All Forum Posts by: David Krulac

@Mark Cruse  We've owned condo units in a development where the first build units included heat and hot water in the condo fee, among other charges.  When the second phase was built, the units have the same floor plan, but they added individual heat pumps and individual hor water heaters in each unit, so that they were on the occupant's electric bill.  I thought that we would be able to charge more rent for the units which included heat and hot water.  But over many years of owning units in this development (have owned 7 so far) the tenants and prospective tenants are no willing to pay extra rent for the units with "free" heta and hot water.  I know it defies logic, but many things in life defy logic and the evidence I've experienced follows suit. 

You make the deal, not find the deal. I just bought 5 houses in 5 days in 3 states, 1 of the states I never bought property before. I look at asking price as a suggestion. One of the above houses was a foreclosure, now bank owned and on the MLS. It was apprised in its current condition at $378,000. But it had been for sale on the market since July, 2024. Right of the get go that tells me many other people have looked at it and did not offer the asking price. The house is sitting there vacant and all banks want to do is get rid of the property. Then they lowered the price to $340,000, a step in the right direction, but not as big a step that I liked. All things considered, on the market for months, its now winter time, cold weather, holidays, and dark at 5 pm, not prime selling time, I offered $250,000. They rejected my offer; I was neither surprised, hurt or insulted by the rejection. I waited a few days and raised my offer to $255,000 and they accepted. Therefore I just bought a house with $123,000 worth of equity when I walked in the door. Another of the houses I just bought is appraised at $250,000, they reduced the price to $225,000, and I put in an offer but they accepted a higher offer from another buyer for $197,000. That buyer didn't close and they came back to me and offered $197,000 price. I said that was too high for me and offered $170,000. They said that was too low for them, so I offered $175,000 and they accepted. Same basic structure they asking price is a suggestion, I offer what I think is a workable number for me and we negotiate to the "middle"; though the middle is not halfway, we never "split the difference". My "middle" is close to my bottom price and I picked up another $75,000 of free equity, for a total of $198,000 free equity in 5 days on two properties in 2025. And I bought 3 other properties with a different deal structure, but also profitable.

@Lincoln Waite In none of our rentals are we paying heat or electric within the units. We also have some buildings that are single family conversions not built with seperate utilities. We didn't do every building all at once but over time converted one building then another. The first multi that I ever bought was also 3 units and had 2 electric meters and 2 furnaces. We seperated the electric and each tenant had their own meter which they paid. Then we added one new gas furnace and then each apartment had their own furnace and also paid their own heat, as a result. The first round of tenants we got paid the same rent as before and also paid their own heat and electric. Over the years the rent was increased, and the rent when I sold the building was 4.3X what the rent was when I bought. Inflation is your friend when you're not paying the heat and electric bills. And I always thell the tenants you have your own thermostat and you control how much your heat and electric bills will be. As a side note the "Median" rents for the whole country are on a HUD website and is updated every year to the new rent levels, so you can see how your rents compare to the HUD Median rents. At one 2 unit building there were seperate gas lline, seperately metered but the only appliance was a gas range in each unit. We changed that and added 1 new gas furnace and 2 new gas hot water heaters to the tenant's meters. We reduced their rent by $50 to cover their additonal utility bills. Then in the next rent cycle 1 tenant moved out and the new replacement paid the old rent sans the $50 discount, and in the second year the other tenant's rent was raised $50, so we were back to the original rent. We've added natural gs lines where there were none in the building and got assistance from the gas company who paid for all the excavation and street repair to get the gas line to the building. At other buildings we switched heat source away from oil heat, too expensive. At one single family house there was an oil haot water boiler with domestic hot water. Because of inefficiencie s and the fact that the boiler rans 365 days to supply domestic hot water the tenant's oil bill the first year was $5,900. Of course they complained, and I said that I would replace with a gas hot water boiler and a seperate gas hot water heat, so they would stay. The gs company paid for the excavation, I paid for the equipment and the next year the tenant's gas bill was $1,700. Much more resonable than $5,900 and the tenant stay for severl more years until they bought their own home through me.

@Ryan Brown  I've been a LL for a long time.  In my experience apt. conversions from single family are more prone to noise transmission.  Building built as multifamily tend to have more sound damping, particularily the newer the construction.  You could put wall to wall carpet on the second floor with a thick pad, or you could put a suspended ceiling on the first floor and put in rock wool above the suspended ceiling.  Just lay the rock wool on top of the suspended ceiling.  For walls in common areas like halls and stairs, there are rigid products that can absorb some sound.

or options 3, 4 and 5 don't supply washer and dryers and either the tenant provides their own, rent appliances or goes to community laundramat.

@Andrew Slezak HUD does studies of rent for the whole country and published the MEDIAN rent for every area/county/zipcode in the country. The MEDIAN rent is the middle rent where 50% of the rents are higher and 50% of the rents are lower. This MEDIAN rent is defined by HUD to be FAIR MARKET RENT, FMR. And is the maximum rent the HUD allows fore Section 8 tenants. This figure includes allowances for heat, electric and any other utility that the tenat is required to pay and this is deducted from the FMR. So on a 3br unit where all the utilitites are included in the rent aand paiid by the landlord, you can expect to get up to the FMR as the rent for your unit. HUD does not factor into the rent other amenities that might be included in the rent such as garage, basement, fieplace, central air, pool etc, that might command higher rent in the non-Section 8 market place. Another variable in the amount of rent that a Section 8 tenant can pay is HUD limits their rent payment based on the amount of their income. For many years I was contacted by the housing office to provide input of my rents, both Section 8 and market rented units and participated in their annual surveys. The data posted to the HUD website is update for the Federal fiscal year beginning October 1 of every year.

Just bought 3 houses last week from a builder.  The builder offerred $15,000 credit to be applied, however you wished EXCEPT can not be used for price reduction.  Some buyers might chose a fence, some upgrades, or maybe upgraded appliance package.  We were able to negotiate a buy down on the interest rates.  Two of the houses are financed at 4.25% interest for 10 years then variable for 20 years.  The third house is financed at 4.75% interest fixed for 30 years.  Plus we also able to negotiate a frigerator (not part of standard package) as well as blinds for all windows.  Those rates are not as nice as rates we got a few years ago for less than 3%, but in today's market I'll take those rates.  Also in the same week we bought two other houses, and ended the week with 5 houses in 5 days in 3 states.  Not too bad when the inventory is low, the number of sales is low (like a 30 year low), interest rates are high and prices are high.  Who says there are no deals to be had?  look harder and negotiate harder.  

I just bought 5 properties in 5 days in 3 states.  There is low inventory, lower sales volume, and high interest rates, and as a result many people are sitting on the sidelines, either intentionally or forced.

Compare wear thickness(the top layer) and overall thickness. Obviously the thicker the better.  also look at the tongues, some are very thin and break easily. 

don't know if this is still true, but at one time foreigners could not outright purchase property in Mexico within 100 miles of the coast.  The work around was a Mexican bank was the owner and lease it to the foreigner.