All Forum Posts by: Andrew B.

@Joe Splitrock

What is a ballpark estimate I should be looking for?  I know every job has it's own scope but would be helpful to know a rough range so I know I am getting an honest quote.

@Joe Splitrock

Thanks for your input!  To fix the grading, should I just talk to landscaping crews or is there another type of contractor that would be better suited?

@Paul Shannon @Steven Epps

What is the best way to unclog underground PVC?

There are 4 spots where it is leaking. 3 spots are fairly close to ground level and one is about 5-6ft below ground level.

3 of the leaks (2 high, 1 low) are the result of a general down grade slope towards the house in the backyard.

The fourth leak is likely the result of a clogged underground PVC pipe.

The one thing that I will mention is that these leaks are quite small and only result in 1ft diameter puddles 1/8” or less deep. They also have only appeared on the rainiest of days we’ve had this spring. In talking to other owners in the area, this is fairly common and since the water doesn’t affect any mechanicals in our basement, I am less concerned overall. I mainly am trying to protect the value of the property long-term and avoid this issue developing into a much larger issue.

Is there a downside to injecting epoxy cement into the cracks?  My fear is that if you fill the cracks, the water will just sit outside the foundation and cause the walls to bow inward over time.  Is that a legitimate fear?  

I have checked the gutters already and we are fine there but I will definitely inspect the PVC pipe myself and see if it is obstructed. 

I purchased a duplex last month that was built in 1921.  There have been 2 days in the past month where we have gotten a TON of rain and we ended up with some small to medium size puddles in the basement.  Is this cause for concern long-term for the property?  I am occupying one of the units so I have been able to use a push broom to push the water towards the drain in the basement and get it dried out in a couple of hours.  

The water comes in as a result of two things. First, the backyard is not graded correctly and it slopes towards the house which allows the water to pool and then it seeps in through a tiny hole.  Second, the gutters are all routed into one PVC pipe that goes into the ground and I am assuming it connects to the driveway drain pipe underground in some manner but since that's where water is coming in, my guess is that there is something wrong with the connection.

My concern is that if I don't do anything about it, it will lead to foundation issues long-term as well as mold issues if, in the future, tenants are not as proactive as me with getting the basement dry.  I am assuming that if I want to fix it properly, I need to get the backyard graded properly and dig into the ground to figure out the drain pipe issues on the driveway side of the house.  However, the amount of water that comes in is really not that bad and if it's cleaned up appropriately, it doesn't really cause any issues because most of the basement is dry and we know not to store anything that can't get wet in those specific spots.

Looking for advice!

@Taylor Hudgins I was the second highest listing on the market so I was worried I was priced too high but here we are haha

@Taylor Hudgins it was amazing how quickly we rented it. Had 3 solid applicants within 6 days. Didn’t even miss a beat with all of the shutdowns in Ohio.

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Lakewood.

Purchase price: $285,000
Cash invested: $14,000

Owner-occupied house hack. Cash flow is pro-forma as if it were 100% tenant occupied at market rent.

What made you interested in investing in this type of deal?

Wanted to decrease monthly expenses by moving out of our downtown Cleveland condo into a property we would eventually hold as an investment property. Opportunity to get comfortable with being a landlord in a lower stakes situation. Reduced our PITI from $2,800 to $1,900 so even if we didn't rent out the other unit, we improved our personal cash flow.

How did you find this deal and how did you negotiate it?

Found it on the MLS from a flipper who was going through the city and doing a lot of renovation projects. Missed out on an earlier property they renovated but stayed in contact with them and was able to put in an offer on this property as soon as it was put on the MLS.

How did you finance this deal?

FHA Financing

How did you add value to the deal?

The value add on this deal is that we were able to secure this property for low money down due to our occupancy of one unit. The unit was fully renovated and has all brand-new mechanicals which should keep maintenance, repairs, and capex low for the next few years.

What was the outcome?

It will generate $400 month of cash flow once we move out and our total cash contributed to the property to date is $14,000. We are "paying" ourselves market rent right now to keep the property capitalized so when we move out, we will have contributed $30k total to the property for approximately 16% cash on cash from that point on. Cap rate is approximately 7.8%. All figures are using 5% gross rent each for vacancy, maint/repairs, and capex.

Lessons learned? Challenges?

Jumping through the FHA hoops was a challenge but it was worth it.

@Andrew Postell Thanks for your response!

Can anyone help me understand if my situation is possible and not breaking any rules?

First, our current primary residence is an owner-occupied duplex where we used FHA financing. We will have established one year of residency in April 2021.

Second, we are looking at doing a large renovation for our “forever home” and are going to buy a house using the Fannie Mae HomeStyle loan as a primary residence. The renovation of this home will be completed after April 2021 once we have established one year of residency in our duplex.

Third, we are looking at buying a single family using the Fannie Mae HomeStyle investment property loan.

My questions are:

1. Can I have two Fannie Mae HomeStyle loans at once? One for an investment property and one for a primary residence?

2. Is there any issue with us starting the process of buying our next primary residence prior to establishing one year of residency in our current primary residence? We would likely be trying to close on the Fannie Mae loan for the next primary sometime in September with a completion date for the renovation estimated to be April/May 2021.