed to do so (you don't want to pay assuming those numbers to only be told you can't do it)

you hml money you can roll into your conventional loan but you’ll need to understand the scope of time from the Gc to make sure it’s feasible
 

We use RentRedi. It’s easy to add/delete charges. Tenants can deposit via checking or credit card. I will say though the tenant typically has to have the account with the funds 48-72 hours after initiating the payment. It doesn’t pull right away when they submit payment via etf. Great system and easy to use.  Platform works online and via app. Fairly priced for yearly version (we pay 150 with 23 doors)

I use rent redi. You can build out customized pre application questionnaires.  It’s great for getting an idea on a prospective tenant without fees Charging an app fee is normal and common with prospective tenants. The process also weeds out people that suck and know they suck so won’t pay the app fee. ALWAYS be concerned with yourself. You already did all the work making a habitable home for rent. Lot of turds out there. You wanna make sure you find the right one. Also agree with Bjorn. Brandon’s book is great and helpful in making sure your set yourself up for success