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All Forum Posts by: Harman N.

Harman N. has started 40 posts and replied 124 times.

Post: 25 year old furnaces, water heaters: replace upfront or let fail?

Harman N.Posted
  • Rental Property Investor
  • San Francisco, CA
  • Posts 126
  • Votes 74

Wow, thanks for all the responses everyone! It looks like the consensus is that the water heaters should be replaced upfront (I didn't realize they can cause such a huge mess when they fail), and the furnaces are more optional. 

The other consideration on this deal is that I bought it off-market, and it was a good bit below market value. Replacing the water heaters and furnace gives the appraiser something to help justify to the bank an appraised value that's higher than the purchase price. 

Post: Chronic bugs: Whose fault - tenant, neighbor, unit, exterminator?

Harman N.Posted
  • Rental Property Investor
  • San Francisco, CA
  • Posts 126
  • Votes 74
Originally posted by @Joyce Tavares:

Question:  Have you given the tenant "who lives in filth" a notice to either clean it up or move?  It sounds like your pest issues are not going to stop until that tenant is no longer there.  THEN get the pest control people in to spray that unit....did the pest control people spray that particular unit as well?  

No, the pest control people have only treated the complaining unit but not the other one. The "lives in filth" tenants lease is up (and was quite a bit below market too), so I think it might be time to turn that unit.  

Post: Chronic bugs: Whose fault - tenant, neighbor, unit, exterminator?

Harman N.Posted
  • Rental Property Investor
  • San Francisco, CA
  • Posts 126
  • Votes 74
Originally posted by @Joe M.:

Hi Harman

Does it say anything in the lease?  Mine says if insects are inside the first 30 days, its on the landlord, after that on the renter.

Outside of who pays for it...sounds gross...fix it up.  It will be better for everyone

Thanks for the suggestion Joe, that didn't even occur to me. The lease does say tenants are responsible after 30 days. I'll talk to the property manager about it!

Post: Chronic bugs: Whose fault - tenant, neighbor, unit, exterminator?

Harman N.Posted
  • Rental Property Investor
  • San Francisco, CA
  • Posts 126
  • Votes 74

Hi all,

I have a duplex with recurring pest (roaches, mice) issues. When I bought the building both units were rented, but one of the tenants complained of mice and bugs and asked to be released from the lease, which I allowed. 

Since then the new tenant in that unit has complained several times about pests, and the property manager has ordered 3 treatments in 5 months. Incidentally, the tenant who's been in the other unit the whole time has never complained of bugs, but this tenant does live in filth. 

So my question is, whose fault is it? Is it that:

  • a) Both of the tenants in the one unit with complaints have each fostered bugs in their place
  • b) The holdover tenant in the other unit (who hasn't complained, but lives in filth) is impacting the whole building
  • c) It's something specific in the unit, maybe requiring a deep, deep clean
  • d) The exterminator company's treatments are ineffective

I'm leaning towards (b) but would love to hear the community's thoughts.

- Harman

Post: 25 year old furnaces, water heaters: replace upfront or let fail?

Harman N.Posted
  • Rental Property Investor
  • San Francisco, CA
  • Posts 126
  • Votes 74

Hi all,

I bought a 4-plex a couple of weeks ago. Three of the four furnaces are 25+ years old, and three of the four water heaters are super old as well (18, 24, and 25 years). It's in a rough but rapidly gentrifying neighborhood. I bought the building with cash, and will refinance as soon as the two vacant units are leased. My plan is to sit on the building for a few years while the area around it improves, and then renovate and pull money out. 

My question is: should I replace the old appliances now, or just replace them as they fail (or if they make it for a few more years until I do a full renovation)? 

Benefits of replacing upfront would be:

  • No hectic service calls for me, the property manager, and the tenants when they randomly fail in the middle of the winter
  • I can capitalize the expenses if I replace upfront vs treating them as repairs down the line 
  • It'll increase the appraised value, so I can basically pay for the cost with a mortgage

The only argument I can think of for waiting is "don't fix it if it ain't broke" -- might as well just save the money, and who knows they might last a few more years. 

Thoughts?

- Harman

Post: Insurance Broker You Like?

Harman N.Posted
  • Rental Property Investor
  • San Francisco, CA
  • Posts 126
  • Votes 74

Good question, I'm following along! I've been using State Farm for now, but at some stage would like to move my portfolio over to a more flexible / investment friendly firm. 

Post: Double closing costs when buying with cash & refinancing later

Harman N.Posted
  • Rental Property Investor
  • San Francisco, CA
  • Posts 126
  • Votes 74

Hi all,

When you buy a property with cash, and refinance it down the line, is there any way to save on the double closing costs: first having to pay closing costs on the initial purchase transaction, and then again during the financing? 

I assume it's probably not avoidable, but figured it wouldn't hurt to ask. Maybe there's a clever way by using the same title company and executing both transactions within some set amount of time. 

- Harman

Post: Insurance for Full Rehabs / Flips

Harman N.Posted
  • Rental Property Investor
  • San Francisco, CA
  • Posts 126
  • Votes 74

Hi all,

What kind of insurance policy do you get while you're doing a complete rehab on an unoccupied property? I just bought a duplex in Ohio that is vacant (uninhabitable) which I'm going to be rehabbing, and State Farm said they are not able to insure it until the rehab is almost complete. They passed me onto something called the Ohio Fair Plan, an insurance of last resort. 

Wondering what other rehabbers / flippers do? 

- Harman 

Post: April Rent - Data & Projections for Columbus Ohio

Harman N.Posted
  • Rental Property Investor
  • San Francisco, CA
  • Posts 126
  • Votes 74

Rental delinquency and mortgage delinquency rates will be interesting to watch next month..

Post: Expected Cash-on-Cash Return in Columbus

Harman N.Posted
  • Rental Property Investor
  • San Francisco, CA
  • Posts 126
  • Votes 74

CoC return depends on your financing. It's definitely feasible though