All Forum Posts by: Billy Zhao

I have a house in Galveston, TX that is almost ready for short-term rental. It is currently empty and in need of fully furnishing the place. I tried to do it myself but I realized that my energy is limited. I reached out to a couple of professional staging people but they charge a lot. For a 2,000 sq ft house, they wanted something like $30k to fully furnish the place and it will take almost 60 days. My question to all the folks who are experienced short-term rental owners is, what's your method of getting the house furnished quickly in a cost-effective way?

Here is what happened:

I hired a general contractor in November 2021 to help me remodel a vacation home. The contract is an all-inclusive/fixed-priced contract. She didn't want to do time-and-material or cost-plus which I was fine with but she insisted on doing all-inclusive and keeping her cost opaque from me. She initially made many promises and she sounded friendly and eager to please. However, when the project started, her attitude started changing. She swapped materials from mid-grade level to just the cheapest Home Depot stuff. She complained that her workers are expensive ($40-80/hr). When the framing was done, and it's entering the 2nd phase of drywall and paint, the day after I paid her the scheduled draw, she sent me an email threatening to walk off the job if I don't pay her additional money (up to 90% of the contract). I agreed to it with her promise that she will complete everything. Only a month later, after several mishaps on her side including painting the house exterior with completely wrong color (I literally sent her the paint code from Benjamin Moore, she tried to color match it at Home Depot, I wanted gray and black, she painted house blue), she walked off the job claiming that she lost money and she blames me for all the delays. When her crew left the job, they left me a house with about 65% done per the original contract scope, a huge pile of construction debris in the driveway, and many items that need significant rework. I found out later that she didn't pay her plumber (about $7,700). She then sent me an invoice of $17,000 that was neither part of the original contract nor part of the change order and told me if I don't pay it she will put a lien on my house. Despite my repeated plea for her to come back and my willingness to compromise, she refused to come back and berated me in her emails by ending "see you in court" in every email.

Now I am receiving her lawyer's and the plumber's lawyer's threatening email asking for payment or else they will file a lien.

After they left, I've been working on the house by hiring new contractors or doing it myself to save money. Overall, another $20,000 of work was put in to complete the project.

I am wondering if anyone had a similar experience and how to navigate the legal process. I reached out to a few lawyers but I haven't found one that I feel is good. I am planning on suing her through small claims court. I have no contractual relationship or even awareness of who her plumber is, and in Texas, there are specific rules for subs to be protected and they didn't follow those rules. I want to follow the steps to protect myself against further damage. If you can provide me with some suggestions and advice, it will be greatly appreciated!

I use one of the major tax protest services and the result is fairly mixed. They usually charge you a base fee and a percentage (usually 50%) of the amount of tax saved. The amount of tax they were able to save for me is usually a few hundred dollars which are nice to have but not big enough to be impactful.

I own a condo in Austin free and clear. The property value is about $425k. The rental income is about $1,800 a month. Tax is about $8,000 a year and the HOA fee + insurance comes out to be about $300 a month.

I'd like to do a cashout refi so I can put the equity to good use for another investment. 

I contacted my go-to mortgage broker. And the rate I got from him is 4.5% with 1.5 points (about $3,800) if I borrow $250k. The monthly payment would come out to be $2,300.

My questions are:

1- How much should I borrow against this property? Should I borrow more?
2- Is this a good refi rate (investment property) and points cost? 
3- I plan to do a quick remodel and increase the rent to $2,000-$2,200 in 2023. This will bring the cash flow to almost break even. It will still be a loss though but the property will appreciate nicely because of its location. Thoughts on this?

Thank you in advance!

It doesn't appear people are talking about this fee (0.5% of the refinancing cost - averaging $1,400 of all closing costs) will kick in at the end of December. 

What's your strategy dealing with this?

My work is kind enough to give allowance to buy personal improvement items up to $500 during the work from home time. Instead of buying a standing desk, I decided to use the money to buy some books. 

Can you recommend the most useful books for real estate investors from beginner to advanced? I assume some books are more for introduction and inspiration (Rich Dad Poor Dad, etc.) and some are very useful as a reference and tool (Gallinelli's Cashflow and key financial measures book). 

Thank you!

I get at least 5 calls a day from people with a heavy foreign accent asking if I am interested in selling one of my investment properties. I am curious if these are newly established wholesalers and what their strategy is. Cause it sure is annoying to receive these calls and they are very opaque about who they are and how to contact them. I literally told them that even though I am not selling, if they are wholesalers they can contact me with their current listings. And yet, not one of them ever called me back as if these call agents are oversea call centers that just read stuff off a script and they don't understand the business model themselves. Or they are just collecting leads like spam email marketing then sell the potential leads to wholesale buyers? Not sure how to deal with these people. 

Your thoughts?

Thanks @Ryan Kelly 

I'd kill to get a duplex that even cashflow $400. The ones I saw on the market are all cashflow negative or barely break even. 

I'm going to take a slightly different tone (but still positive) from others. 

Yes, you kinda missed a lot of opportunities for the last 20 years and yes, you wish you could've started a lot sooner. Looking at all the successful people on BiggerPockets and social media and seeing they "showing off" their age in 20s and 30s really make people feeling anxious, hopeless, even angry (at one's self). That's how I feel sometimes. 

Now that we acknowledged this, knowing that there are tons of people in the same boat, we can move on and start building. It's not early, but never too late.

What is perplexing to me is why duplexes didn't yield better rental income. It's like buying value stock vs. growth stock. AT&T's price has been stable for years, but you get about $.50 per share per quarter consistently for years as well. Duplexes don't seem to produce the rental income that offset the lack of appreciation (comparing with SFH). This is really odd. I need to lookup more data to see if this is just an anecdotal case.