All Forum Posts by: Jack Murray

Property is in Del Paso Heights, north Sacramento.   I bought this house for $75k.  

 I do everything myself and buy used whenever possible to match the standards of this neighborhood. 

I think I can build the second unit for $50-60k, but what it will appraise at is the big issue, as there are no comparables in my area that I or my realtor could find.

My last house the FHA appraisal came in $10k less than the offered price, so even if the rent income justifies fully a $300k or $350k mortgage, if the FHA appraisal doesn't agree, I am screwed, this time for a much bigger amount.

Certainly the difference between $250k, $300k, or $350k is huge, one has no profit, the other $100k profit!

I go back and forth, some days just want to sell and get out of this ghetto, other days I think I'm leaving money on the table,

thus my post to the forum.  

Anyone build a second unit on their flip?

Rent here for 2bdrm house is well over $1000, so it more than covers extra cost, heckif one rents 3bd they could live free. I found that HUD allows rent of second unit to add to qualify income, so i still get hud buyers, not just investors.

Guy 2 lot next door is building new house and he says i should get $350k for property with second unit.  If i could get another flip cheap i would do that, but just not to be found now. 

 I am concerned about having to borrow to build it, as market might soften in six months

 But right now everything sells in matter of days..

I am about done rehabbing a house I bought a while back.  The market here is pretty hot right now.

I started looking at doing another flip after I sell this one, and there are no lots for sale or many fixers either,

so what I have been thinking about is building a second unit in the backyard of this house.  It has a huge backyard,

and I can build another 900 sq ft 2 bedroom unit which I think will add $100k to the value of the property for a total of $300k.

But there are no comparables, and my realtor could only give me duplexes which were only about $250k.

My question is should I build this second unit rather than look for another "very hard to find now" flip?

If I go ahead and do it, I will need to borrow hard money to build it as my cash it all tied up in the existing rehab.

Bought a 2 bedroom 1 bath house that I'm fixing up, and planning to rent.   I'm building an addition to add a third bedroom and bath (master bedroom with onsuite) and a laundry room. 

The house was built in 1950, and much of it is still original.   The kitchen was original.  The bathtub is original.   My question is primarily about replacing the cast iron plumbing.   The bathtub drain was clogged, I snaked it out a couple times and got it draining again.  The house has a crawlspace.

I had to cut open the floor to get into the crawlspace, as the vent openings were not big enough to fit though only 12 inches.  Plumbers must have been midgets in the 1950's?   It does appear the plumbing has been untouched since it was built?

The issue is the drain lines from the tub and show and bath sink connect into a lateral

that tee's into the toilet drain that goes into the sewer downpipe.  It looks like this lateral run has settled over the 50 years and is now LOWER than the tee, and I think this is where the tub drain was clogged.   I'm thinking this is just going to clog up again as the drain isn't 'draining', but has a low spot.   So I'm thinking I need to just replace ALL of this cast iron pipe while I'm rehabing before renting it, and having to fix a bigger problem in the future.

Or should I just leave it be and fix any issue when it happens?   I will need to tie into the stack for the addition's plumbing, so I'll need to get in there already, but don't need to replace all of it.

 Could you explain how being a Wholesaler works?  Can you give an example of a property that you have available?  Where do you get houses at wholesale?

So does this deal make sense..burned up house sells for $110k.  Comps are $180-200k

Fire damaged entire house via water damage, all floors toast.  Kitchen destroyed, roof sections burned up. electrical main burned up, garage burned up.  All ceiling and drywall must be stripped.

 Must be $50-70k  to repair.    How can this make sense?

How can you tell if the market is too hot?   My view is when a trashed property in a bad spot that didn't sell for 2 years suddenty has multiple offers indicates the market is too hot.

I haven't looked at higher end properties as its outside my financial resources, but that might be the right place to be at this time, people finally moving up now after not doing it for many years.

I see hand written signs on telephone poles and chain link fences all over, saying "we pay cash for your ugly house"  does that really work?  Are there people that are so foolish to give away their houses??

It seems to me a great time to sell, and a lousy time to buy when trashed houses sell for just about as much as livable houses.  This wasn't true 3-4 years ago, and SF was still close to Sacramento back then! :)

Seems to me the current flippers are driving up prices from recent profits and assume the same doubling of prices is going to happen again.   

BTW, isn't selling property 'off market' an oxymoron?  ;)