All Forum Posts by: BOB CRANEY

I have always only made money when i sold a rehabbed property. I occasionally enjoy doing certain aspects of the renovation myself but never have paid myself the equivalent wage associated with these different parts of the project. In a similar vein i have never included a GC/project management fee as part of my costs even though i have always run my own jobs. I am incorporated and purchase all the properties in the company name so i guess i could pay myself on a W@ type basis for this kind of arrangement but ji wonder if anyone else is doing it this way. Unfortunately i have a regular full time job, if i was able to pay myself along the way during a rehab then i may be able to ease out of the job without feeling pinched with no income for several months until a rehab is sold or rented. 

I was moved to share some pics of a big rehab i did after seeing J Scotts latest post. Its inspiring to see what can be accomplished when you set your mind to it. I had done a few full gut rehabs before this one but i ended up learning a lot of new things and all the problems i had made me a better rehabber for it. This is a duplex with a total of 4 (2BR) apartments. It involved an underpinning of the basement that i will never do again due to the cost and danger in doing it correctly. I spent way more on the rehab than i had hoped but the rents have steadily increased and i finally turned positive and it has cash flowed for the last few years.

I am a small LL with 13 rental units in 9 buildings. Most all i have is row homes or duplexes with 2 units in one building. I manage and do most all my own maintenance with the exception of most of the major stuff. I have contracting experience so anything i cant do myself, i have someone to call to fix it. I would like to build up to at least 25 units so i can replace my regular Joe job income of about $90k per year. 

I am not stuck on that 25 unit # but wonder how much more business structure i would need to manage 25-50 units whether they are SF, row homes or small multi unit apartment buildings. Curious to hear how other people are set up, # of employees and what they do vs what you still do and are responsible for daily. I find 13 units very easy to manage currently but realize that there is a line somewhere that requires more help if you go up in unit count. Currently grossing about $174k per year or about $13,385 per unit/year

NEVER EVER EVER let a section 8 tenant move into the house or sign the lease until

• the unit has been inspected by the housing authority and passed
• they have approved your requested rent and told you the tenants portion they will pay
• they have approved a move in date
• they have set a date and time for you and the tenant to meet at the housing authority for you to sign the housing authorities lease addendum.
• you need to make sure the tenant has called the Utility company to have service put into their names as of the day the lease is supposed to start
• prior to meeting to sign the lease you need to confirm the tenant has the required security deposit in full
• tenant does not get the keys to move in until the day before or day of the lease start date
• you have provided your banking info to the housing authority for the direct deposit payment setup

At this point without some internal point of contact that you can call directly, you should go down to the housing authority immediately to speak with the case worker or a supervisor about the situation. Section 8 tenants are as good as any other tenants but they need to be managed tightly to make sure that the system they are involved with doesnt screw you. you are currently getting screwed and dont seem concerned about it to much as much as you should be. 

If you have a local investment group i recommend going to make some contractor type contacts that can give you referrals for stuff like companies that do lead inspections. Once you have hired them to do a inspection you can pick their brain about local laws and whats required if you have lead in your home. Try to pick a company that specializes in lead work and not just one that does it as a sideline. They are much more knowledgeable and willing to give you the advice to keep you as a client and not leave you exposed to a  potential lead lawsuit.

If your keeping the property as a long term rental i recommend have the lead test done with an XRF gun instead of dust wipes. It will cost more initially but if you are lead free you should never have to do the test again saving you money over the long run.

For a basic fix and flip anything with a nice elongated bowl and plastic seat will due. For long term rentals you want a tank that has a very sturdy connection to the bowl preferably a 3 pt connection so the tank wont wobble when the tenant flops their big ol butt on the seat after just getting out of the shower. The cheap Glacier bay uses a 2 bolt connection with a soft gasket between that allows the tank to wobble and snap if someone leans back into it. Ask me how i know this!!! I have always been favorable to the Kohler Wellworth Lite with elongated bowl. If you want to show off, hook it up with a slow close toilet seat which will help when the youngins want to play see saw with the seat. Think long term not up front cost.

I have been a lurker on the site since inception and have re and re-read most all of Jeff Browns postings for many years, although i have never contacted him personally. I find the Old school wisdom and straight talk approach he dishes out much to my liking and a refreshing variation on the hucksters appearing every few years always trying to sell you the latest snake oil.

One thing i have never read is Jeff talking about the specifics of how he makes a living working together with people on their Purposeful Plans, im sure its not free. Perhaps its to personal and only something he will reveal when actively working with a committed client. I'm sure each individual investors situation will be different but what are the basics of how you charge for what you do? I can hypothesize much but i hope Jeff would be willing to share some details about the cost to tap his extensive knowledge. He has already given away all his Grandmas secrets so maybe im asking too much. haha