All Forum Posts by: Account Closed

That's a good price for over here on this side of the country. $475-500 for a 30-yard dumpster for a week is not uncommon.

@Andrew Sampino

You illiterate buffoon! How dare you offend our eyes so?

Andrew, in another life I was an English teacher. I knew a whole lot of other English teachers who took enormous pride in their spelling skills. We're talking pride like a Fourth of July parade. And I never met a single one of them who knew how to make and keep a buck as well as they knew how to spell.

@Andrew Sampino

The capitalization rate for this property, according to the given, incredibly optimistic numbers comes out to 1.43%.

I would not think about it seriously.

@Ron S.

OK, there's no such thing as a shadow REO inventory in this country. I've heard that industry line before multiple times in the last few years. I think we're going to have to agree to disagree on that.

https://www.aol.com/2012/07/13/shadow-reo-as-much-...

I also used to have a friend in tech who worked on a major financial institution's mortgage portfolio a few years ago. He worked on sampling and mathematical modeling to decide which REOs would be put on the market. He was trying to find properties that would have a higher potential to sell near their last selling price and which would not and should therefore be kept in the shadow inventory. One of the things he was working on was smaller multifamilies under 10 units -- trying to find the factors that would keep those properties rental potential and therefore resale value up versus those that had crashed. Redlining was openly involved. This was all contracted out, deep dark discretionary project executive spending.

I know that as of 2010, this kind of thing was still in its infancy. I don't know where it's at now. I sincerely doubt any major member of this major financial institution had a sudden change of heart and decided this was wrong and unethical to do. I do not have the faith of a priest in Christ in the moral compasses of the top private finance professionals of the USA.

“If you ain’t cheating, you ain’t trying."

@MacKenzie Clinton

Great news from the fire chief, congrats. Still, get that report.

I'm going to try to avoid spouting a lot of technical terms in this response. What's important to understand is that there are two basic approaches to finishing basements. The first, cheaper, and far more common approach is to attempt to seal the masonry walls to create an isolated space, and then use conventional above-grade building materials to finish the space. The second, more expensive, and far less common approach is to build a defense in depth against moisture infiltration and mold growth that accepts that below-grade space can never be above-grade space, however you try to turn it into something it isn't. This means, among other things, using mostly unconventional building materials to finish the basement, materials that are not as susceptible to mold growth as conventional materials. This kind of high-quality basement refinishing is most common in New England. It is, sadly, not so common in western PA, where I live and operate, and certainly not Kansas. This is not to knock on Kansas in any way -- it's just the way things are.

Based on a number of things you've written, it's pretty clear that your contractor went with the first approach, and that the basement finishing job is more susceptible to mold growth than it might otherwise be. Be aware the "low-airflow furniture situation" line is going to fall apart in court, if things ever get to that point with this tenant or with others. I could explain exactly why but it would take a lot of extremely boring information about basement finishing techniques. If you send me a message to connect, I'll do it in a PM. Ultimately, in a well-finished basement, the tenant should be able to stack three damp mattresses against that wall and not see mold grow on it after just five months of living there.

This tenant is obviously not going to hurt you badly. The oven-cleaning fiasco she has now been reliably shown to have pulled -- you would never have had that kind of conversation with the fire chief otherwise -- exposes her silly, drama queen behavior clearly. But someday, you may get an organized, careful, bright tenant down there with access to someone who knows a bit about basement refinishing.

You are likely going to keep having pesky mold problems down there. Once you get rid of this tenant, you should tear the place down to the studs and replace all drywall with purple board. Replace all wood trim with PVC trim. Both HD and Lowes stock Gold Bond Purple XP. It works well, and should hold back the mold problems for quite a few years. If you don't already have one, get a large dehumidifier down there. Get an air freshener system. Neither the dehumidifier nor the freshener will halt the march of the mold, but they will effectively mask the musty smell of what will be growing behind the mold-resistant drywall.

That's all going to be very expensive. So if that's not possible, at a bare minimum, repaint the whole place ASAP with paint that contains a mildewcide additive.

Good luck, MacKenzie. I wish I had more comforting advice to offer.

@MacKenzie Clinton

There is an enormous amount of panic and fear about mold and mold remediation in real estate these days.

Here's a Wikipedia article to ease your worries about evil black toxic mold: https://en.wikipedia.org/wiki/Stachybotrys

It's perfectly possible there's mold behind the bed for some crazy reason that's the tenant's fault, although highly unlikely in just 5 months of occupation. Here's what I think is the most likely scenario.

There's a chance that on the other side of the wall there's a bathroom, particularly a tub/shower combo, and water's leaking from there and causing the mold. That would be a real problem and require some serious remediation. Post again with pictures if that's what's up.

Here are two others

It may be a small or spraying leak in water supply piping. It happens.

You may find a plumbing vent pipe in that wall that leads to the roof. The vent might not be properly collared. I've seen vent pipes leak in rainstorms.

If, however, you don't find plumbing pipes in that wall or there's no tub on the other side, just replace the regular drywall with slightly more expensive purpleboard, prime with PVA primer and fortify the paint you use over that with a mildewcide additive. If mold forms again on that wall in that area, something seriously weird is happening. That's when you break out the addendums and whatnot and start lecturing about furniture placement. That will probably never happen, though, because you have a fire situation on your hands now.

"The appalling dirtiness of the oven and stove..." Welcome to landlording! But again, in five months they've turned the clean range into a fire trap?  That's a lot of ugly, sloppy cooking. I suppose it IS possible, but highly unlikely. In any case, if that's what happened, when you open the oven you should see quite a bit of black carbon sitting on the bottom. Get pictures of it if you see it.

Here's what I recommend for tomorrow: you are going into a conflict-laden solution. You've obviously made up your mind that this tenant is crazy. The tenant might honestly feel that you put shoddy/cheap/dangerous equipment into your rental. DO NOT GET OFFENDED. Take lots and lots of pictures, listen to everyone's stories, say nothing, DO NOT DISCUSS HYPOTHETICALS (Well, if it'sour fault, we'll..."), walk away and plan your next move. Definitely get that FD report.

The tenant is probably going to want some certainty out of this mess tomorrow more than you are. Do not give it. You need to investigate this. The tenant might scream bloody murder about the place being uninhabitable. She will quite probably tell you that she was only doing what your property manager told her to do, so none of this is her fault and YOU ARE RESPONSIBLE FOR ALL OF IT. That's her narrative so far.

You are not going to pay for lodging elsewhere, or promise to make restitution if it turns out that the oven burnt up because of your negligence (that's one of the hypotheticals you won't discuss). Your tenant can go stay with a friend or with a relative for a few days if she feels she has to. She doesn't have any friends or relatives? There's nothing you can do "right now."

And walk away. Don't promise to call.

@Jessey Kwong If I ever give you some good advice and you make money off it and you're ever in Pittsburgh...yeah, I expect lunch. Good lunch, too, not a chain.

@Brian Gallagher

ALWAYS buy near police stations in rougher neighborhoods if you can. Very good. That information seals the deal. Police stations tend to be anchors for what I call "pocket neighborhoods," little localized areas within neighborhoods that are significantly nicer than average. Knowing where those pocket neighborhoods are another advantage the local fixer has over other types of investors.

If I were you, I would do exactly what you're saying, but I'd refinish the flooring if I could save it. I know that luxury vinyl plank is very popular these days, but 3/4 in. hardwood sanded clean with three coats of oil-based poly on it will take a monstrous beating in a rental and still come out strong. The best advice I can give you as a fixer and self-maintainer is to always save solid hardwoods if you can for practical purposes.

I like the idea of your tile floors as long as you're the one laying them and you do really solid work. There are way too many crappy installers in Pittsburgh for me to feel comfortable ever contracting out that job with what I can afford to pay for it.

As far as the rest of it goes...that's all my wife's job. I have been wrong so many times and she's been right that I've just completely given up on matters of taste. It's always smarter to go with what she recommends.  But since you're self-funding the repairs -- you mighty want to think about holding off on the granite for now. Do a mid-price option like Corian. If the neighborhood does explode in value and trendiness, then your next upgrade is going to be exotic granite that looks great in photos, because one exit strategy is to sell it to an investor that lives fifteen states over as a safe-bet turnkey and plow the money back into the next up-and-coming Cleveland neighborhood. Once you have granite down, it's not easy changing it out again. Corian now is less expensive and will keep you flexible.

Does this duplex have a full basement with separate laundry facilities?

I would always go for Property 2, at least until I planned not to handle most of the repairs and maintenance myself. You're a local landlord and fixer. You have to leverage your strengths for as long as you can. Let the passive investment crowd fight each other for the properties in the B-class area. Your money's in the hood.

What I mean is that yYour max cash flow properties are ALWAYS going to be in C-class neighborhoods. That's really hard for a lot of people getting into this business with no skills to really wrap their heads around. Ugly fixer-uppers in not-so-nice neighborhoods are absolutely where a handyman investor/investor-contractor wants to be if he's doing most of the work himself. Half-renovated houses where the former owner blew the renovation and left the place unsuitable for the retail market are gifts from benevolent providence to a good handyman or home improvement contractor. Drive that purchase price down mercilessly. Who else is gonna buy it? That ambitious mid-level corporate exec and his teacher wife looking for real estate investment opportunities served up on silver platters who have to pay contractors to fix everything that's wrong with them, while they fuss over choosing paint colors with names like Seagreen Mist and Wistful Meadow?

The buyer pool is wonderfully small, and you're the big fish in it.

The fact that the former owner saved you half the work should never be mentioned during negotiations. NEVER! Oh no, the former guys screwed up the renovation, it's going to cost a mint to do it right, you're going to have to bring in special people to fix all the screw-ups...milk it for all it's worth. It's your strength and their weakness. They have no blankety-blank clue. They don't want to know. They think they have better things to do than deal with the property. That's why they want to get rid of it.

My most expensive property right now is an old single-family rental that was in a C-class neighborhood which has since turned into an extremely desirable neighborhood for the young urban professional. When I first drove up the street with my wife to look at this place a few years back, we were both seriously worried. Now I look at the place and beat myself up for having so much money sunk into it and a long-term tenant I should probably get rid of but who I'm sure can't find another affordable place to live in within the area and keep sending her children to the same high school in the district. I get cards and letters every two months from trolling investors who know the score and want my property so they can flip it. As soon as those kids are gone, I'll wrap up my business with the tenant and turn that place into a palace for a retail buyer who's never heard of BiggerPockets.

Then I'll take the money and sink it into the edge of the right heroin ghetto. I'll know exactly which ghetto BECAUSE I AM A LOCAL LANDLORD AND CONTRACTOR, and that's how I get paid for staying local.