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All Forum Posts by: Kent Harris

Kent Harris has started 21 posts and replied 80 times.

Post: Why do I need to use Hard money?

Kent HarrisPosted
  • Real Estate Investor
  • Katy, TX
  • Posts 81
  • Votes 20

Wayne, 

Is it worth getting an HML Loan when I am having to pay $2,100 Origination fees, $900 for two appraisals and on top of that Pay $1,166 for two months worth of financing? I have enough in my equity line to purchase two houses at a time and do the renovations. I don't like to pay more then $25,000 on each property out of pocket or I will start running out of money very quickly. These are buy and holds so I don't do flips. Each time I purchase a house my closing costs run around $10,000 going from Cash, to Hard Money, to Conventional. There is so much competition to buy distressed property in the Houston market this is the only way I get 90% of the deals.

Post: Why do I need to use Hard money?

Kent HarrisPosted
  • Real Estate Investor
  • Katy, TX
  • Posts 81
  • Votes 20

I recently purchased a house for $120,000 in cash. The cost approach on the house is $185,000 after renovations. If I go through a conventional lender they are requiring me to use a hard money lender to renovate the house. The Hard Money lender is charging me 3 points. 2 on the front end and 1 point on the back end. Total closing cost will be $4,700. $2,100 of that will be origination fees. When I did a cash close my closing costs were only $800.  Why is the conventional lender requiring me to go through a hard money lender when I have the money to do the renovations? The Conventional Mortgage company said they can only loan me $90,000 or 75% of the cash purchase price, If I don't go through the Hard Money lender. If I do go through the Hard Money lender they will loan me $138,750 after the renovations are completed.

Post: Installing an HVAC System and Electrical Box

Kent HarrisPosted
  • Real Estate Investor
  • Katy, TX
  • Posts 81
  • Votes 20
Originally posted by @Malcolm Boston:

This is an opportunity to learn a useful and valuable skill. Laying out HVAC and electrical is fairly straightforward and you have the opportunity to save a bunch of $$$ while being safe and legal. My recommendation is that you do NOT plan to make the final connections for your HVAC. Also do NOT plan on running wire between your electric meter and your service panel. Leave those to the licensed professionals BUT, watch them do it!

Step 1: Go to your big box store and purchase a book on "Advanced Wiring". Go on the internet and purchase HVAC Manuals J, S, T, and D. Read them all cover to cover.

Step 2: Perform your HVAC layout and equipment selection per the manuals. Having a system designed per these manuals means you have a state of the art system and the engineers at ACCHA have done all the hard work for you. Your system will be quiet, effective, and energy efficient. Don't forget to consider reflective barrier and upgraded insulation. Compare your layout to the equipment that you are replacing. You may be pleasantly surprised to find that your JSTD system requires a smaller (i.e. cheaper) air handler and condenser than what was there before.

Step 3: Write up your permit application with emphasis on the fact that a professional will make final connections and do all refrigerant handling. You can check your work the first time by googling your local construction engineer and hiring them to perform a JSTD design for your structure. See how close your design is to theirs. Ask copious questions! Engineers love to talk, especially when people seem genuinely interested in their craft. Secure your permit and hire your HVAC technician to evacuate your old system. Try your local community college or vocational school to see if they want to do a learning experience. Ask them if they want to practice installing new stuff too - you might get lucky.

Buy your new equipment for $3000 and install it into its position. Run your ductwork per your design. Seal your ducts. Fire up your air handler to test for leaks. Bring in your refrigerant tech to brace your copper, pump your line set down, and release your Puron.

Electrical

Get your wiring plan permitted per the book. Hire your electrical contractor to upgrade you between meter, outside disconnect, and service panel. Pass inspection. Begin running your branch circuits per the approved wiring plan.

This will be a lot of work but you now have a valuable and lucrative skill that will serve you well on future projects. And you will not have violated any laws. FYI you can get refrigerant certified fairly easily and cheaply but you may decide it's diminishing returns to invest in the specialized equipment to perform the work. Being able to buy your own equipment is probably savings enough. Your choice. Same thing with the electrical. Once you understand how service entry cable is selected you will likely realize that meeting Code downstream of the meter is good enough for rehab work. Just do a load calculation for the structure and either replicate what was there with modern wire or upgrade to 200 amp service. Either way, your can rely on the final inspection. Once you learn the lingo and how to inspect you will likely find out that you can hire the right talent off Craigslist and then check their work to make sure it's right.

Good luck!

The electrician gave me a bid yesterday. It was $375 to run the 200 amp cable between the meter and the box. There supposed to give me a bid today to run a disconnect to the HVAC unit. As far as getting the equipment to do HVAC work. The equipment will be a lot cheaper then hiring someone to do it. The lowest bid so far was $2,800 for the 3 units (Compressor, coil, and Furnace) and $3,400 labor! 

Post: Installing an HVAC System and Electrical Box

Kent HarrisPosted
  • Real Estate Investor
  • Katy, TX
  • Posts 81
  • Votes 20
Originally posted by @Bart H.:

Your $750 seems like a solid quote for a changing out the electrical box.   I would take that in a heartbeat.  I cant imagine that you are saving much if any money trying to do it yourself.  Plus you are opening yourself up for a lot of risk, and are you sure your city wont charge you to pull a permit?  In Dallas they wont come out and reconnect until there is a green tag on the box.

To be honest, of all things to mess with, why those two (AC and electric panel?  If anything install some light switches and paint.

$750 is keeping it at 100 Amp service. If I want 200 Amp Service it will be $2,200. What I'm going to do is have the licensed electrician mount a new box with a 200 amp breaker and run the 4/0 gauge wire to the meter. I will do the rest of the wiring and mark the connections accordingly.

Post: Installing an HVAC System and Electrical Box

Kent HarrisPosted
  • Real Estate Investor
  • Katy, TX
  • Posts 81
  • Votes 20
Originally posted by @Santos Collantes:

Hello Kent Harris I just did a 3 ton on a flip I'm doing and rewired the whole house, if your interested in seeing the setup. Passed the cities inspections. Sheetrock goes up in the next couple of days if you would like to see it. Let me know if your interested.

Santos

I just sent you a private note with my contact information. I was looking for your friend request and couldn't find it.

Post: Installing an HVAC System and Electrical Box

Kent HarrisPosted
  • Real Estate Investor
  • Katy, TX
  • Posts 81
  • Votes 20
Originally posted by @Don Meinke:

I know for SURE you cant have a 4 wire junction box or ANY box in am enclosed ceiling.  That means no access cover visible in ceiling you can get to.  What is NOT allowed is to drywall over or hide in a drop ceiling.

Here that is a moot point anyway.  We come UP from the basement for the wall outlets.  Lots shorter and more direct cause the box is also in the basement.

Heres what "I" do,,,use #12-2 with ground 4 wires total,,, that nobody LIKES to work with cause it is so stiff.  Put 3 or 4 outlets on 1 circuit and run another circuit to next.. Double up those outlets more than the code allows,,,like every 4' or no more than 6' apart.  Reason is the less extension cords the better.  Put them everywhere,,,they will only use so many anyway.

You NEED grounded for some items like computer, some appliances, generally a vacuum cleaner, modern tv's etc.  Those houses out there with the old 2 wire,,, or 2 and skinny ground wire,  or heaven forbid knob and tube,,,,needs rewired.  If you can add extra modern plugins between the non grounded better than nothing.  Then you could come back and replace those later if needed.  IF your house has knob and tube,,,,anyone reading this,,,you WILL have a tough time getting or keeping insurance,,,its so small and disfunctional it is really dangerous.  They just skinned the wire and spliced in wherever they wanted.  The MOST used to join them was black tape.  Most were not soldered or nothing,,,just wrapped

Okay,,,,wall outlets 12 wire,,,ceiling lights can be easily on #14 wire,,,especially if you put all cfl OR LED lightbulbs in unless you have ceiling fans.

Of course all circuits have to be on gfi's or gfic's as code determines.  IF you ever have drywall off or walls open dont pass on doing all you can both plumbing replacement and WIRING...Just my .02 cents from a die hard do it yourselfer,,,NOT a licensed PRO

I just got a quote from two electricians, one licensed and one not. The non-licensed tech wants $750 to replace the box and keep it at 100 AMP service. The licensed tech wants $2,300 total and will bring it up to 200 amp service and replace the Copper Feeders from the meter to the panel for $325 and install 2 GFI's one in the kitchen and one in the master bath for $170. He will also install an Acorn Style Ground Clamp.

In Houston we get 2 inches of rain an hour and the last big storm back in April of 2016 we got 17 inches of rain in 24 hours. Needless to say we don't have basements here. If your nice cement pool is buried in the ground without any water and we get a 17 inch storm coming through, you will hear a loud explosion in your back yard, and you go running out and your cement pool will no longer be in the ground! Even coffins were floating during the last storm and family members of the buried party were not too pleased.

Post: Installing an HVAC System and Electrical Box

Kent HarrisPosted
  • Real Estate Investor
  • Katy, TX
  • Posts 81
  • Votes 20
Originally posted by @Greg H.:

There is a company out of Austin that will travel up to 4 hours to do installs.  The costs including installation should be less than $3500.  Pm me for the details

 We should be cleared to close next week. The house inspector came by on Friday and said the electrical panel has arced and the master breakers had been removed. Which is in total violation of the electrical code. The electrical panel is going to be the first item replaced once I own the house. 

That is an excellent price. I will PM you once I own the house. 

Post: Installing an HVAC System and Electrical Box

Kent HarrisPosted
  • Real Estate Investor
  • Katy, TX
  • Posts 81
  • Votes 20
Originally posted by @Don Meinke:

It helps to be helped by a licensed tech.  What bites is there is a bazillion code set backs, space requirements, separation distance, clearance etc.  Like electrical they have certain bonding and ground rules of things you cant do and have to do.  Unless you have 'some' direction on these its hard to get right.

That being said some of the trades guys dont like doing grunt work,,,like rewiring an old plaster walled house that sported knob and tube crappy overloaded...looking for a place and time to burn.

Electrician (licensed) says you drill holes and pull wire in, label everything, it doesnt take a rocket scientist to pull wire in place.  He said 'MINIMUM' of 5 to 6 K if I do all of it.  Otherwise you pull wire and I hook stuff up for a few hundred.  The scope increased by replacing the old dangerous box too.  He hung the box and made all connections in there(Translated means pro neat job).  Bonded it grounded it.  He told me to start with all the plumbing had to change to get seperation.  Hooked up my 3 way switches and all the 220 stuff . Let him come and go do emergency calls as needed.  think he worked most of 4 or 5 days partial hours,,,bill was like $750 which I thought was a good deal compared to  minimum of 6-8K or more if he did it all.

Looking back on that it took me a few weeks to do my part.  IF I would have had even a small person,spouse,or ANYBODY that could see and hear a wire wiggle in a wall and reach for a cold new wire with NO hot stuff anywhere would have saved half my time.  Crawling up to attic,come down to see,crawl back up to push farther thru etc takes a long time.  You could chase numerous wires at a time with help.

Now I had a guy who was not licensed put in a HVAC system.  That did not end well at all.  Ended up moving , ,change water heater locale, washer and dryer into kitchen where didnt want it.  Wrong gas line.  Required reccertifiying by license HVAC which costs about as much as a new install,and pro plumbers under inspection that cost way way too much for what they did

So long story short,,,,maybe.  You start out thinking this is easy and find nothing but headaches.  I dont touch HVAC at all.  I dont have the skill or knowledge or tools to do it right.  Plumbing and light electrical I can sneak some within the rules.  And YES It does make a diff here if you live in the house or rent it.

My advice,,,do it right

 Excellent advise I used to run Cat 5E cable when I worked in the IT field. Four devices are your friend. A crossbow pistol in the 80 pound range ($40 on Amazon), blue draw string, powerful directional light, and a metal snake. The crossbow gun is to fire the blue string across the ceiling. We would tape foam rubber to the tip as to not break anything in the ceiling, you would use the snake to drop the string towards the light. Once you got the blue draw string in place you would tie the wire to the string and pull. It is easier doing data cable since you only have one data drop per room. With electrical you have to do 4 drops per room and more in the kitchen and living room. Not sure if it is legal to have junction boxes in the ceiling to splice between 4 outlets in a room.

Post: Installing an HVAC System and Electrical Box

Kent HarrisPosted
  • Real Estate Investor
  • Katy, TX
  • Posts 81
  • Votes 20
Originally posted by @Ryan Booth:

For the new main electrical service, $750 is a very reasonable price. I would go with that. 

As far as the A/C, Here is my suggestion. 

1, Working with a 40 year old house, you'll want to put in an all new duct system as well as equipment. And don't assume the original system was designed right, it is almost certainly sized wrong. You can design your own duct system, spend a few hours reading up on it and on youtube, and you'll probably do a better job then 90% of the HVAC contractors out there. Be sure to read up on how to seal duct work properly.

2, Pick up the phone and call a few HVAC companies, tell them you want to pay them by the hour at their service call rate or higher to come out and remove the refrigerant from your old system. 

3, Buy and install all your new equipment, spend plenty of time reading the manuals and watching youtube videos on how to do it. And silver soldering (Brazing) copper pipe isn't that hard, just practice a few times first. Be vary careful on proper flue and vent design for the furnace, you don't want to either burn the place down or kill someone with carbon monoxide. 

4, Call up the HVAC company and have them charge your system by the hour plus refrigerant costs. You may have some trouble finding one do to liability concerns and or they may want to spend extra time looking the system over before they charge it. 

The downsides, 

1, The equipment manufacturer probably won't warranty the equipment, since it wasn't installed by a certified/professional installer.

2, You'll still probably spend more then $1000 for the HVAC company to remove the refrigerant from the old system, then charge your new system by the hour (Think $120 a hour) Plus the refrigerant costs. And they won't be providing any warranty at all, since they didn't install the system. 

3, if it doesn't work, your on your own to figure it out. 

4, You'll have probably 1 to 2 days full time installing all the equipment, Plus a day for the ductwork design and install. Plus a day researching and figuring out how to do everything. Those are very rough estimates as I have no information on the size of house or system.

If you have the time to burn, give it a try. The worse that will happen is you'll end up paying an HVAC company to go through the system and fix any mistakes you made.  On that note, a good HVAC tech is hard to find, be sure to call around. Ask if they are "NATE" (North American Technician Excellence) certified, not a guarantee, but at least shows they make an effort to keep themselves educated. 

That's the thing. There are a lot of HVAC contractors out there. The last thing I would do is volunteer information that I had installed the unit myself. Me being in the IT field for many years have seen my fair share of shoddy workmanship, a couple of times I had thought to myself that the customer had did the work himself. Instead of blaming the customer I would fix the problem and send them the bill. The companies selling the HVAC units would think that I was purchasing it to have it professionally installed. Short of crossing the hot wire and ground and installing the wrong size tubing those units are virtually indestructible!

Post: Installing an HVAC System and Electrical Box

Kent HarrisPosted
  • Real Estate Investor
  • Katy, TX
  • Posts 81
  • Votes 20

I have an HVAC guy I have used for years. He is way overpriced except he is honest. We had a falling out last summer. He had charged me $2,200 to remove and replace the 3 ton compressor unit outside a year before. The unit went out 10 months later and he started blaming the tenant and also blamed the evaporator coil in the attic for burning out the compressor. He said the evaporator coil in the attic was a 2 ton and the outside unit is a 3 ton. If this was the case wasn't it his job to verify that the whole system was working in the first place? He had swore up and down the unit was out of warranty. I had found the certificate and had 8 weeks left on the labor part of the warranty and 5 years on the compressor (He absolutely did not want to work on it since he was pulling 16 hour days!). Granted the tenant has the AC cranked down to 72 F and the unit was probably running 24/7 during the summer.

On the new house I just purchased since it's going to be a rental my best line of attack is to get a Home Warranty on it. The HVAC unit is still working and so is the Electrical. I have a home inspector going out this Friday to look at everything. As my wife told me yesterday. "If it ain't broke don't fix it!" A Home Warranty will run me $533 a year plus $65 a service call. The only thing the home warranty won't cover is the refrigerant and pulling new refrigerant lines. The most I would have to pay out of pocket is $700-$800 a far cry from $7,000! As far as the electrical, as long as the box isn't a Federal Pacific then it won't have to be replaced. The house only has 100 amp service except I would have to check with the home inspector to see if CenterPoint Energy has pulled 150-200 amp lines going to the house. The house is equipped with a smart meter so some upgrades have been made.