All Forum Posts by: Chad Clark

I was hoping that wasn't going to be the answer as I do not know any private investors or even where you'd look for that.   

I got a land contract during the COVID problem and the sales dried up making it so there's no compareables for an appraisal.   Of course, this in turn made it impossible to obtain a loan.   I wanted originally to use the property's income to be used via comparable rent schedule so my loan choices are limited.   I bought it as a giant fixer upper and have almost finished it, but now it's time to go get the loan, I can't do it due to the appraisal process being the stopper.   Any ideas?  I really don't want to walk away from it.    Especially when the profit margin is so high.     I'm considering selling another property to cover it, but I'll be hit hard with capitol gains since it will sell for almost exactly what I need.   Ugh....

I'm guessing the answer is no due to dissimilar properties and the land contract has been in place and recorded for almost a year as well, but doesn't hurt to ask.   Saves me ton of cash if I can. 

exactly what I'm going to end up doing.   I have a contractor now for another property so I'm going to bring them by this one as well. 

I've noticed a significant downturn in the quality of contractors as well.   It's hard for them to keep up with the prices of materials through the roof and even McDonalds is paying $21 an hour around here.  Finding people to work seems to be the largest problem in my area.  

As for the real estate, I live in pretty much a resort area. People flock here to retire since it's very pretty country. If you're the outdoorsy type, this is the place to be. Houses have doubled in price and seeing multiple bids way over the asking price are common now. Cash only deals listed straight up. The beat up cat pee ridden flea nests are gone. (which is a bummer for me as that is what I bought the most of). I'm one of those BRRR types. Tax sales and buying out other investors is my only recourse now. I can't profit in the least buying from an agent now. Rentals are super high demand. There are none. Even with that, I can't very well price a 3BR,1BA at $2000 for rent or higher easily. People will jump that ship fast if rents drop leaving me with a bad investment.

So I'm finding myself only buying places that need SERIOUS work and doing most of it myself to bump up the profits.   Cutting out labor makes a massive difference, but I'm not getting any younger.  

    I have 2 rentals (both houses) with driveways that have a negative grade.   Since I am in Michigan, we get a lot of snow.   So come spring, it makes a lake at the lowest point of the driveway.    One just floods, but at least it's concrete so it's workable till it dries.   The other is gravel and turns into a swampland making it a serious pain pulling in.  

The concrete one, I would just like to have it drain so it doesn't look so bad.   It's like 3 inches of water.  Plus, it's probably extending the life of my driveway.    Luckily, the low spot is next to the yard so digging isn't a big deal.   Problem is this town has no rain drainage so I'd end up getting ALL of the rain water from the road as well, most likely overloading some simple trench drain.  

The other that's dirt needs a serious fix.    Also, it has no nearby place to drain the water to.  I'm starting to think my only answer is to put in a concrete driveway higher than the water line gets.  It would be expensive though.  Adding gravel just wouldn't cut it I think.   It would just be underwater gravel.   Stupid town and the lack of rain drainage.  

Any idea welcome.  I'm kind of at a loss here. 

I have one that is wheel chair accessible.    I decided to keep it as is and advertise it that way.  

I got a little lucky as I was using this as a tester for AirBnB at the same time and they had guidelines to be able to call it wheel chair accessible.    The door ways had to be a certain width.  Shower and toilet bars to help them maneuver around and of course the ramps over any steps outside.  There's other things as well so go over the list provided here.    You don't have to do them all, but it's really nice and most are really simple.  Lowering a closet rack for instance.  Not real difficult.   https://www.apartmentlist.com/...

I got lucky and the doorways were wide enough to allow a chair through.   I just ended up mixing sand into a paint to cover the ramps for a little traction.  Then added the bars to the shower and toilet.  Easy enough.  As for finding someone to rent it, I just said it was wheel chair accessible when I listed it.   I happened to have most of it anyway.  

One thing you should make sure of is if you want to refuse a disabled veteran, be sure to read up on this.  There's a lot of protection for them.  Sounds mean, but you don't want to get backed into a legal corner accidentally getting a bad one.  

I ended up with a little old lady who's wonderful really.  Very nice and of course, no worries about crazy parties.   Best part is the disability can be paid direct to you for the rent.  Guaranteed rent is always nice.   It's a little bit of extra work, but kind of worth it compared to the nightmare tenant.  

PS. I haven't read up on how to make things work for someone that's blind or ran into the service animal thing yet so be sure to read up on those if it's a concern.  

In answer to Will and Drew, the drywall was already not worth saving in most spots.  Also, the electrical had been a mess and it was easier to just rip it out and start over.   Three fuse boxes of mystery, if that gives an idea.   I don't mind tearing it down to the studs, it's typically easier and is going to look new in the end.   Drywall is pretty cheap after all.   A lot of work, but I do that part myself.    Time is typically the thing I have a lot of.

Anyway, I got lucky and decided to bring out my framer before I went any further since the frame seemed suspect.  I was going to add bedrooms and baths anyway so he was first.   Turns out he started laughing as soon as he went into the attic and I pointed out what I was wondering about.  Turns out the roof was an add on.  The entire thing was something someone decided to just cut the old trusses and plop and new set of extensions onto those trusses that was much bigger on without any knowledge of load bearing to the floors below.  So it made a weight onto areas that weren't designed to have the weight of a roof on them.  I could easily see what he meant once I thought about what was below.  I had noticed a bow in the beams above the kitchen.  

Made for some bowing on the support beams below in every room.  It was actually scary once he explained how the weight of the roof was on empty space. 

So in the end, I gladly walked away from a money pit.  Sad to miss out on an opportunity, but considering it actually was a pit in disguise, I don't mind.  I'll walk away smiling knowing I didn't get a nightmare.  I had nothing in escrow, I won't jump unless I'm sure and it was only the second day since I had noticed it.    

Oh, and do me a fav, I have a carpenter, plumber, and such so I won't be "Granpa Joe"ing this.  No need to go into that.  I do things the proper way.  I don't like to end up with more problems down the road.  

I'm curious about permits and the problems that can arise from needing them.   Ok, I'm in Michigan and I tend to do simple refresh type renovations.  Nothing too invasive.  New faucets, floors, paint, lights, trim and a bunch of things to make it look way better than before.  I have a ton of tricks to get things looking great.  

Well, I ran into a property that needs a ton.   I don't mind doing electrical, but I'm not an electrician, and this place needs one.  Ok, so permits are going to be a thing and I'll have to hire someone to fix this mess.  It's past what I can do.  Walls are going to have to come out.  I know we have to have an inspection for it if you do that.   I've heard some horror stories about another investor getting into a mess because they called an inspector out and they made him update the firewalls in the walls.  Eeek.  No idea what that entails, but I heard he had to hire an architect to get it fixed.  Ouch.   Since this is already going to get a little pricey with an electrician to come in and sort out the mess, I'm wondering what else can I run into since walls are coming down?  

I'm going to have to do some framing, drywall, and basic stuff, but I just don't want to run into some junk about how something isn't up to code and blah blah blah.   What all do they look for?   Might as well get this checked before I'm in the money pit.  

Here's the kicker, potential to earn over 700% ROI.   Yeah, it's that good.  I can get in for virtually nothing, it's the repairs that are going to kill me.  But the land and foundation make this close to a million dollar monster when finished.  Waterfront, horse stables, acreage, huge amount of square footage, etc..  

I need to have an idea of what to look for to not get in over my head.