All Forum Posts by: Alex L.

 Oh good lord, I would have thrown a fit if this were one of my properties. Then again, there are a lot of things I would have done differently. Regardless, that ceiling fan patch job is atrocious. 

Re: mechanic's lien, the wording about exactly who can file a mechanic's lien in Ohio doesn't specify whether or not someone has to be licensed. Besides, not all contractors require licensing in Ohio. For example, roofers don't need to be licensed at the state level (city or county requirements might differ), and they can certainly put a lien on your property. I think the biggest concern is whether or not the amount of money due is worth filing for. Not necessarily a mechanic lien, but I know in some states, filing for something like small claims can be somewhat pricey. In Ohio, it's relatively cheap, like under $45 in most counties, so keep that in mind... less of a barrier for them to come after you if they want to.

From your post history, I'm assuming this is the property that you're interested in cash out refinancing. With that in mind, why on earth paint the floors? Why not sand and redo them as they're supposed to be, or maybe even tenant-proof the place with some good quality LVP? Surely the place would appraise higher, and you'll end up paying less in ongoing maintenance from having to repaint the floors. Not to mention you'd likely attract better quality tenants. Now would be the time to make major upgrades prior to refinancing, rather than later. 

I'm curious... if you already paid them 50%, and owe them $800, then logically that means whatever renovation they were completing for you, they were charging $1600 for what I'm assuming is labor only. What sort of renovation were you having done for that kind of labor price? If it's something extensive, like a full kitchen or bath remodel, then I would have been wary of that contractor from the beginning... especially being out of state. Not saying $1600 isn't a fair price for certain things, but if you're doing a major rehab project with the expectation of having the place professionally appraised afterwards for refinance purposes, then you really want to be careful not to have just any Tom, Dick, or Harry in there. 

As for a solution to your issue: it sucks, but sometimes it's necessary to have tough conversations. Speak to the contractor and tell them that there are some items that were completed subpar or incorrectly, and that you'd be happy to pay what's due once the issues are rectified. Make sure you can show them photos of what the problems are, and tell them exactly what you're looking to have done to meet your specifications. Another downside of having cheaper contractors is that a lot of the time, you have to play the General Contractor role and stand over their shoulders because they don't even know what the hell they should be doing. For example, had a small-time cheap floor guy lay some LVP for me... genius didn't undercut the door jambs because I didn't specify, and also didn't use the underlayment which was required in the instructions since it's a concrete subfloor. Well, guess who had to tell them to redo the entire floor if they wanted to get paid. 

 Thanks, but actually you sort of rendered my statement incorrect. 

Obviously it's subjective what some people consider to be "some" or a "very little" amount of money, but I would imagine most wouldn't say that a range of $50,000 to $500,000 USD worth of crypto fit those descriptions. Of course there are outliers, some who hold less or more, but you might be surprised to know that I most regularly come across accounts that had somewhere between $60k and $200k. Maybe you aren't.

Next time, perhaps consider adding a statement of your own rather than trying to alter someone else's which is based on their personal experience. As I mentioned in my previous post, it is my job to open and monitor these types of accounts. 

 I've rehabbed a few older properties with wall paneling that didn't have drywall beneath them -- just plain studs. And even if there is drywall beneath, depending on how the paneling was applied (particularly glue), remediation might be a hell of a job. Might not even be much of a cost difference in skim-coating the damaged drywall vs putting new stuff up, which is what my recent dilemma was on a current rehab that I ripped all the ugly, painted paneling out of.

If either of those issues are at play here, I'd personally just take it all down and put up fresh new drywall, especially if you're using the BRRRR method. Drywall really isn't that expensive (labor prices may vary) and the house will look nicer, which should help a bit with the appraisal price, and better to get this project done out of the way now rather than later after refinancing. Hopefully the paneling wasn't glued on though, and it comes down easily with drywall behind it that's in good shape. Would save a lot of time and money.

If BRRRR weren't in the equation, then I wouldn't be against leaving it since it doesn't look awful from the pictures, but I'm sure it might look a lot different in person.

Most people who use these forums assumes that crypto and real estate attract two completely different investing crowds, but as an RE investor myself who also works in the crypto-banking industry, they're incorrect.

There a lot of real estate investment companies (typically single or family run LLCs) that invest heavily in Bitcoin/Ethereum/etc. I know this because I'm the one who reviews their financials and legal documents when they open accounts, and also reviews their ongoing transactions. They park rental income or other money meant to help fund purchases/repairs in the form of crypto, in turn making a decent amount from the earned interest that they could turn around and exchange for USD (common), or transfer to other RE investors for property purchases/sales (rare). Well, there were a lot more of these companies doing this last year than currently, as most of the major crypto companies and exchanges have imploded. Still, there are a lot of RE investors who put a lot of their faith in crypto, many who are dabbling with more risky decentralized investing, while others are waiting for a particular bank or two which I can't name to offer up crypto custody services.

As for what it means for real estate... very little, in my opinion. I do think it may (and likely already has) drive crypto investors to look towards RE investing instead. The RE market goes so much deeper than crypto does, and even if there are a few thousand RE LLCs that invest their funds in crypto, they're a drop in the bucket, and RE is by and far primarily paid for via currency, not cryptocurrency. 

Took me about three years because I was just starting out on a $30k salary... then I bought two SFH's within the span of three months because they were on the same street, which meant nice and easy to keep track of for me. I also like the style of house. I know a lot of people will tell you to focus on MF rather than SFH, but (1) like you mentioned, there are only so many MF deals to go around, and (2) not only does it depend on your available market, but it depends on your particular investment strategy and interests.

I prefer SFHs for three reasons: the first reason is kind of silly so it's not worth mentioning; the second is because I prefer to purchase properties in cash outright when I can, and decent SFHs are cheaper than MFs in my area; and the third is because my exit strategy is to sell the homes to tenants and would-be homeowners, not other investors, when I'm ready to call it quits.

You as the landlord can't (or rather shouldn't) be added to the renter's policy as an additional insured party because the insurance policy is not yours. The insured is who is covered by the policy -- in this situation, the renter is the insured, and the policy covers their liability exposure (in this situation, the liability exposure is renting your property). You as the landlord should be listed as an "interested party," which is exactly what it sounds like -- someone who has an interest in the policy. This should allow you to receive a copy of the policy and any information relating to it. Whether or not you'd be notified if the tenant stops paying the premium, however, is dependent upon the insurance company's notification procedures, and you'll have to ask them directly how they work for interested parties.

It doesn't sound like you're missing anything in your particular example, along with Josh's additional info, if those are the numbers you're working with. If the median household income is $37k, and you're bringing in $65k as a FT PM working on your own (or $32.5k if you've got an employee that you're paying 1/2 that to), then that sounds about right. So, you would indeed be making a profit owning your own PM company... and as an individual, you'd perhaps even be above the bar for the median household income of $37k. Obviously this is a very simplified example that isn't taken into account taxes and other expenses, plus some PMs often charge additional fees for certain things that would ultimately increase your pay (fees for drafting leases, fees for handling turnovers, etc). Regardless, your earning potential is going to be limited to your particular market, so if that's not enough profit for you, then you'll have to find a way manage properties with higher rents.

I have very little CC debt (0% interest), and most of my debt is in the form of two separate HELOCs totaling $50k which I've been using for rehabs and (stupidly) remodeling my own house. I'm not sure what the truth is re: HELOC utilization and whether or not it affects credit scores, but I do know that every month I make a $1,000 payment to pay down the outstanding HELOC debt, my FICO credit score bounces up a tick. And also, whenever I use the HELOC for a sizable amount at once (i.e. using $20k to purchase a property) my FICO credit score dropped like a stone... then slowly began to tick back up as I made those big payments. As for the other credit scores, not sure since I don't see those ones as regularly... FICO I see it monthly in my banking apps.

Perhaps it's not the HELOC utilization rate itself, but the utilization rate of your total credit overall (if you're near maxing out your HELOC, you're probably utilizing a high amount of your overall available credit). But, again, who the hell knows for sure.

Talk to an (independent) insurance agent who is familiar with real estate investment insurance. 

When I first got in the game not too long ago, I had 1 SFH. I've worked in insurance for about 5 years (personal lines, not commercial) so I knew that I could either (a) get a standard homeowner's policy with a rental rider, or (b) get a dwelling fire policy, which is what most professional landlords get (the major difference is whether or not the contents of the home are insured). So, I go a dwelling policy for the ACV of the property, and the cheapest I found was for $510/year through Foremost by using a local run-of-the-mill independent agent. The ACV limit was $65k, and I had bought the house for $18k, so I was comfortable simply taking the $65k and walking away if the house god forbid burnt down.

Then I started getting more serious about real estate investing, and bought two more SFHs at the same time. Called up the agent's office, was quoted for $700/yr and $650/yr for both houses, which would give them their own dwelling fire policies. I bit the bullet and paid the price, the ACV limit was for $50k for each property, and I paid $22k and $25k so no big deal. But then about two weeks later I joined a local real estate FB group, and learned about everyone's go-to insurance agency in the area. Gave them a call, told them my situation, and they put me together a business policy. It was a single policy for a business ("Description: LANDLORD, Type: individual/sole proprietor") that included all 3 properties, had all the previous coverage I had including increased liability limits AND ACV values by about 55%, and the cost? Just $620/yr through American National.

I'm not sure if you can get a business policy for just a single rental... I don't see why you couldn't, but again, my personal in depth experience with insurance is personal lines, not commercial. Either way, definitely see which agents in your area are landlord-friendly. It pays to look around. In my case, it saved me over $1200/yr.