All Forum Posts by: David Krulac

@Diego A. the condos we did were in Pa and DE.

@Diego A.  I have been managing and owning rentals for a long time, i used to manage 100%, now 50%.  On the 17 units, I would have liked to keep, but with all other obligations, could not at that time.  The legal cost to condo was in the range of $5,000 to $10,000, versus the subdivision costs which would have been maybe $50,000.   

after units were sold the owners formed a condo association, establish rules, if they want, pay bills like trash, maintenance of common areas.  In this plan each owner is responsible for all of their building Maintenace.  The units sold on the open market for about the same price as if they were Fee simple with separate land deed ownership.

We saved lots of money and time, by condo-ing a 17 townhouse complex as well as condo-ing and existing building built around 1900. The condo-ing did require condo docs compliant with state laws, containing all the cluses required by law. In both of those situation the land remained whole as one tract essentially owned by the condo association (HOA) while the individual units were sold to individual owners. At the 17 TH there was one owner that bought 2 as investments, but all the others were individual owners, mostly owner occupied and just a few landlords owned. Besides being easier, on the 17 units there was a driveway and 36 parking lot owned by the HOA, that if there was a land subdivision would require other things. For example the driveway would be a "public municipal" road and have to be built to "road standards" such as 8' base and 8" pavement. A private driveway doesn't have to meet those standards, but also doesn't get public snow removal or public repair. Those responsibilities become HOA responsibilities. Also trash removal needs to be privately secured, as public carrier will only pick up along public roads. Another responsibility for the HOA. But the developmental costs were many thousands less and the time to get approval less. These two were done in two different states under two different state development rules, both much easier. We have done many other subdivisions involving up to 100 acres, but there were the easiest. In the second state, the municipality by law had no authority to change anything and the one meeting with them was advisory only. After that one meeting the engineered plan was recorded at the courthouse and we could sell individual units. All of those units went to owner occupants. Covod-ization versus land subdivision, its no contest imho.

David Krulac, Bigger Pockets Podcast #82 Guest 

@Joe Spinelli  Contact me off line, was in Frederick on Monday, I am a real estate speaker and author, and did Bigger Pockets Podcast #82, and I've owned group homes and posted on BP 3 thousand times. 

We have successfully bid on many HUD properties usually bidding less that their asking price. Their asking prices is based on current appraisal of the property in its AS-IS condition. Most of the time I personally disagree with the asking price. However, there was a HUD property with an asking price of $60,000, which I thought was under-valued. I bid $65,000 and got the property. It had sold 5 years earlier for $78,000. I owned the property for 14 years renting it out and sold it for $129,900, so I about doubled my initial purchase price and collected rent for 14 years. Win-Win

I've been an advocate for investing in growth areas.  Recently I was in North Carolina where state wide growth has been 9% and there are 6 areas where growth is over 20%.  Of the 100 counties about half have had recent growth and the other half have had no growth or negative growth.  Its easier to have investment success in areas with growth, as a rising economy raises all values.  On the other hand, you can make money in any area, even areas with no growth as there are still people that live there, even if the population is declining.  There is still demand for rentals and sales, though the demand is usually less and the prices are usually lower, and values could be stable or less.

A developer, flipper, or wholesaler are considered to be "dealers" meaning they are like a store with product on the shelve, that they sell.  Dealers cannot do 1031 exchanges, cannot do installment sales, and cannot take depreciation, all of which are reserved exclusively for "investors" who are not considered "dealers".  

If you have gas heat, gas hot water heater, gas range, gas dryer, 100 amps is usually enough. Electric range when fully operational all burners and oven are running at same time could draw 50 amps, and an electric dryer up to 30 amps. We've upgraded many places especially when electric heat, heat pumps, central air conditioning is added into the equation. We would always do 200 amps, and never 150 amps, the price is small difference, and 200 allows for future growth.

We have done professional epoxy with good success, two caveats, can't leave mat down when not showering and don't use harsh cleaners like Ajax, Babbo, & Comet.  Use Soft Scrub only