All Forum Posts by: Imran Raz

Been there done that.  I had an 8k bill for this repair which were roots under the house into the sewer line.  It had to be replaced from under the house to the street connection.  

Sewer lining will work but overtime, the same issue may popup in another location.

I periodically treat the sewer line with copper sulfate, which will kill the roots.  It is used in septic systems to help treat root issues in the septic fields.

If there are large, old growth tress near where the sewer line issue is, see about taking those trees down. Once the tree is gone, the sewer line issues should clear up and will be limited to non-root issues.

The pipe lining is probably the best solution without excavating. 

There is stuff you can put down the line to kill the roots, but they'll likely grow back.

We had a similar issue and I am not saying this would work but it's possible to hydro jet the sewer line to thoroughly clean it out. Then you can reline the pipe to address the areas being infiltrated by the roots.

Just the hydro jet could buy you some time

The pipe relining is not cheap but no need to dig up the floor.

It's also not perfect but you can remove any nearby trees. Roots travel quite far so that gets tricky

Just some things to think about

Imran, I think the final nail in the coffin, if I'm reading this correctly, is that there's an additional $208/mo in trash collection. That would slash your $403 monthly cashflow in HALF and also greatly impact all other numbers including CAP rate! This in conjunction with the 10% EM and the no financing contingency is the straw the broke the camel's back and I'd move on. "Strict seller"?! I think that's code for "not motivated" and that alone would've made me bail. Being that it's your very first deal, I would absolutely walk. I know it's hard to find decent deals, but trust me it's never an excuse to get yourself in a bad situation. And in this particular case, run, don't walk. Good luck!

Imran Raz from Miami, Florida; you asked: “Am I missing anything in this analysis?” I say YES! The estimated costs of repairing hidden undeclared issues with the property!

First, allow me to complement Real Estate Investor from Miami, Florida for his many '2-cents' he has given you and all that do read these posts! He has given you and all readers better advise than most 'people' will give specially for FREE! If you and everyone else remember anything Thomas has posted it is this: “.... Real Estate Investing is a business and should be treated as such were decisions are void of emotions.” CYA!

I for one also add a positive thought at first-glace of the number you have provided, but … as we say in Spanish, numbers can be made-up and paper, paper will hold anything (crap) that is written on it!

Contingency Clauses ARE a must for all real estate purchases! If a seller is against any Contingency Clauses, I would walk-away … you have to CYA and pockets!

A must have Contingency Clauses: “The SELLER declares, No BUILDING CODE violations, that there no hidden repair issues with the property” and or “your approval IS NEEDED of the property inspection report”! There are MANY hidden problems that are not seen by the average person and many do not come to light till after you take possession! CYA!    Keep looking!      Keep asking questions! 

Imran, an idea for you … you stated that you are a new investor, perhaps you should consider teaming (partnering) with other in our area (Southeast Florida) for a few initial investments then when you fell you can do-it alone, do so!  Let us know!

@Imran Raz Utilities appears to be too high. How many meters? I will personally walk away from the deal because I'm in it for the CF. Your deal is a low PCF. Your money could work stronger in some other deal. What are your exit strategies for this deal? Be careful playing the appreciation game.

Is this property in Miami?  If so, given the rent amounts and purchase price, I'm going to assume its a somewhat rougher area.  For a quad in a low income area, you definitely need to bump up your repairs budget.

Also, the management fee is a percentage of the total rental income, not the net after accounting for vacancies.

Other then that, I think a key factor that hasnt been brought up is the $230 a month in Utilities.  If that includes electrical, its too low.  If its only water, its too high.  Either way, you need to research whether or not you can pass that expense on to the tenants.  If you can separate the meters and have the tenants paying their own utilities, removing that expense from your books makes this property much more attractive (and valuable).