All Forum Posts by: Dave Versch

Originally posted by Tim Wieneke:

If you live in Manhattan, you go to New Jersey to find them.

Gotta jump in here... Where in NJ are you going to find anything that meets both the 50% and 2% rules? I've looked in urban areas, rural areas, suburban areas, in every county in Northern and Central Jersey. You MIGHT find something in the war zones in Irvington, but your chances of coming out alive are about the only "50% rule" that would really apply there.

I kind of understand where Harrison's customers are coming from. I've been considering a couple of deals in NY state. There are areas up there where you can actually hit the 50% rule, the 2% rule, AND pay a property manager. Yes, they're low income, but much more "hood" than "war zone".

Originally posted by MikeOH:

When the commode would no longer flush, they cut the sewer line off in the basement and then started using the bathroom again and the sewage formed a giant sewage fountain in the basement.

Thanks Mike. Made my night. That's some funny sh**! Get it? :lol:

Originally posted by nationwidepi:

This sounds like a class D apartment.

What does this mean? Are you just saying it's pretty bad, or is there an actual classification system somewhere?

Originally posted by MikeOH:

The problem is probably a blocked chimney. In many instances, the chimney needs to be lined.

Mike,

Thanks for the advice. What exactly does lining mean, just what it sounds like? How would that fix a blockage, and how much might that cost?

I'm under contract to purchase a 2 family house in Buffalo, NY. I had an inspector check the place out today, and he found CO levels so high in one of the units that he had to call the gas company to come and shut off the heat for that unit. This unit is heated by this ancient combination stove/furnace thing, which is the apparent cause. (The other unit has a separate furnace and uses forced air, and doesn't have a problem.)
I'm planning on insisting that the seller remedies this situation, but I'm wondering what the best resolution might be. My first thought was to suggest shutting the gas, capping it, and installing electric baseboard heat in that unit. Problems with that though are (1) the tenant's electric bill will go through the roof - it gets COLD in Buffalo, and (2) they'd probably have to purchase a new stove so they could still cook, so they'd still need gas. I don't mind if the seller purchases a new stove, but I'm sure if the electric bills go way up, the first bill the tenant will sacrifice will be my rent.
Any suggestions? Has anyone experienced a similar situation?

Originally posted by Masa Don:

You need to be cautious of moving to an LLC if you are looking to refinance. I was told by my the bank that if you title under the LLC that you will have to put the property back into your name for six months before they will accept a refi.

Has anyone else heard of this?

Yes, I was told the same thing just last week by B of A. They didn't specify 6 months, but they said that if i wanted to refinance at any time I would have to put the title into my name, do the refinance, and then move it back to the LLC.

Josh,

I can't believe I'm saying this, but try Bank of America. I just went under contract for $21,200 loan (cost of 2-fam house was 26.5K, so 80% LTV). BofA is doing the mortgage. Rate is 6 7/8% for 30 years with 3 points. I know it's high, but at these amounts the actual dollar difference between 5 7/8 and 6 7/8 for example is trivial.
The only catch is the LLC. They told me I'd have to purchase the house in my name, but that after I made my first payment I could transfer title to the LLC.
They're a huge pain in the butt to deal with because they're just too damn big and you'll have racked up hours on hold by the time you close, but if that's the only way...

Originally posted by Tim Wieneke:

Is this property in New Jersey? Also, are you sure the property is 1800 s.f.? Are you adding the basement into that square footage?

Property is in NY state. The 1800 sf includes both storeys of the 2 family house, but not the basement.

The consulting firm sounds like a good idea. There's obviously a need...

Tim,

Got it. Depreciation is the issue. I wasn't aware that the insurance company would account for depreciation in an ACV policy claim. However, in my situation, I'm paying about 30k for the house. The ACV policy, including 500K liability and 2500 deductible will cost me less than $400 per year. I checked with the agent today, and he told me that an RCV policy with the same parameters would cost around $14-1500 per year based on the size of the house. He said he'd have to insure it for 180,000 based on 1800 sq ft. The difference of over $1000 per year eats up a HUGE portion of my cashflow, and is actually about the same as I'd lose in depreciation each year under the ACV. (I'm assuming they do straight line over 27 years the same as for taxes.) So if I pay the extra premium for the RCV, I'm definitely out an extra $1000 or so per year. If I go with the ACV, I'm only out the $1000 per year in depreciation if there's a total loss. So in this case, to me at least, it looks like my better option is the ACV.
Am I thinking about this the right way or are there other issues I'm not taking into consideration? I'm obviously not an insurance expert... :D

Originally posted by Tim Wieneke:

Go replacement cost. Believe me. I've adjusted almost 1300 property claims. You want replacement cost. If you need to know why, let me know and I'll post a much longer message.

Why?