All Forum Posts by: Buddy Holmes

@Ann Tavsanli

I am not clear on how many units you have, but 30 AMP service to each does not sound correct unless they were built a long long time ago.  What your electrician is saying not is that you need ground fault circuits in kitchen and baths around water sources.

this is required by building codes and is an important safety issue.  Now that you have been told and know about the issue, you have a liability should anyone get hurt or die due to not having this corrected. As a landlord you MUST fix it.  You should contact your inspector that you hired prior to buying and "ask" that he re-inspect the property at no cost and look at the electrical service to each unit.  If he does not agree, report him to the local building code department and the BBB. This guy is dangerous!!

GFI's around water is BASIC.

I think the reference of 30Amp is upgrade the receptacles where window A/C units are from 20 Amp to 30 Amp.  This requires larger guage wire run between the fuse/breaker box and the A/C receptacle and a new Breaker.  Look at the Fuse/Breaker box and read what the total amperage service for the unit is.  I think you will find a 100 Amp or higher service for the unit.

 let me know what you find.

Cheers

Buddy

@Connor Milligan

Connor, It is good that your are asking for help.  Go through some of the BP podcast/videos on evaluating deals.

Your comment about SF being to expensive for 20% down buys, tells me that you have not evaluated any possible deals.

First you want a deal that has cash flow.  The very first look is how much rent for the unit and how much the cost of the unit.

SF rents might look high but the property prices are even higher.  This is the problem, not that you could not afford 20% down.

There was a 2% rule to quickly eliminate possible deals and choose markets. i.e $1000/mo rent for a $50K purchase.  Good luck finding one of these now, but even a 1% rule is had to find and can be hard to show a reasonable cash flow.   Once you spend time n learning how to make money on a "cash flowing Investment in RE" then worry about how to finance you purchase.

House hack a duplex for a possible 3.5% down deal.   Buy in a "rural" area with a low down Payment Dept of Ag loan to live in a year and a day then rent and move on.   If you don't understand the deal evaluation process, your venture into RE can be devastating.    Take it slow, learn much, save your money for down payment, take small solid cash flow investments and you will have good luck in RE Investing.

Cheers

@Tracy Williamson

Still missing the point Tracy.  You invested/paid sombody 30k.  What did they promise you in return for doing this?  That is called the terms of your investment. Normally the terms might be x% return in y Months or the return of investment after the sale and Z% of the gains from the sale.  Your statement I invested 30k in RE."  doesn't give anyone a clue of what you are doing and therefore what you should ask whoever you gave your money to.

Cheers

@Aaron Costantino

Great questions and the fact that you are asking tells me you already know the answer.  If so trust your judgement!

This being your first investment in the concept and you have found out that there were some things already that you had not planned on, is your first lesson to learn and act on what you have learned.  This is good not bad.  As they say Stuff Happens.

In your case you have come up with a good plan to pause, learn the next lesson and proceed to the next step after more lessons learned.   I would say and I think you already realize that you should get one unit ready to rent and check out your ability to get cash flow from it before taking further risks.   This tells me that you have some very good judgement and just need to trust it a bit more.   Getting second opinions via BP is good as well though.  Best of Luck!

Cheers,

Buddy

If you are investing money in this, you did purchase something.  If no money invested then you are just studying and plan to invest.

If you have given money to someone connected to this land purchase/investment, then you should have some paper with the terms of your purchase.   Still not sure of your status in this "investment."

Cheers

@Tracy Williamson

I don't want to sound too hard but, You should ask yourself why did I "invest" any money in this deal.

Real investment means you have looked at this deal and have concluded  yourself that you are going to have a return on your investment.  Don't expect someone else to do that work and certainly don't just depend on the who you gave your money to.

Perhaps I read your case incorrectly. Perhaps some more detail would help.

Cheers,

Buddy

I was born and raised in Jax.  I will be looking for a place to rent down there for 2 months soon.  Appreciate any ideas?

Cheers

IMHO this is a tight high wire act.

If you have already purchased the property without checking then by all means try to see if you can get it ready to rent by:

1) Do not  try to get it set up as a duplex!

2) you will need the two meters turned on by the electric service.  If this can be done w/o a building permit then step one.

3) you will need water in both units. Check to see if they are together or also separate. If not together but separate then you will need see if you can have both turned on w/o a building permit. if so then you made step two.  If they are together then you need to figure how you work with the two rentals to pay the water bill or pay it yourself.

4) You will need to work out how mail is delivered for two parties at one address.  There will not be two address numbers.  I don't think the PO cares, just your tenants.

If you can do this then you should be under cover and fine unless you have a real aggressive building code enforcement or someone complains about something.

I know of an effort in Savannah to make a duplex like this to code.  It is/was a disaster. They were required to meet fire codes on a two story.. new fire "Walls and ceiling" separate HVAC.  If you didn't plan for it you will not get there officially.

I would try on the sly. Good luck

Cheers,

Buddy

@Mary Beatty

It is great that you have a local Agent like @Mary Beatty offering to help.  And it is great that she can advise you on the market appreciation in your home area.  I should have offered this advice at first but the mention of appreciation jogged my memory.

Appreciation is absolutely great but... NEVER EVER depend on Appreciation in evaluating a deal! ALWAYS make sure that you can show a reasonable CASH FLOW every month after the PITI and rent reserves and repair reserves and ever some Capital EXpenses every 10 years like a new roof or new HVAC and for a a new investor I would allow for Property management as well. Been there done that, learned my lesson.

You really don't want to learn Investing and Property Management all to start with!

@Chad Kinsley,

I would suggest sitting down an taking a deep breath. Make sure you have a plan to get on base? Have you learned how to evaluate a possible deal on any property: SFR, Duplex, commercial, etc. The choice of which may well depend on how much cash you have to invest. Even if this is big, I would suggest start small on your first one. That is generally a sing family home. NO CONDOs!

IMHO, your first deal should be close to your home. Very Close.  Don't depend on anyone but yourself in the first deal. Get opinions from as many experienced folk as you can, but make sure you see clearly how you are going to have positive cash flow on the deal from day one.