All Forum Posts by: Christopher Dru

Quote from @Adam Martin:

I don't do any flipping so this is just for ltr.  I like to buy a house that structurally is sound just dated and I agree in my area I'm looking for houses built in the 80's and newer.  I don't want to have to deal with lead paint or asbestos plus I stay in the b+ to A- range and in my area that is pretty much the date range of those houses.  I'm going to paint all the walls anyway and at some point lay down lvp so if the house needs work I smell a discount.  I'm looking for one that has been sitting for a bit and if there are some ugly chandeliers or fixtures I just see that as a bonus to lower my competition.  

1. I don't usually see popcorn ceilings but texture is common.  I don't love it but I don't think I'm losing any prospects having it so I see no reason to remove it.  

2. For a fence it is standard here to have a wood 3 rail fence with the wiring.  I have tried renting a house before that did not have one and it was significantly harder.  I allow dogs and like them due to the additional deposit of 600 plus 35/month/pet.  Ideally I'm buying with a fence already installed but if not one is getting built if practical.

3. For paint all walls are Behr flat scuff defense in accessible beige which is a greyish beige.  I use flat because it is significantly easier to touch up since I don't have to worry about the sheen fading.  I've touched up walls that were 3 years old but in otherwise good shape outside of a couple nail holes.

4. I do all lvp everywhere except the steps where I install carpet myself.  Carpet is just gross and tends to get damaged.  I'm trying to turn vacant units quickly so if I buy and the carpet is in good shape I may leave it but when it is past it's useful life it has to go.  I do like carpet on the steps though for extra grip to help tenants not fall and it is really cheap.  

5. I have never replaced what is in there so no clue on the countertops.  Generally as long as it is useable and in good shape leave it alone.  

 Thank you for sharing, Adam - Carpet on steps for extra grip is good thinking.

Quote from @Steve K.:

Quote from @Christopher Dru:

Quote from @Bob Stevens:

Ok STOP!! You are way overthinking and STOP reading!! Fencing, paint, carpet!! All you need to do is connect with those doing vs reading. You will learn more in a day then 3 months reading. I have never read one RE book or been to any seminar and have done it all. RE is not rocket science though many will make it seem as it is. Buy right, fix right, sell/ rent right. Do not even attempt to put in any offers without getting to a RE meet speaking with and walking properties with someone doing deals. You do not know what the real cost should be to reno, NO book will tell you the real numbers. So many buy as they think they know what they are doing because they read a book, it will not end well. Sorry to be so direct, I always am. I tell those what they need to hear vs want. You will thank me if you listen to what I am breaching. If you try and do it all on your own, it will not end well. I see many posts weekly, "HELP, my reno costs are double,", "The ARV is much less than I thought," "The contractor took, my money, and more.

All your questions are determined by the area you are doing the deal in. 

BTW why only 1500 -2k sq ft built around 1980s, is this what the book told you? Makes zero sense. All mine were built from 1910- 1940, 

Good luck 

 Bob - I appreciate the direct feedback and advice, and I will connect with investors to discuss these concerns and not just rely on book material. I need to round out my "book knowledge" with practical, real-world experience.

The 1980s home age range is something that I chose myself. My logic is that homes in this age range or newer would have less wear and tear and more "life" than homes from the 1920s-1940s. I'm thinking a 1980s-built home would *hopefully* not require as much in-depth renovation or have as much deferred maintenance as a 100+ year home. Yes, I'd probably pay a premium for the luxury of a less intense rehab, but as a novice real estate investor, I would rather err on the side of "newer" homes than early 20th century.

Do you disagree or have other thoughts? Appreciate your insight.

In my area the 80’s were maybe the worst period for construction: whole neighborhoods of tract shacks were slapped together as quickly as possible here during that time to meet demand. Builders cut every corner possible and used the cheapest materials and whatever labor was available. The crappiest home I’ve ever worked on by far was a 1989 build (funny because due to location it’s worth $2M now, but the build quality is atrocious). It seems to have been built by people who really did not care, and intended to only last until it was sold to the first buyer. It’s got studs on 24”, weird siding material that is basically sawdust and glue that doesn’t hold paint and blows up and turns to mush if it gets wet, a cheap slab foundation combined with expansive soil that has cracked the foundation, the layout is 80’s split-level (outdated and hard to change), the windows are crap, the roof is crap, the insulation is crap, and the hvac was set up all wrong with no air returns on some of the levels, not enough registers and returns… it’s what they now call a “sick house” for that reason (poor indoor air quality due to badly designed ventilation system). 

Meanwhile, some of my 1910 properties are solid brick construction, built by true craftsmen that still have their original features and will easily last another century with minimal maintenance. So I wouldn’t use age to determine build quality, you have to look at the building and see how it was built, there’s so much more to it than just the year it was built. We had big building booms here in the 50’s after troops returned from WW2 and then again in the 80’s-90’s when all these tract shacks were slapped together. So there was a lot of poor construction practices during those periods. Learn your market and you’ll start to learn some time periods when construction was more about volume than quality, and you’ll learn which builders and which neighborhoods are better than others, which ones have expansive soils, foundation problems, etc.

It’s not really about age though in my experience, I’ve even seen brand new builds with black mold in the walls, sewer lines broken by having heavy equipment driven over them, 1inch gaps between the wall and the window that you can see daylight through, testing positive for meth, etc. Many new builds are built way worse than 100 year old well-built custom homes. 

 Good points here, Steve, I'll definitely consider this moving forward. Thank you for sharing!

Quote from @Bruce Woodruff:

For a flip, I would use much higher quality materials and finishes

2.) Fencing:
Wood is cheaper and quicker and will last plenty long for either a flip or LTR

3.) Paint:

I use the same colors everywhere: All Behr Marquee: Ceilings = basic 001 flat white - Baseboard, crown and trim = Swiss coffee, satin or eggshell - Walls = common areas a light cream (coconut), bedrooms a medium brown  (caramel)

4.) Carpet:

No carpet anywhere ever. I will not use vinyl plastic flooring wither, it screams cheap...engineered wood is just a bit higher in price and well worth it in looks and durability. Except in an apartment rental that is...

5.) Countertops:

Countertops are quartz (not quartzite). Go to a 'prefinished' stone dealer where you can get pre-cut slabs that have finished edges. I use neutral colors like white, gray or beige.

No tile. Maybe a granite if it is not too 'busy' like the old school stuff.

Hope this helps, contact me if you have any other questions.... 

Thanks so much, Bruce - This is very insightful. I see you go with swiss coffee trim rather than white. Is this a personal choice on your end or do you find the off-white trim hides wear better than white?

Quote from @Bob Stevens:

Ok STOP!! You are way overthinking and STOP reading!! Fencing, paint, carpet!! All you need to do is connect with those doing vs reading. You will learn more in a day then 3 months reading. I have never read one RE book or been to any seminar and have done it all. RE is not rocket science though many will make it seem as it is. Buy right, fix right, sell/ rent right. Do not even attempt to put in any offers without getting to a RE meet speaking with and walking properties with someone doing deals. You do not know what the real cost should be to reno, NO book will tell you the real numbers. So many buy as they think they know what they are doing because they read a book, it will not end well. Sorry to be so direct, I always am. I tell those what they need to hear vs want. You will thank me if you listen to what I am breaching. If you try and do it all on your own, it will not end well. I see many posts weekly, "HELP, my reno costs are double,", "The ARV is much less than I thought," "The contractor took, my money, and more.

All your questions are determined by the area you are doing the deal in. 

BTW why only 1500 -2k sq ft built around 1980s, is this what the book told you? Makes zero sense. All mine were built from 1910- 1940, 

Good luck 

 Bob - I appreciate the direct feedback and advice, and I will connect with investors to discuss these concerns and not just rely on book material. I need to round out my "book knowledge" with practical, real-world experience.

The 1980s home age range is something that I chose myself. My logic is that homes in this age range or newer would have less wear and tear and more "life" than homes from the 1920s-1940s. I'm thinking a 1980s-built home would *hopefully* not require as much in-depth renovation or have as much deferred maintenance as a 100+ year home. Yes, I'd probably pay a premium for the luxury of a less intense rehab, but as a novice real estate investor, I would rather err on the side of "newer" homes than early 20th century.

Do you disagree or have other thoughts? Appreciate your insight.

Hello, everyone - I'm currently working my way through J Scott's books and taking notes. I'm a buy-and-hold investor by nature but it seems acquiring distressed properties and adding value through renovation (minor or major) is the name of the game regardless of strategy (e.g., flips, long-term rental, etc.).

📚 I'm reading J Scott's The Book on Flipping Houses to learn more about the renovation process and considerations when managing contractors, what projects provide the most value-add to customers, etc. I'm also viewing the material through the lens of my own residence to help me determine what renovations I should undertake (and in what order) to force appreciation.

🎯 My target properties are single-family homes, 3 bedroom, 2 bath, around 1500-2000 square feet, single-story, built around 1980s (suburban Class B properties in good school zone).

🧠 I'd greatly appreciate any insight on the below:

1.) Rent/Flip: How would your renovation strategy differ if the same property were to be a long-term rental versus a flip/retail sale? What would you or wouldn't you focus renovation efforts on in each scenario (e.g., painting, kitchen, bathrooms, vinyl flooring, remove popcorn ceiling, update fans, etc.)?

2.) Fencing: What are your thoughts on wood versus vinyl fencing? Do you consider vinyl fencing a value-add to the average single-family home given it's price (and durability) above typical wood fencing?

3.) Paint: What is your go-to color for interior walls? I'm partial to an eggshell white for a clean look, but I know it's not about what "I" think, it's the average customer/tenant (do you re-paint to match trends or go neutral?).

4.) Carpet: Why use carpet anywhere given it's prone to staining and not as easy to clean as vinyl? If you're renovating flooring with vinyl plank, why not incorporate it across the entire interior for a cohesive look (given the price point isn't too far off from carpet)?

5.) Countertops: Is there a countertop material (kitchen/bath) and color you'd recommend that balances durability, cosmetic appeal and affordability?

🙏 Thank you, all! Looking forward to hearing your different perspectives.

I have been reading a ton of material (including Bigger Pockets books!) on real estate investing to educate myself before purchasing my first property.

I've been scanning the MLS and been in contact with my agent for the past two months looking for a small multifamily or single family home to house hack.

Based on my local market, it's looking like a single family home will be the most realistic first purchase.

My strategy is to put down about 10% (or lower) using a conventional or FHA loan, make value-add minor rehabs to the property where needed while living in the property (live-in-flip), and then move into a different property and place a tenant in the first (and repeat over several years to acquire multiple properties).

I know there are creative methods to finance real estate deals rather than using your own cash. However, for at least my first couple of deals, I want to use my own cash to learn the process from the inside-out (and pursue other financing methods later on).

To increase my cash savings rate in the short term to cover my future down payment(s) and rehab cost, I've considered lowering my 401(k) contribution to an amount that would meet my company's match but no more. This would provide me the capital necessary to fund my real estate business and get it off the ground and also provide a conservative reserve for unknown expenses.

Effectively, I'd be making the decision that I can actively manage my real estate portfolio in a way that will generate a return better than the stock market (index funds via 401(k)).

I've been a passive index fund investor for years and the thought of decreasing my retirement account contribution is painful. However, long-term real estate investing makes sense to me and I can see the value in actively working the business as an investor over a 20+ year period.

I can always increase my 401(k) contribution back to its original rate in the future once I feel solidified with my real estate portfolio foundation.

Has anyone else taken a similar approach when starting their real estate investment journey? Thoughts on deferring traditional retirement account capital to utilize it in the real estate market long-term?

Thank you all so much for being willing to share your expertise. I love BiggerPockets!

I'm actively searching my target market for a multifamily property (duplex or triplex) that I can live in and rent a unit(s) simultaneously.

I've considered broadening my search criteria to feature single family homes with a mother-in-law suite (accessory dwelling unit or ADU).

This would give me the option to either live in the main house or ADU while renting the other. I may also qualify for a lower down payment with traditional financing given this purchase may not be defined as an investment property.

Does anyone have any experience owning a single family home with an ADU as an investment property? I know this isn't as efficient as owning property like a duplex or triplex. If/when I decide to move in the future, I could hopefully rent the main house and mother-in-law suite together or separately.

What are your personal thoughts on a single family home with mother-in-law suite strategy as a first-time real estate purchase and investment property?

Quote from @Lucia Rushton:

Quote from @Christopher Dru:

I'm reviewing some multifamily properties on the MLS and running the numbers for practice.

A seller of a triplex has the phrase "Cash or hard money only" in the property description.

Why would a seller accept only cash or hard money from a buyer? What is their incentive? If I have traditional financing from a bank, the seller gets paid nonetheless, so I'm trying to understand why they would only accept cash or hard money.

Any and all insight would be greatly appreciated. Thank you!

 ultimately it probably won't qualify for conventional financing. Does the listing also say needs work or thing similar? 

 Thanks, Lucia - No, the listing doesn't say anything about repairs or work needed. The property looks to be in good shape judging from the pictures. Maybe there are more problems lurking beneath the surface.

Quote from @Taylor L.:

The seller may know that the property won't qualify for financing for one reason or another. You may be approved for a loan, but that doesn't mean the bank will loan you money for every property.

 Thank you, Taylor - I could see that being the case as the property in question appears distressed.

However, what is the advantage of a seller placing a "cash or hard money only" restriction on a buyer - if my bank or credit union is willing to give me the loan, why would the seller be concerned?

Maybe the seller is certain that traditional financing will not be approved for the property so he/she is essentially "cutting to the chase" and searching for buyers that have guaranteed financing and won't waste their time on prospects with traditional financing getting denied.

I'm reviewing some multifamily properties on the MLS and running the numbers for practice.

A seller of a triplex has the phrase "Cash or hard money only" in the property description.

Why would a seller accept only cash or hard money from a buyer? What is their incentive? If I have traditional financing from a bank, the seller gets paid nonetheless, so I'm trying to understand why they would only accept cash or hard money.

Any and all insight would be greatly appreciated. Thank you!