All Forum Posts by: Brian Mathews

@John Henderson  All hvac equipment comes with a 5 year parts warranty no matter who buys it.  it tracks off the serial number.   Not sure of your area for labor warranty.   

Is fixing up the rental going to provide a significant increase in rental income?  If not, why bother?  It sounds like you have skills if you are going to fix the roof and do other stuff around this house.   Why not do that on the side to build more income for your family? Provide the free labor for your house to get sweat equity in it   Then get a 2nd/side job to pay off whatever you need to pay off.  

I wasn't able to edit my last post.    It is what you paid for the materials vs. what he paid you for them.    The $4000 profit you mentioned will be taxed as income.    So you will be paying about $1000 in federal taxes  on that money.    

Why not go and get a loan to fund whatever repairs are needed for your other property?   You are in essence borrowing money at over 30% interest to pay yourself to get money to do another job.  Probably close to 40%.  Your own tax rate + employer part for federal taxes, any state taxes and 19% workmen's comp.  Then factor in the cost of that money being borrowed at it's interest rate.    Even if you markup materials, you'll still be paying taxes on the difference in what the materials cost vs what you paid you for them.    Your logic is extremely flawed.   Debt is a tool in the toolbox as you stated, but that isn't justification for debt that is bad.   

I'm an hvac contractor and I'll tell you how it works from the distributors and contractors end.   I'm installed several systems for people who bought them online.    First of all, if you need warranty parts for anything, you will be left to fend for yourself from whoever you bought it online from.   None of the local distributors here will warranty any parts, regardless of what the online company tells you.    And it will break, they break when the weather is at it's most extreme, when you really need it working.    It might take several days to weeks to get parts.  Buying locally, you will more than likely get parts in a day or less.   I offer absolutely no warranty on any repairs, so when something breaks, you will be charged full labor rate.   New hvac equipment is nowhere near as reliable as older stuff, new stuff doesn't last 20 years anymore and usually requires somewhat regular maintenance, it isn't as forgiving as it once was.   The next issue I've seen about half the time is that you get what you order, but if you don't know what you're ordering, you may not get what you want.   When you receive it, its yours.  They don't take it back.   I've seen 4 people have to re-order another piece of equipment because they ordered the wrong stuff.   I don't really care if people order their own equipment.   It's better for me so I don't have to warranty the inevitable breakdown.   I also would never install for $500.   That's a joke for anybody to do that.    Likely an unlicensed person doing a crappy install working for beer and cigarette money.  

I wouldn't rent it out. It sounds like you'll be losing money every month or breaking even before repairs with a $132K mortgage and $300 HOA dues. First time something needs a repair or a tenant quits paying rent, you're screwed. I wouldn't invest money on the east coast no matter how cheap it is. Invest someplace close so you can drive by and look at the property on occasion, it will also keep the property manager honest. I've seen too many "California investors" get taken to the cleaners by crappy PM. Take the money from the sale, go buy a duplex, live in one side and rent out the other until it gets moving good, then buy a house to live in.

 Lots of close calls in life will make you re-evaluate where you are .  My big thing is insurance, you really can't have too much of it.  

The title is a little misleading.   Not sure that qualifies as a brush with death.  But it is a good idea to make plans with your life and how to deal with catastrophe's and other things out of the ordinary.    Even weather related.   

 If the rent is below market currently.   Increase the rent to market or however much you are allowed too.   The issue might take care of itself.   If its already close to market, then don't renew.  

Everything depends on the law in your state.    Your property manager should know the answers to these questions, that is why you hired them.   Utilize them for what you hired them for.