All Forum Posts by: Geren Knight III

I found a house that I can buy for 40% of the ARV. The ARV is over $200k. The house is in a great location (in regards to the neighborhood, low crime rate, and home values) with many of the houses in the area valued above $300k. There are some downsides to the neighborhood. The neighborhood is an old neighborhood with most of the homes built around the turn of the 20th century, late 1800s and early 1990s. The neighborhood is old and had already been established when the highway was built near it. The highway can be seen from the house. Furthermore, the backyard of this house slopes down into a ravine; however, that can be fixed with fill dirt, retaining walls and the proper drainage systems. The property has been for sale for over a year now and the owner has been unable to sell it. The house does need work on the inside, but nothing that should prevent it from selling. Through a little research I found out that the house used to be infested with bats. My agent has indicated that that is a reason the house will not sell.
If I were to purchase this house and rehab it, how can I overcome the bad sigma when I go to sell it?  

Thank you everyone!  I will experiment with what’s underneath it first.  The worst case would be to paint it.  

@Kenneth Garrett and @John Underwood thank you for the feedback. I plan to BRRRR the property. I will see what it will take to skim coat it and also check under it. I may get lucky.

I am in the process of purchasing a duplex rental that is currently covered with paneling in every room.  Is it more advisable to remove the paneling, paint it or skim coat it with drywall compound?  The paneling has already been painted at least once and is in good condition.

@Brittany R. thank you for responding!  I want the tenants to be responsible for the utilities, not me.  I will check the state landlord laws on how to charge for water.

@Account Closed thank you! I will look into the splitting for the water and check with the electric and gas companies on submetering.  I Was thinking that was going to me my approach; however, I wasn’t sure what was typically done.

I am looking at my first duplex that was converted into a SFH. I plan to convert it back to a duplex; however, all of the utilities are set up for a SFH now. Should I have the utility companies add another line or should I pay the utilities for the tenants? Also, if I pay the utilities, do I add that charge to the rent? How is this typically handled?

Thanks everyone!  Rent for the area for this type of house, two bedroom single family, is $650 a month.  The rent goes up significantly for a three bedroom house, $850 a month.  However, the layout of this house does not allow for an extra bedroom. I have considered the flip option.  I ran the different scenarios through the BP calculators.  I choose a rental option only because of the market value ceiling in this area for a two bedroom house.

BP community, I am in the process of purchasing my first rental property. I have negotiated a fair price with the seller. The property ARV is $87,000. The house requires some maintenance before it is ready to be rented. I negotiated a $40,000 purchase price. during the inspection and due diligence process I uncovered that the furnace/boiler was past its life expectancy and has never had any maintenance done on it. It was running in the red. I spoke with my contractor about the boiler and he indicated that it would be around $6800 to replace. There were other maintenance issues such as the hot water tank needing replaced and rot on the front porch that needed to be fixed. I have asked for a reduction in price down to $30,000 to cover the three items, boiler, hot water tank, and the front porch. The seller has been great to work with and has fixed other items on the inspection report but it's not willing to fix the rot or the boiler. My concern is that the positive cash flow is less than $100 a month with capital expenditures and monthly maintenance only at 5% each. These numbers are also based on only putting $5000 in it for paint and some flooring. The house is in a good section of town with an immediate increase in equity of at least $40,000. Should I push for $30,000, walk away, or accept the sellers offer of $38,000?

@Landell Hernandez good morning!!  Do you have any recommendations on a contractor in Cumberland, MD?  Thank you!