All Forum Posts by: Dan Borecki

@Tim Wilkinson thank you for the suggestion! That is a really great idea.  I had never heard of  1ton minisplit units before, but I just did some research and bounced the idea off of my electrician and he thought it was a great idea too.  The addition of the AC and tenants no longer having to install window units will be a huge selling point.  Plus, your solution eliminates the floor footprint of the gas and electric heaters, so that is a huge plus too. Thanks again! 

@Jon Christensen Thank you for your input as well, I completely agree with everything you're saying. Definitely would be a big plus for the lighting and the AC addition. 

Hi, 

I have a 3 family property (built in 1900) that I purchased about 2 years ago and just recently got a home energy audit and in order to take advantage of the state of Massachusetts credit toward insulation of the unit, I am going to have to replace the below space heater because the carbon monoxide emissions are slightly above the allowed limit.  

Does anybody have any recommendations on what I should use to replace this gas space heater?  I am trying to make this replacement economical for both myself upon installation and for the tenant's future operating costs.  As far as I have gathered so far, I have 3 options, but am leaning toward the first 2 more strongly: 

1) gas space heater

2) electric heat 

3) baseboards w/ boiler in basement.  

For some background, the gas line to operate this space heater is running directly from the basement to this 3rd floor unit and is being vented through the chimney.    Overall this 3rd unit is approximately 500 square feet and when I purchased the property this space heater in the living area was the only heat source.  Since there was no heat in the bedroom or bathroom, I recently had installed small electric heaters in the bedroom (baseboard) and the bathroom (wall heater) as can be seen in the pictures.  

I recently had a plumber come to my house and his recommendation (due to the scope of work and expense of installing baseboard heat) was to just install more electric heaters in the living room area rather than incurring the costs of running piping from the basement for baseboard heat. This would probably be the easiest solution, but I also don't want to scare future tenants away by saying that it's 100% electric heat.  I am torn because I am figuring that the electric cost to heat the unit won't be too high since I will be getting the apartment fully insulated, so with that in mind I would ideally like to find a gas space heater to just replace the one that is currently installed, but it doesn't seem like these are a commonly used heating device like they were 40 years ago when this one was installed.      

Any suggestions would be greatly appreciated! 

I'm glad to hear it went so well for you.   The 10X at such a low rate is a great option to have.  You'll probably want to save those draws at the low rate for down the line since the rates will inevitably go up or at least use when you have bigger draws.  Is that what you were thinking? 

Hey Mike! Hope you're doing well!

Thank you for the recommendation, I will definitely give him a call for an estimate. That's a ton of boiler replacements! Approximately how much do those run you? Do you have any recommendations on types to go with and what % efficiency boiler do you usually go with?

Also, do you have any experience with replacing gas space heaters? Right now I have one in my 3rd floor unit. I could either just replace that unit or would have to put a 3rd boiler in my basement, run the water line up to the unit and install the baseboard heat throughout. 

Here are some pics of what I'm working with now: 

@Daria B. congrats on getting the HELOC almost completed. That will be huge to have $100K available to you at such a low rate. Is that rate just for the first 10 draws and then it becomes a variable rate or how will that work? What type of property do you have (Single fam or multi fam)? I would be frustrated in your shoes too since it sounds like you put in a ton of work and want to be rewarded fairly for that in the appraisal.

Does anybody have a recommendation(s) of licensed plumbers in the Boston, MA area?  I have a 3 family apartment building built in 1900 and am looking to replace 1, maybe 2 (depending on price) hot water boiler heating systems, as well as a gas space heater. Each of the current heating units are around 30-40 years old and fully depreciated. 

As some background, I just had a MassSave home energy audit and 1 of the hot water heaters and the gas space heater came back with above code readings of CO emissions, so I need to replace those before I can proceed with the MassSave insulation work. 

The Mass Save program is willing to give up to a $50K interest free loan for 7 years to do all of the work and replace the heaters.  The usual loan cap is $25K, but they give up to a $50K loan for 2-4 unit properties. This is the reason for why I am considering replacing the 2nd hot water boilder depending on the price. 

Thank you! 

@Edward B.  @Pete Sailhamer @Daria B. Thank you all for the great feedback and sorry for the delayed response!  I am just about to get the ball rolling on this process again. I got delayed with my full time job, working on my 2014 tax return that I had filed an extension for and just had some plumbing work done the past few weeks and got a MassSave home energy audit this past weekend. The fun never ends! 

It's great to hear the 90-100% LTV that you guys were able to get. I just made a list of about 30 local banks and credit unions and am going to start chipping away at calling them all over the next few weeks.

@Daria B. - are you going to go with that 80/20 LTV HELOC? Regarding the drive by, that was one thing I was worried about with the one lender that I had spoken to. He had given me the option to do a drive-by or a full appraisal. The full appraisal would have been around $500, while the drive by was free, but I personally would want to go with a full appraisal for my property since the quality of my units after all of the work done is much better than the average comps which I would most likely be compared to in a drive-by appraisal.

@Pete Sailhamer - How many credit unions did you have to call before you found one that would do the 100% financing? Is that something you negotiated or were they already offering that option. 

@Daria B. & @Edward B. - 

Thanks for taking the time to give me your input! 

I will definitely shop around at my local banks first and will need to weigh the options against building future relations. Good points by both of you on really digging into the terms/restrictions before committing to anything.  

I was talking to a local lender yesterday and they only do 75% LTV, but the only fee that would be charged to me would be the $550 appraisal and the $175 recording fee. Are those terms consistent with your experiences, or have you seen 80%+ LTV? I was hoping for the 80% LTV since that would give me an additional $28K LOC to work with assuming a $550K appraisal.

Hi All, 

I have owned my owner occupied 3 family property for around 2 years now, put in a bunch of work on it and am looking to get a home equity line of credit on it while rates are still low and property values are high so that I can use it for a combination of future repairs and possibly to go toward a down payment on my next investment.  

Does anybody have any tips on the process of getting a HELOC or recommendations on lenders to go through? Is it best to go through a local lender with the thought of establishing a relationship for future deals?

Details on the property: 

Purchased for $400K

Renovation costs of approx. $40-50K

Current loan: approx $390K

Estimated value based on comps: Approx. $550K

Based on 80% LTV, house would need to be over $488K ($63K equity line of credit).

Based on 90% LTV, house would need to be over $433K ($117K equity line of credit).

I have essentially no personal debt other than the property and the property cash flows approx $100/month. 

Side note: I have refinanced 2x in the past year and on the most recent appraisal at the beginning of spring, my house was appraised at $500K, but one of my tenants at the beginning of the summer purchased a 3 family almost identical in stats to mine for $540K and based on MLS have seen similar values, so that's how I am coming up with the $550K value estimate.

Thanks!

Dan

Thank you for your advice @Ann Bellamy 

I totally agree with your points that the specialty is the key, which is why I was reaching out to BP members. 

I am actually a CPA myself, but my focus is on bookkeeping side of things not taxes, so that's why I wanted to bounce ideas off of somebody.  I have already read the book "Every Landlord's Tax Deduction Guide (Every Landlord's Tax Deduction Guide)" by Stephen Fishman once which was very helpful and I am going through it again now http://www.amazon.com/gp/product/B00GP3V5AU/ref=ki...

I also have already scanned all of my receipts and documentation and have them uploaded into Evernote (which I can give the tax accountant access to the specific folders), and have also pulled together a comprehensive spreadsheet to show all of my expenditures incurred for 2013 and have broken them down into their expense type categories that I think are applicable, so my return will be very straightforward for an experienced RE tax accountant and I agree with you that there's no need for the tax accountant to be local.  

I have quickly talked to a few CPA's in the Boston area but after speaking with them they clearly didn't specialize in Real Estate. 

I'm also in complete agreement with you on the 11th hour crunch time aspect. I'm in the middle of a bunch of renovations on my property now, just started a new job in the past few months and am currently also in the middle of a refinance on my loan, so that is the reason why I filed the extension and why I am here at the 11th hour trying to wrap things up.