All Forum Posts by: Gail W.

I agree with all of these posts, you need to write a scope of work and don't worry about missing anything because you will. The contractor will let you know if there is something that needs to be done. As a matter of fact they will insist that something MUST be done. That is when you need a property manager or agent involved to put eyes on it and give you the information you need to make informed decisions.

I have done a couple of rehabs close to home, and I can't imagine how hard it will be to do this from out of state. 

Thank you @Jay Hinrichs and @Ben Zimmerman. Your comments have caused me to reconsider my strategy. There are cities and towns relatively close to the very rural area I live in that have a decent rate of appreciation, although not what you would see on the coasts. That will be my focus from here on out.

     The appreciation math makes perfect sense to me. The bad thing is I am in an area of the state where appreciation is minimal, and I firmly believe in investing close to where you live. Not only that I am in a state that is losing population every day. So I wonder why so many people from the coastal cities are looking to invest in the center of the country where the rate of appreciation is so low?

    I wonder if I should not rethink my position about investing close to home and go to the coastal cities to invest and sell my property here in the midwest to another OOS investor? 

I am just finishing a rehab in a house with plaster. In a couple of places around the old chimney the plaster had fallen because the roof was leaking around the ceiling. Moisture is the enemy of plaster. The rest of the house I had a drywaller patch, but that takes more time than you would think, and the finished product was not as slick. Even so I think in my case it was much better than getting a dumpster, doing the demolition, hanging the sheet rock then having a drywaller finishing, because I didn't need to do much as far as upgrading wiring or insulation. 

 Here's my story: 

35 years ago I bought a house and rented it out, it was my first venture into buy and hold REI. My tenant lived in the house for 14 months and I got a total of 4 1/2 months rent. He trashed the house so badly I sold it to the church across the street at 75% of what I paid for it and they tore it down. I was lucky to get that much for it. This experience left a bad taste in my mouth and I gave up the idea of residential investing for 33 years. February 2019 at the age of 62 I accidently came across a screaming deal. I bought a mobile home on 4 lots, sold two of the lots and rehabbed the mobile home. This property appraised for almost double the amount I have invested. I have had a good tenant in the property now for the past 19 months. I liked how that worked so I bought a couple of lots with a mobile home hook up and pad already in place thinking I would buy another trailer and set it there but I ended up renting it to a lady who parked her own home there. By now I had the bug so I began looking and I found a house off market in July of 2019. I bought the house rehabbed it, (for way more than I thought it would take) and placed a tenant who has been in the house for 9 months and has given me no problems. I bought my next property, a foreclosure, in July of 2020 and I am just now finishing the rehab. I have a total of $10200 of my own money in all 4 places, plus 6 months of mortgage plus taxes and insurance in cash reserves. All 3 places cash flow, I believe the 4th will also. I am now 63.

     The moral of the story is in order to do this you need to remain conservative. Cash reserves for a cushion is imperative. Look for deals off market and walk if they don't cash flow nicely. Never fall in love with a property, it's just a means to an end.

@Jim K.

I knew you weren't nuts.

What was explained to you is a single "hot" wire coming into the house, there also needs to be a neutral. I am a retired electrician and I have never seen a house service that was 120 volts, but I have seen outbuildings wired this way. The good news is there is going to be 240 volts (a 2 hot wire entrance) at the meter. If that is the case you will need a new service from the meter into the house. Just a new service in my area would be from $700-$1000. It depends on whether the service provider in your area supplies the meter and meter socket or not, and will vary quite a bit regionally. After that initial cost no one could really say what it would cost to replace the knob and tube. There are just to many variables, but Mr Teachout's estimate would probably get you in the ballpark as long as there are not too many extra obstacles.

@Eric Bilderback

At 100%. I did have one in August that didn't pay. Wasn't covid related. After I told her I had been approached by someone interested in buying the property I promptly received 2 months rent, August and September.

I closed in July on a foreclosure. I am all in at a little less than 60% of ARV. I will jump on if I find another one like it. That being said I also am carrying 6 months of reserves on all my properties and working toward 12. I feel like keeping reserves high in this time we are living in, is the most important thing to consider.

I bought a REO from a large nationally known bank in July and the proof of funds was as has already been stated, just a copy of my bank statement.