All Forum Posts by: Ashley Wolfe

Hey folks,

I have been re-reading The Essential Guide for Landlords by Karen Rittenhouse. She suggests holding open houses for rentals as well as a bunch of other free things (Craigslist, etc.) to attract applicants. With all this work in a healthy renting market (DFW Metroplex), would you suggest to put the property on the MLS? Would we still owe a real estate agent a finders fee if the house is not on the MLS?

What do you suggest we do as new landlords to get our house rented quickly with a good tenant?

I'm nervous about our first rental investment and am having pre-closing buyers remorse.  Is real estate truly worth the stress and initial investment (down payment, closing costs, repairs/updating)?  This deal isn't a grand slam, we're just getting on base.  But uncertainty is creeping in with each day that passes and we get closer to closing.

Hello folks,

We are in the midst of closing on our first buy-and-hold deal.  In another thread, some of you kindly analyzed the numbers and we're going to get about a 10%-12% cap rate. Official loan documents are being signed, inspection has been done and repair addendum has been agreed upon.  Seller is agreeing to some small things (like GFCI outlets and removing debris) and some large things like a brand new roof and foundation repair.  After getting my Insurance Agent, who is also my Dad, to look over the inspection report, he noticed several other things that he suggested I ask the seller to take care of before closing.

In my mind, I don't want to be too demanding as a buyer.  However, I am in the position of power as the house has been on the market for almost 6 months and its clear the seller wants to get rid of it. 

My question is, how common is it in buying RE for the buyer to ask for multiple repairs in more than one addendum?  Since I've already submitted my first addendum and he's agreed to so much already, should I just be satisfied with what I'm getting and not press my luck?  Is there any strategy to asking for repairs? Is it best to ask for 100% of the repairs we want up front and not come back and ask for more over time?

And a related question for a roofer or contractor is: We are getting a brand new roof put on the house by the seller as well as foundation repairs.  How much would it cost to ask for some ventilation to be added to the job?  The inspection indicated ventilation issues in the attic and under the house.  I'm wondering if these can be taken care of while the roof and foundation are being worked on.

Thank you for your expertise and your suggestions.

I'm looking for a bit of deal analysis but more encouragement that moving forward is the right thing.  In the last week, some people close to me have said, "Wait another 12-18 months before buying a house.  There's going to be a recession then and you'll REALLY get a good deal."  So the wind has been taken a little out of my sails but I'm still going for it.

I found a 2/1 1,024 sq ft house in a small town outside of DFW (Weatherford) which is about 45 minutes away from our current residence.  The house was clearly a flip.  All the cosmetics were done and none of the big stuff like foundation, plumbing, HVAC (it only has gas lines to hook up heaters and window units), or replacing the roof with its three layers of shingles.

We made our initial offer at $76,500 and the seller countered at $77K and we accepted. ARV is $85K-$90K (especially if we put a new HVAC system and replace windows in the future).

Got it inspected and the obvious stuff came true about the need for major repairs and replacements. I made a repair request to the seller that included the replacing the sub-floor under the bathtub, fixing the foundation, updating the outlets to GFCI, replacing the roof and other small items. He agreed to all but the roof. So we terminated the contract. The reason we terminated was because I didn't feel comfortable about the spread from our purchase price to the low ARV potential.

The seller contacted my agent today and said he'd replace the roof so we reinstated the contract.  After the major repairs are finished, its practically turn-key.  We would need to do no cosmetic upgrades for it to be rent ready.

Two people in the industry have told us that the rental comps are $850-$950 a month. We'd go with conventional financing for 80% of the $77K which puts our monthly PITI around $580 on the high end.

Question 1)  Does this sound like a good rental property deal to you?  Are there any glaring red flags that I am missing?

Question 2) Other than reading books on renting properties and attending the Lifestyles Unlimited 2-day course and being a FFP member, we are so new at this that we don't really know where to start regarding marketing our rental property to get a healthy number of applicants.  I'm mainly concerned about not understanding all the legal nuances of landlording in Texas.  How do we screen tenants?  I've heard of a company called NTN.  Any others more comprehensive?  How do we collect application fees?  Do we have an open house for a rental?  Are there any books you suggest that could give us good information on this subject?

Question 3) For current SFH landlords: other than screening tenants, what is the most important thing that I need to know in keeping my resident(s) happy where they stay and pay?

Thanks everyone!

 $1200/month is what I was told.

For those of you interested in the details of the deal:

1945 4/2, 2000 sq ft

Listed at $87K, offered $82,500

ARV $110,000

We felt as if there was no room to remediate the existing repairs on top of a total cosmetic rehab which is what this property needed.

Cosmetic Rehab - $10-$20K

Replace existing wood and vinyl siding - $$$

Asbestos remediation -$$$$

Termite treatment - $$$

Rodent infestation - $$

Gas Leaks - $

New stove - $

New fireplace - $$$

All this for a rental?????????

Sound advice from all!  Thank you all for your words and for affirming that it is well worth the money to get all properties inspected. 

We just had our first accepted offer on a house that I knew would have some underlying problems.  After the general home inspection, we discovered WAY more than we were willing to take on for our first rehab/rent so we decided to terminate the contract.

We are still putting one foot in front of the other and found a potential turn key deal that we have put an offer on.

We know that doing an inspection is the right thing to do but at what point (if ever) do we decide to save our money and not get an inspection?  Is it worth the money in the long run to always do an inspection?  Is there an inspection requirement of some kind that I may be unaware of?  Could we be held liable for anything if we don't choose to get a property inspected?

Do you have every accepted offer inspected?  After doing this for a while, do you start to see the same problems or start to find the problems for yourself?

(In the inspection we just received, he found 9X9 asbestos tile flooring under the carpet, gas leaks from the furnace and water heater, leaking around the tub, squirrel infestations, termite trails, and old rotted wood siding among other problems.  We would have not known about these things because we are not home inspectors.  So it was WELL WORTH our money paying the inspector to walk away from this deal.)

The potential deal:

3/1.5/2 1947 SFH on 1.5 acres within 1/2 mile from the lake. Asking $74,900.

Its on a rough looking street with dilapidated mobile homes and other old houses.  The street its on is surrounded by homes that sell for $300K-$800K whether they are new construction or homes built in the 80s that have acreage.

There is a land tenant paying $400/month for use of the shed for his landscaping business.  My agent said we would be able to rent it out for $800-$900/month.  Its in an area with really good schools and low crime.

The realtor I'm working with said that the list price is basically the total ARV because the value is in the land. We put in an offer of $73,800 and the seller is "seriously considering" our offer according to my agent. A different agent I've talked to has said that this is a "good deal." There are multiple offers on the house and we'll know by this Friday who the seller is willing to give a contract to.

Because of the area being surrounded by huge mansions, we are speculating that, in the years to come, this land will be worth quite a lot and we can sell after renting out the house for 10-15 years.  We may even be able to subdivide the land into two or three lots because the lots for the mansions aren't very big.

The house needs about $10-15K worth of work to get a renter in it.  It oddly enough already has new granite Ctops and kitchen cabinets.

I'd like you to weigh in on if this sounds like a good deal to you.  It would be our first deal and we're getting nervous that we'd be basically hoping for a return on our investment since there is no real value in the home itself.

Thank you!

Hey BP,

I'm looking around at a lot of SFH properties that are on the MLS in my area under $100K. I came across one today that is very interesting. Its a 1957, 2-story, 3,000+ sq ft 6/3/2 on the market currently for $79,000 as-is. I immediately thought it would make a great duplex.

Description states that it needs about $45-50K in rehab.  Let's just call that $60-$80K to be safe.  I have no idea the state of the foundation, roof (which is flat), plumbing, HVAC or electrical.

The estimated ARV of the property based on Sq footage and number of homes is right at $200K conservatively. I checked the comps out on Lifestyles Unlimited Quest and the estimated ARV based on recently sold comps was $205K.

So, buying at listed price of $80K and putting in $80K to turn it into a duplex puts us all in at $160K. We could sell it as a duplex or get tenants in there, refinance, and pay off our private/hard money loans to get the deal done. Looking at the layout, it would most likely be a duplex that has one large unit and one smaller unit that have different rents. If we had a 3/2, ~1,700K sq ft, it could bring in ~$1,100 and a 3/1, ~1,300 sq ft could bring in ~$850 based on the area. In theory, we could potentially bring in ~$1,950 each month in rent to go towards PITI, savings account for future repairs, and the rest to positive cash flow.

I don't want to bite off more than I can chew so I've been thinking that getting a partner for this deal would be a good idea.

I know I need to get into the house and get some of my mentors in the industry to weigh in.

First, what I need to know is:

-what do you think of this deal?  Any red flags?

-in Texas (DFW) do I need to apply for a permit to turn a SFH into a duplex even if I'm not adding square footage to the footprint of the house?

-have any of you converted a SFH into a duplex successfully?

Thanks!