All Forum Posts by: Allyson Straka

Sorry, I hit enter and it posted my discussion, so I know that there is a misspelled word, but I was not able to edit or delete it. 

 My husband and I have a total rehab project under contract. The building was an old dry cleaners that we are looking to turn into 6 residential, 1 commercial space. We have a few rental properties, and all of them had some level of distress, but this will by far be the biggest project yet. We are unsure of what questions to ask an architects, or really what to look for when selecting one for our project. Any advice about this would be very much appreciated. 

Thanks everyone for the replies. It is good to know that the 60 days to fix any problems is standard. Once all the problems are fixed in that 60 day, does our premium go down? Since we felt that the insurance price was a little higher than what others were telling us it should be, we thought maybe needing repairs was the problem. Or do we need to wait a year until the insurance renewal to get a premium that reflects all the fixed problems. 

Also many companies have said that they would not insure us as all. The place is not in bad shape and is definitely in livable condition. We were unsure as to why it was so hard to even get companies to insure the property. 

Hello everyone,

We are currently under agreement on our first property and we have a question about getting insurance. The property is a duplex in which we will be living in the bottom and renting out the top. We are buying the property as-is, so some repairs are needed. When we were looking for insurance quotes, the fact that the property needs some repairs is making it difficult to insure. For example, one insurance agent had an issue with a broken window. We feel that this is a non-issue being that we will be fixing the window right away. Another insurance agent said that if everything was not fixed in two months, we would potentially be dropped from our policy. 

We know that other investors are buying properties in need of repair. We were wondering how people are getting reasonable insurance quotes on them. Are we going about this process wrong? Do we assume that we need to get another insurance quote after we complete the repairs? 

Thanks

Sounds like a terrible idea to me personally. Instead it sounds like you need to major in a field in which you enjoy / switch to a trade school / or even get a job instead of college which can aid you in starting real estate.

Why can't you do real estate and college? In my opinion if you don't have the drive to get started in real estate while going to college you will not have it when you drop out either. You will just be in a worse starting position that were previously were.

• We want to start house hacking by the beginning of the summer (obviously we wont force anything) so that we can save on our housing expenses and move closer to our financial goals.
• We also want to purchase at least 1 other residential multi-family property by the end of the year.

Without a plan the chance of success are much lower so our plan of action to achieve these goals is as follows:

• Continue to network with local investors via the various meetups available
• Continue to look at the MLS deals as they come through
• Continue our Direct Mail campaign that we had started in the past 3 months as well as start another.
• Determine another outlet to find deals that we want to pursue (ie. Foreclosures, Sheriff Sales, Tax Sales ...)

The BRRRR strategy seems like such a great way to get started. We are looking to get started with this strategy as well, just haven't found the right property yet. Calculating the costs of various key pieces throughout the process can definitely throw people for a loop (myself included) as there are many moving parts. You can be dealing with interest on the money to purchase the property, holding costs and the refinancing costs. If an investor does not have a good grasp on the #'s it is easy to dig yourself a hole.

Another pitfall is the actual cost of the rehab. Especially for newer investors, who do not have the level of experience, it is easy to estimate costs that are far from actual amounts needed. We are in the process of purchasing a property which was suggested by a mentor at a local REI for us to house hack and without his knowledge of the costs associated to rehab the unit I would have probably been far off and may not have even attempted to pursue the property. So I think getting advice from those more experienced is invaluable.

Really enjoyed this episode. Sterling's passion really shows and is very motivational. He is a real person of action and it really kicks me into gear when I listen to him speak.

The code officers said that they have suggested this to multiple other people who have went through with it and it is a fairly straight forward process (Although I have no idea). Although it does lower the rent by about 300 per month there is a point where if the fire escape costs a certain amount the return from the deconversion is better. Based off of numbers I am looking at at the moment it seems like pretty similar returns. 

Honestly either approach sounds like a pain as there is no simple solution to the fire escape as a collapsible escape like u suggested is not legal here. 

Not sure about the overall value of the property going down but it is definitely a good point. I know that a duplex just sold for 30k more than what we could get this property for at the moment. Obviously it will require some money though with either of our options. 

But you have definitely swayed me a bit back towards being unsure of which way to proceed.

Hey guys,

Looking for some insights on what is involved with combining two units in a property. Currently we are interested in a 3-unit property that requires an external fire escape to be built in order to make it code compliant. After talking with a few engineers and fabricators we have an estimated cost of anywhere from 25K-35K for the construction and installation. While talking to 2 code officers from the area, they brought up the idea of de-converting the property into a duplex by combining the top two units and this would allow us to no longer have to build the fire escape. 

My questions arise in what is required in order to make it a legal duplex. I will call the code office to make sure, but I was just curious if anyone had a similar experience. I know that I need to remove the kitchen, but pretty much after that is there anything else that needs to be done? Also, if anyone has ever removed a kitchen, could you maybe describe what that cost you and what all needed to be done?  

Also, each of the units is currently on separate electrical meters, so I'm uncertain as to what would need to be done when converting to a duplex. Could 2 meters just be billed to the same tenant? 

Any additional nuggets of wisdom would be greatly appreciated.

Thanks.