All Forum Posts by: Frank Maratta

@Pat L.

Do you know if I can run a dehumidifier in the winter? As you mentioned, my naviens do not help much heating the basement.I heard the coils on a dehumidifier will freeze if run in the winter

@Ben M.

Here's a solution. BRRR the property. No cap ex needed :)

@John Chapman

For my good long term tenants I do not raise the rent until they are 20% to 15% below market rents. Good tenants are hard to find and I would rather collect less money then risk losing them over an increase. Once they are under 20% market it makes sense for me to start thinking about taking the risk of raising rent. But I don’t bring them up to market, I still stay about 10% below to try to keep them. If they stay, great, if they move out - then I get a renter at market rate.

Hi guys

I have an older two family which has such high levels of humidity in the basement that I am constantly replacing joists and other wood due to rot. I think the best option is to run a dehumidifier.

In this basement I built a small 10x10 room in the corner with a locked door for my “boiler room” with my two wall-hung Naviens and other things I keep for storage that I don’t want my tenants touching. I would like to put the dehumidifier in this room so none of the tenants mess with it (and also because there is an outlet in that room)

My question is: will the dehumidifier “suck” the rest of the humid air from the rest of the basement into this room? The room is not completely air tight, there are gaps near the ceiling joists that would allow air flow.

So before i go out and spend $400 on a dehumidifier with a pump, will this work? Or does the dehumidifier really need to be in the open area of the basement. I am planning on leaving it running full time.

Also anyone know what the electric cost is per month to run one of these things full time?

@Brendan Chetuck

I always gut the knob and tube in the multis I buy. I typically spend around $7000 per duplex including labor, fixtures and wiring and all other material. Most of the time electricians gut the knob and tube in the basement so you think it’s gone, but they just resplice it once they get into the wall. It’s better then it was, but no ground. You can test the outlet by buying a simple plug in ground tester to see if they completed the job the right way.

@Matt Pastier

Yes they restricted me to a primary residence as well and I had no issues with that aspect even though the property I bought was an investment property.

@Matt Pastier

I took a loan out of my 401k to complete my last BRRR. And yes a personal loan is a 5 year amortization but a primary residence is a 20 year. Just had to provide them a copy of the sale contract. I anticipated my budget and took the loan out and provided the contract when the contract was actually signed (the date on the contract has to be current so you validate your claim for the 401k loan going towards the house - I have gotten denied before on another deal that had problems at closing because the date was past the 30 day mark). They didn't make me prove that this was a primary residence either. The check showed up in the mail within a week.

Some people make the arguement that taking a loan out of your 401k is a financial disaster since you are paying interest that has already been taxed to go back into your 401k. And if your were to empty your 401k this would then get taxed again. Also I believe the 401k does not grow as much as it would with the loan against it due to missing out on dividends. I am not sure on this if someone could enlighten me.

My thoughts are that a 401k loan is OK to do. I don’t know any other loan you can take out that you don’t pay interest on other then life insurance (which not all of us have). I have 1/4 mill in cash reserves right now and I owe $30k to my 401k. I could pay it off but I would rather have access to the cash for a down payment on the next apartment building that comes into my sights.

To answer the OPs question, I would not empty your 401k until you have more expierance with real estate. I would take the loan rather than empty the 401k. You can take out a loan on 50% of your 401k balance. I am not against emptying out the 401k either, but wait to do this until you are confident you can get better returns in real estate than your 401k does. I plan to completely empty my 401k when I quit my day job. And now might not be a bad time to do it with the uncertainty surrounding the economy.

@Terri Donovan

I thought the new property had to be of equal or greater value? Could be wrong.

@Sam Leon

If your 4 months into the lease I would see if you can get an extra security deposit as someone else mentioned and just do regular inspections. See how they are treating the apartment. And then re-evalutate the rental amount based off the inspections come renewal. Be open with them and explain your plan. They may change their habits if they like the place and don’t want an increase in rent come lease renewal. Or, they will start looking for places in advance and be prepared to be out of your hair quickly come renewal. Vacancies and evictions cost an arm and a leg -I do whatever I can to minimize them. Even if it means taking more wear and tear than normal. But that’s just me. Your other option is cash for keys. Do the inspections and keep a regular eye on the rental and make the most cost-efficient decision you can.

@David Bates

I am not sure I understand your question. You are saying you are putting a roof on your primary residence? A roof will not increase the appraisal value of the home. If you want a more in depth discussion click my profile and go to my recent podcast I was featured on. We discuss this.