All Forum Posts by: David Lee Hall, III

Seeking an opinion here.

I am remodelling one of my places. The kitchen is a mixture of original house (circa 1900) and addition (unknown). There is a hole punched through the original foundation that is sizable but not really enough room to crawl through. Supply and drain plumbing run through this space for the sink & dishwasher as does the gas stove feed and some electrical. The crawl space was not really properly constructed in that was build with some basement concepts and come crawl space concepts. e.g. the insulation was in the joists with facing down - yet the mechanicals below that and with the opening to the basement, it is a "semi heated space" - which is good because the water lines are not insulated. A normal crawl space insulated in this manner would have vents and be a cold space. The floor is out of level and there was some rot from a dishwasher leak over the years so I am pulling up the sub floor, sistering joists for a level floor, and re-installing. 

My question is on the insulation. As supply lines run through here my thought is to put a vapor barrier on the ground (none currently) and insulate the crawl space walls to make it part of the living space that is the basement which it is open into. My opinion seeking is on the cinder block wall insulation. Given the space is only 2' high, getting foam board in and glueing it onto the block would be difficult. I like the idea of a C-Film wrap (C-Film | Super Six™ Basement Wrap Material https://polytarp.com/c-film/) that I saw in a video a few years ago, but that doesn't appear to be available in the states. I was planning to fill the sill/joist space with foam and kit any cracks with it as well to make air tight. So my question: any thoughts on insulating the crawl space walls and recommended products or suggestions?

@Marcus Auerbach - I second the ozone generator. I really need to buy one of those. 

(I do Kilz the floors and baseboards though!)

Make sure you check out ductwork. If a dog is peeing in a vent there can be some nastiness in there that needs special attention. 

I would get a little creative if you want the place. Since it is month-to-month there should just be a 30day notice to get them out. But - odds are they will be sitting there on day 31 given the details. I would just talk with them and you could go two routes. One let them know you are moving in after closing and tell them they won’t be renewed so should start looking now before they end up on the street. The second is let them know they are well below market rent and ask them if they can afford the coming rent increase. Assuming they say no, again advise them to start looking now. If they don’t pay the last month rent or anything that is on the current owner, but you are setting expectations for them that they should expect to move even if the current guy won’t. Take ownership of the issue. If they balk or trash the place you can then cancel before closing.

@Joe Gonzalez is right. This is where you want to have lots of tools in your toolbelt. 70% of ARV/65% of ARV, 1% rule, etc. are all great until you realize none of them work. This is one place I think Lou Brown excels at with his focus of finding buyers first. If you know that you have a buyer that could take over a $2,000 a month payment, you could make some money bringing that buyer and your seller together. However, if you are following strictly traditional metrics, you are likely to leave opportunities on the table. This type of deal is the type that makes me believe marketing to buyers (both of investors class and un-lendable but cash flush owner occupant) is frankly more important than marketing to sellers. Now if *I* would only follow that thought through and do the same...

While irresponsible, how is it different than the Realtor represented buyers that back out of contracts screwing sellers? A normal buyer would have never gotten a loan on a house if that type of offer was really made. They would have been coming back to renegotiate or cancelled. Would you blame the buyer agent for their clients being jagoffs? The reality is the Pareto principle. Most people just aren’t good at what they do.

My lease specifically addresses this. If in the first 30 days it is my responsibility. If after 30 days it is the tenant. What does your lease say?

As @Jerryll Noorden said, it is to support your offer price. I have sat down with my iPad before when sellers don’t know how much their house is worth to educate them. It isn’t about scamming someone out of a property for nothing but rather helping them solve a problem. That problem just happens to be a house.

Joint venture with another wholesaler - split the profits (see this all the time). Send direct mail to cash buyers in the area. Go to REIA meetings. Post "listings" on Craigslist and capture the respondents.

This is not legal advice. These are pertinent clauses from my standard contract reviewed by lawyers in my state. Please consult a real estate attorney in your state - it will be worth the investment. (Sorry it didn’t copy perfectly)

Note this is all part of my “as-is” contract- there are numerous outs I can use if needed even though I have only used them once or twice. I think I have only had a seller question things once or twice. As part of the contract for the last yeah I have a plain English summary letter that explains every paragraph in 1 sentence. This has helped greatly reduce actually questioning of the contract verbiage.

6) PROPERTYINSPECTIONCONTINGENCY:RegardingtheHomeInspectionLaw(68Pa.C.S.A.§7501,etseq.) property inspection isa non-invasive,visualexamination ofsome combination ofthe mechanical,electrical or plumbing systems or the structural and essential components of a residential dwelling designed to identifymaterialdefectsinthosesystemsandcomponents,and performedforafeeinconnectionwithor preparation for a proposed or possible residential real estate transfer.The term also includes any consultation regarding the property that isrepresented to be an inspection or that isdescribed by any confusinglysimilarterm.Buyerreservestherighttoconductinspectionsand professionalevaluationswithin
30 daysofthesigned Agreementforany ofthefollowing:general propertyinspection,wood-destroying insects,underground tanksand wells,septicsystems,toxicchemicals,and environmental hazardsincluding but not limited to asbestos, mold,fungi,radon or lead-based paint, property boundaries,or deed and use restrictions.Buyer reservesthe rightto VOID thisAgreement based upon the resultsofany inspections, a) WATERANDSEWAGECLAUSE:IfPropertyhasnon-municipalwaterandsewagesystems(e.g.wellor
septic). Buyer reserves the right to have invasive testing of said systems to determine functional obsolescence or repair need.Seller understands that recommendations of professional services may impact Price.Should repair or replacement be warranted. Buyer agrees to give Seller one-thousand- dollar($1,000.00)credittowards needed servicesatSettlement.Additionalcostsabove and beyond thisamountforremedyoffaults,asdetermined byBuyerselectedthird-partyprofessional,shallbe deducted by Broker at time of Settlement from Paid From Seller's Funds unless agreed upon in writing bySellerand Buyer.

11) ASSIGNMENT: Buyer has the rightto transfer or assign allof itsrights under this Agreement without written
consent of Seller.
12)MARKETING:Buyermay marketthePropertyas"EorSalebyOwner"priortoSettlementDate.Upon
execution of this Agreement, Seller gives Buyer permission to market the property in the Multiple Listing
Service(MLS).
13)RECORDING: ThisAgreementmay berecordedintheOfficeofRecorderofDeedsoranyotherofficeor
placeofpublicrecord.Ifa noticeofthisAgreement isrecorded,the Buyer may record a Noticeof Termination of said Agreement ifthe Seller defaults in the performance of the Seller's obligations and responsibilities herein and such termination shall be effective ifno legal proceeding isinstituted and lis pendensisfiledbytheSellerwithinthirty(30)daysofthedatesuch NoticeofTerminationwasrecorded

Like many have said, I only use price per sqft if I haven’t seen the house. Usually I start around $50/sqft and go up if there are big ticket items. BUT I deal in a lot of $50k houses which you can just throw this model out the window for. I am in Appalachia so costs will be higher on your end of the state.

Why price per sqft tends to be so inaccurate is because finishing needs to match your comps and every dollar isn’t created equal. A $20,000 French drain may let you sell a house but isn’t going to draw in multiple offers like a putting that same amount to a master bath. Numerous books, including one of my favorites, uses the sqft method. I find it really only reliable when houses very similar and I know the price to get an accurate sqft rehab price for my market. That information doesn’t come from a book, rather experience (yours or a mentors).