All Forum Posts by: Ben Galbraith

Hi All,

Some help/opinions are appreciated!  I bought a duplex with my mom and she will occupy one side and we'll rent out the other.  We've begun to remodel one unit and we've taken off some drywall and pulled all fixtures from the bathroom, gutted kitchen and bringing in all new cabinets and appliances.  Electric panel and a few wires are getting updated (a couple aluminum wires).  The house has one galvanized line as part of the plumbing and it's a no brainer to replace that of course!  The rest of the house is copper.  I'm attempted to abandon everything and pull it out and start with fresh?  I would replace everything myself starting with the line from the meter and I'll be able to get all fittings and Uponor Pex product at cost, and have access to a cordless tool for "easy" fitting install (I'm sure I'm missing all sorts of industry standard language so apologies).  I have an inspector that is a friend of a friend that will consult me on code and will ensure it will pass inspection throughout the process.  Long term I plan to hold the house for 30+ years, although I do plan to scale over time (This is my first rental) and so perhaps this will get 1031'd at some point.  It's a 1976 build... I know Copper is excellent if not preferred by some, but just curious to get thoughts on whether it's worth while for me to do this or not?!  My thought is peace of mind for the potential long term play.  Part of my goals in scaling a bit is to leverage my mom to house hack these rentals as she doesn't own herself (other than we're both on the loan for this place) and ultimately retire her from her day job and supplement her income.  Anyway your help/comments are appreciated (if not obvious if it were just me I'd do it for peace of mind but I'm getting "save money" push back but I don't think it's that much money if not considering my time... which I likely should consider but this being my first deal I'm cautious on the money out and feel like my time is better and I have fall back money if something goes wrong).

@Dillon Cook Thanks for the tip.  Something I hadn't really thought of, but if it sits on the market for months then my expenses shoot through the roof with monthly rent going out. Cheers!

@Rachel H. Thanks this is helpful.  Good to know I'm on the right track!  I have called and emailed County Auditor office to find out what my next steps are in transferring the title, as well as if any taxes are due.  I'll be sure to add lien's to my list of things to ask.  It's looking like I need a "Real Estate Excise Tax" form in the state of washington, but with covid the court house building is closed to the public and so far haven't been able to find clear instruction on how to obtain one. And I do know that there is rent owed on the place, but of course they will not take payment until I have title in my name.  But I've been in communication with them and so far they have been accommodating.  Your inputs are appreciated!    

Hey Hector, I'm new to investing as well, but we had PMI on our home purchase due to putting 3.5% down. Our approach was to do home improvements with the difference of 3.5% and 20% we needed to avoid PMI. So we took the 16.5% and made home improvements in the first year. If I recall (this was back in 2014) our PMI was $200 or so a month which ended up costing us $2400 which was cheaper than putting the full 20% down and we were able to increase the value enough to refinance after the first year and have 20% equity. Note that I live in Seattle and we have seen unprecedented value increase over the last decade or so. For example our home has more than doubled in value according to our latest appraisal since 2014.

Realize there are risks and barriers to this approach. If you're not seeing values increase in your area then you may or maynot be able to get to the 20% with improvements? Additionally if the market turns you could be paying that PMI until you're able to pay your principle down enough to refi. Rates could go higher.

Other options could be to get creative financing.  Not that I recommend borrowing money from family, but my father in law and I worked out a deal when we bought our first house where he helped to finance some of the improvements we didn't plan on doing and upon refinance we pulled funds and paid him back with interest. (I'm sure if you listen to bigger pockets podcast you've thought of creative financing!)

Hope this helps and good luck.

Ben

Hi All, 

First post here so hope I'm not doing anything incorrectly?! 

My grandfather gifted my uncle his Mobile Home 3ish years ago when my uncle moved in to take care of him.  My grandfather has since passed (lived a long fruitful life) and my uncle didn't qualify for the lease through the property management company in order to stay in the home (I don't know what his income is but I think it's pretty minimal).  Anyway a long story long he called me yesterday frustrated that the management company was emailing him and based on what emails he forwarded me and reaching out to the management company he has to sign a transient storage agreement which basically says that he agrees to pay $800 a month until he either sells the place or moves it.  My uncle told me on the phone yesterday that he'd just like to be out from under it and he wants to sell it for $5k, to which I replied don't sell it for $5k unless you're going to sell it to me for that.  Anyway I'm thinking about giving him a real cash offer to take over the property, make some updates and sell it.

What I've done

• 1.) Called the Management company to confirm what my uncle needs to do and if he owes any additional fees beyond April rent and they've confirmed he does not.
• 2.) Emailed the management company to see if I were to get title of the home could I be on the transient agreement (waiting to hear back).
• 3.) Looked at other homes in the park to see what recent sales were and reviewed pictures to verify shape the home is in as well as fixtures and amenities they have.
• 4.) Talked to an agent who will do a walk through with me next week.
• Questions:
• 1.) What other due diligence do I need to do?  Things to specifically ask the management company? 
• 2.) Should I have an inspection done on the place before hand?
• 3.) This seems like a slam dunk but feel like I'm missing something here.
• 4.) Am I allowed to own a Mobile Home in a 55 and older park? (I'm not 55)  Based on forums I've read it seems like I should be able to own it, but the management company didn't get back to me on that question, but they responded right away to other questions.

Currently I've agreed to help my uncle pay rent if he needs next month and he can pay me back when he sells the place.  At any rate I think if I put in 10k of work the return would be 50k+ more than selling it as is.  I think it would sell for 60-80k as is.

Thanks,

Ben