All Forum Posts by: Fredrick Hock

Hello,

I recently put in an offer for a condo that I plan to rent out to tenants (I will not live there), and would like to know if I need to purchase condo HO6 insurance since the HOA provides an "all-in" master policy?

1. HO6 INSURANCE: if the HOA offers "all-in" insurance, then I would only need to insure my personal belongings. And since I will not be living in the condo, then I won't have any personal belongings to insure. So does this mean I do not have to purchase condo HO6 insurance? IOW, can the tenants just get renter's insurance to cover their personal belongings?
   
2. INJURY: What about if a tenant or tenant's guest is injured inside the condo? Whose insurance covers that situation (i.e. the HOA's "all-in" insurance, the renter's insurance , or would I need to get insured for that)?
   
3. FLOOD INSURANCE: I spoke with the HOA office, and they said that the building was recently included in a flood zone. The HOA currently does not have flood insurance since they are still figuring out how to deal with this recently added cost - so it seems like I might have to buy flood insurance for my individual condo (i.e. if my mortgage lender requires it). That said, my condo is on the 2nd floor of the building - do I still need to get flood insurance for my individual unit (what's the point, if the rest of the building is not insured for this)?

What do you think?

When you buy a property that needs some work, how do you protect yourself from going over your rehab budget (or from the contractor exceeding his estimated cost)?  Do you include specific language in the repair contract?  For example, "buyer will not be liable for any costs that exceed this estimate or for additional time needed to complete repairs".

I am buying a property and did a walk-through with a general contractor who gave me his repair estimate. Before signing his contract, I want to make sure that he will stay within his repair estimate, and not exceed the approximate cost or take longer than he projected (I already told him to give me a high estimate to be safe, so there is a lower chance of going over budget). I do not want to end up paying more than what he said it would cost in his estimate.

Also, I remember a webinar where Brandon talked about not wanting to be held responsible if the contractor's team takes longer than expected to complete the job (e.g. because they did not show up to work on some days for whatever reason - like they were out partying the previous night, forgot to show up, etc).  In other words, the investor should not have to pay extra if the contractor cannot manage his own team properly.

With that in mind - what language/terminology can I include in the repair contract to protect myself from the contractor going over budget?  Or do you propose any other solutions?

Can anyone recommend a great Property Manager in the New Haven, Connecticut area?  I am buying my first property & would like to hire a PM (as I am out-of-state).

Also, if you have any tips on questions to ask a PM during the interview - please feel free to share.  I've done a lot of research on how to qualify PMs, however any advice is welcome.

If I am taking out a loan for repairs, how does the BP calculator include this in my "monthly cash flow" and "cash-on-cash ROI"?

Does the calculator know I am taking a loan for repairs (in which case, I will enter the repair estimate in the "Estimated Repair Cost" field)?

Or does the calculator think I am paying for repairs with cash out-of-pocket (in which case, I will add the repair amount into the purchase price, and adjust the down payment accordingly)?

Hello,

QUICK QUESTION: What type of contractor do you generally hire when you first inspect a property that needs TLC? Do you hire a contractor who can give you a rehab/repairs estimate, or do you hire an inspector who can review the structural integrity of the house (i.e. check on the plumbing, water, heating, gas, electrical, foundation, drainage, roof, termite, radon, etc)?

I ask because I am about to make my first offer on a house that definitely needs some TLC. I would like to walk through the property with a contractor in order to (1) get an estimate on rehab/repairs; and (2) inspect the structural, mechanical, electric, plumbing, etc aspects of the house in order to ensure everything is working properly.

After speaking with multiple contractors, it seems like many of them can only do one type of inspection (rehab or structural), but not both. Therefore, I would need 2 separate contractors to accomplish each task.

With that in mind, which contractor should I hire first? Or should I get both to accompany me on my first walk-through of the property (at the same time)?  

I'm also asking for budgeting purposes, because it's not exactly cheap to hire these contractors.

Hello @Tiago Alencar,

Thank you for your insight.

Hmmm... perhaps there is an issue with the calculator?

Maybe I am mistaken, but shouldn't cash-on-cash ROI be calculated based on the 'down payment' (i.e. since that is the only money coming out of my pocket)? The repairs & the remaining 80% of the purchase price will be covered by a loan (which, in turn will be covered by the rental income). Please correct me if I am mistaken.

In any case, I made the changes you recommended - here is THE NEW REPORT

More specifically, the changes I made to the report were...

1. PURCHASE PRICE: combined the purchase price ($68K) plus repair costs ($80K)
2. ESTIMATED REPAIR COST: removed this number, since I already combined it in the purchase price

View report

*This link comes directly from our calculators, based on information input by the member who posted.

Hello, I am thinking of making my first offer on this place.  Do you think it is a good investment?