All Forum Posts by: Don Petrasek

@Drew Johnson  welcome to BP.  Live in Westlake and have had a two family in Lakewood for about 13 years.  Feel free to reach out if you have any questions.

@P.J. Bremner  I had essentially the same back up issue at the house I live in which is a couple of cities west of Lakewood.  The city's stance on the phone was that they weren't responsible, but I sent them the bill for clean up (e g Servicemaster) and they reimbursed me for it.  It might be worth just drafting a letter yourself to the city (probably send it to the Service or Law Director) and see what happens.

As for the pre-existing damage you found behind the drywall, you should definitely contact your realtor and see if anything can be done with that.  It seems logical that the pipe damage was there for quite some time and it sounds like the previous owner may have just dealt with it but then didn't disclose it when it came time to sell.   Having said that check the Ohio seller disclosure form, I think the question is if there's been flooding in the last 5 years...and potentially it hadn't flooded in that period of time but we have had major rain events over the past 5 years.  I recall one that was probably 3-4 years ago that put about 3 feet of water in a house I own in Cleveland (whole street gets water pushed back thru sanitary lines due to an issue in the main).  Hopefully your contractor got good pictures. 

@Amit M. dishwasher went bad in the unit above a condo I own and no one was home.  Flooded my entire hallway into bedrooms, lots of ceiling damage.   No way to stop it.

Welcome to BP @Michael Ford...feel free to reach out with any questions you have.  happy to help where I can. 

@Cameron Snyder as others have said, don't stay married to a strategy that isn't going to pan out.  I've been in a few situations where I planned to flip but either the house or market didn't cooperate & I ended up renting a few years then selling.  Let the tenants pay off your overspend. Take a look at the tax difference from that approach, its been significant in my case.  

Even if you go with the flip strategy and end up breaking even or loosing some $, getting the experience is well worth the investment.  I have friends who have spent $20k on guru courses and coaching and they'll all tell you that they wish they would have put that money into real projects...even if they were done at a loss.

I've used Allure Trafficmaster which is 3.8mm @ $1.79 probably the same stuff @Josh Dillingham mentioned.....and its been installed for years in a couple of rentals and in my Lake cottage.  It has held up great even in high traffic areas.  Most people have no idea its vinyl flooring, you'll be surprised how realistic it looks.  If you're installing yourself just make real sure that whatever you're installing it over has NO imperfections......even very small humps, holes, cracks will eventually show thru because the product is so flexible.  

@Thomas D. I just finished a conventional cash out refi with First Federal of Lakewood. They were investor friendly & did a good job. Also did one with Huntington recently - would recommend them as well for conventional. they had a good non-conventional option as well that I ended up going with (15/1 ARM, fixed for 15 yrs then 1 yr ARM - rate was lower than fixed).

I think Dollar Bank will do your loan as a blanket across multiple properties but any bank that will do this will be doing it as a commercial loan which means adjustable rate -fixed for maybe 5 yrs then adjust or balloon.  

You should always go with the longest amortization possible for investment property financing....for conventional that's 30 years.  You can always make the 10 yr payment on a 30 year mortgage and pay it off in 10 years without a penalty.  The rate may be a little higher on a 30 yr,  but having a much lower min payment is for sure worth it in case anything unexpected happens.  

PM me if you want loan officer contacts at the banks I mentioned above. 

@Michael Dubiel I set up an LLC with two partners and an operating agreement that defines ownership interest as the % that each member's capital account represents of the total of all 3 capital accounts. The operating agreement also defines what's considered ordinary management of the LLC and what's not. For items that aren't, any member that performs those gets paid in the form of a credit to his capital account. So I put up most of the $ initially and owned a large percentage of the LLC to start, but the other partners have done work on the property (that we would have otherwise had to hire out) and increased their interest as a result (without having to contribute cash that they didn't have). This has worked pretty well but the downside is that the credits to the capital account are considered taxable income.....

No matter what you do, you guys need to have a detailed written agreement upfront as to who is doing what, when, how much and how that affects ownership interests. Especially with you taking on most of the work. Maybe your brother should be lending to the LLC and you should be getting paid for all the work you do....after that you split all the profits. To compensate him for the lending risk, maybe you agree to cover part of any loss he takes on the loan to the LLC.

My brother in law was the other member in another LLC and we had a verbal high level 50/50 split agreement. It went well for a while and then he stopped finding the time to spend on the business.....luckily we were able to amicably part ways - otherwise it would have been a disaster.

I'm getting $925 on two of them - I pay water and sewer up to $75/month & then bill the difference to the tenants.  Its a bit of administrative work, but caps my cost.  I tend to keep my rents a bit below market to attract the best tenants....I don't think you'll have any trouble at $875 or $900 with tenants paying water. 

@Sunny D.  I have 4 singles in that area.  Its a strong rental area and I have no trouble finding good tenants...most stay at least 3 yrs.  I'd recommend staying North of I-71 though, things get a bit more difficult once you cross over the highway (going South).....not terrible, you can still make it work but you're definitely going down a grade or so. 

I am amazed at how many houses are pending in that area right now, it wasn't too long ago that you would have had your pick of 12-15 listings that had been sitting around a while.  The good news is prices seem to be starting to rise, I've seen some $80s $90s and even a six figure comp in that same neighborhood.  haven't seen that since about 2006...

had one of these people copy a Zillow rental ad including pics and post it on Craigslist......at $150/month less than I had it listed for.   Took almost two weeks for me to get Craigslist to take it down.  

Had a couple people contact me who had responded to the fake ad and showed me the responses + fake leases they got (along with request for security deposit).  The English was ridiculously bad and the lease appeared to be from the UK.....in spite of that the two people that approached me said they almost fell for it.  His story was that this was his sick aunt's property and he was trying to handle it for her from out of state.  

I've heard stories from other landlords of people showing up at their house with a moving truck after paying deposit to a scammer.....or even in the house when they get there- scammer makes up story about lost keys and just tells them to get in any way they can.

Lesson I learned: put my ads everywhere - I think they are way less likely to do this on a site that's already got the legit ad. 

I did actually contact Cleveland PD about the situation....their response was nothing they could do until a crime was actually committed & even then probably no way they could find the scammer.  Also said Craiglist no longer accepted their calls.....