All Forum Posts by: Jaron Walling

@Lisa Mallory 

I'm glad your doing okay! Sorry to hear about your property. We took this disaster personally as we love Asheville and have visited many times.

When there's an official presidential disaster declaration (there was), flood insurance policy holders should apply for FEMA assistance in addition to their flood insurance claim. I would apply because FEMA disaster assistance can help with uncovered expenses, and we all know how insurance companies play games! I can't speak for the taxes or how to handle that so ask your CPA when the time is right.

I'd review of your flood insurance policy and see what's covered. Hopefully your insurance is pretty good. Be glad you had it. FEMA assistance is pretty limited. Anything is better than nothing.

I work with floodway violations at the Indiana DNR. My job is stopping and/or limiting construction in mapped floodways. The flooding that occurred NC/TN had to be beyond mapped zones. 

My family is donating supplies for the flood. I'm posting on socials and posting on here. We're working with Civilian Crisis Response Team (https://7ccrt.org/Donate). They're coordinating with other agencies, collecting supplies (they have a list), and flying it down on Saturday. I think there doing multiple drops but we don't know. 

The disaster services are 100% funded by it's members and donations.

We had a vacation planned for Asheville in 2 weeks. We hope for a quick recovery. Sending prayers from Indiana.

Sounds like you're doing the right thing. I'm glad your tenants are okay! It's really sad to see everything destroyed. It's hard to watch the flood damage in the news because my wife and I have visited numerous times. We got married in Asheville two years ago. 

FEMA rental Assistance covers the cost of monthly rent and essential utilities, gas, electric, water, trash, and sewer. It does not cover phone, internet, or TV.

I'd open up the STRs for locals in need. You're going to have cancelations because nobody OOS can safely travel. We just cancelled our family vacation to Asheville. We were suppose to be down there on Oct. 14th, but have no way to visit due to the damaged roads. We were looking forward to taking our 10 month old son into the mountains. Hopefully your properties can benefit someone else. 

"FEMA announced that federal disaster assistance is available to the state of North Carolina to supplement recovery efforts in the areas affected by Tropical Storm Helene from Sept. 25, 2024, and continuing."

"The President's action makes federal funding available to affected individuals in Alexander, Alleghany, Ashe, Avery, Buncombe, Burke, Caldwell, Catawba, Clay, Cleveland, Gaston, Haywood, Henderson, Jackson, Lincoln, Macon, Madison, McDowell, Mitchell, Polk, Rutherford, Transylvania, Watauga, Wilkes and Yancey counties."

@Joshua Melero We had vacant property that were remodeling and considered installing cameras inside the property. At the time my wife and I were very hands on with remodels. I worked late hours getting projects completed so I never installed cameras. When we get into our next property and remodel I'm installing the system linked below. We did buy the basic indoor system for our primary residence and use it everyday. It's super easy and runs via the app or keypad.

https://simplisafe.com/

From the website - "Without Wi-Fi, you can still change your system and sensors’ basic settings via the Keypad as well as take advantage of our Professional Monitoring service’s basic features. And if you are subscribed to a monitoring plan that includes cellular backup, your Base Station will still communicate with our cellular connection back-up."

The service is not very expensive and once the remodel is complete you could take it all down. You don't even have to drill holes in the walls to mount stuff. You can have multiple base stations and multiple properties all connected under one account. You can buy extra indoor cameras or customize kits. Cheers man. 

@Chris Villegas The original tenant is responsible for any action that takes place in your property. They're obligated to honor the lease agreement. Read your lease agreement (again) and follow it accordingly. 

You should have clauses in the lease that describes what takes places if someone moves out, moves in, or tenants want to break the lease early. Allowing them to move in depends on your screening criteria (criminal findings) and your history with the original tenant. Text messages and phone calls go a long way here. If you have a long standing tenant, good communication, and rent is paid on time this shouldn't be an issue. 

It's a case-by-case situation but it's also a business. Don't be waver from your lease and screening criteria. 

@Jared Sliwinski Are you living in the property? If so you can rent rooms to anyone and nobody can stop you. I rented a room to my brother for 2 years when I bought and remodeled my first property. 

If you're not planning to live in the property you can still offer rent by the room. I'd be shocked if Youngstown, OH has regulations regarding this. Every tenant would have there own lease stating the rules and responsibilities for BOTH parties. I've always compared rent-by-room to student housing. During my time in college I never lived on campus and rented four different houses with roommates. We all signed leases individually and the landlords never had special zoning or permits. If one of the roommates (tenants) moved out the others had to cover the difference in rent or find a replacement tenant. The person moving out also have the option to find a replacement. 

Rent-by-the-room is a great strategy in this market. It provides housing when we have limited supply, it's a good way to find tenants and make friends, and it produces a great ROI (if managed correctly) because the rental income is generally higher. If you live in the property it's basically a house hack. It's a win-win for anyone with flexibility in there life. Best of luck man.

@Austin Bird Good looking spreadsheet. I'm not sure if this is BRRRR deal or flip but the numbers are fairly accurate.

IMO here are some issues;

#1 Do you have experience with foundation repairs? Does the property actually need this repair? $25k for that expense is huge. It's a deal or no deal issue if you ask me and we have REI experience. We cosmic+ remodeled an entire SFH for <$25k. If you decide to buy a property like this you probably need to buy it cheaper, get multiple quotes, and talk to contactors in person. That's when you ask detailed questions. That's how you read body language, negotiate, and get a better price.

#2 $12k for the entire kitchen or just cabinets and countertops? Plumbing, GFCI outlets, tile backsplash, etc.? This is over priced unless you're remodeling a big kitchen, going luxury, or looking to flip. 

#3 $2500 for painting (assuming interior) is incredibly low unless you're doing the work yourself. Two coats of paint including ceilings and trim for a 1200 sqft. house in our market is at least $5k including materials. You can probably "find a guy" for cheap but they will spray everything (blow and go) and cut corners. Depends on your expectation for this remodel. Cheaply painted houses drives me nuts. Think about the end buyer or renter. 

The negative CF hurts but how much equity is created remodeling this property? What's the ARV? That's where you build real wealth. It's the spread between the purchase, ARV, and future cash-flow (lunch money). Maybe rates dip a little and you rent it for $1400 next year. That could boost cash-flow and make this a fantastic deal.

Cheers man

Like other cities Indy doesn't have progressive zoning and permitting laws. You run into some barriers other investors complain about. 

We had the same idea in 2019 while remodeling our first SFH. The cost of construction was insane. We needed an upgraded 200amp electrical panel ($5-8k), extended water and sewer for the garage ($5k), built out interior ($7k?), new windows for egress ($3k), etc. It started snowballing out of control and that was if the ADU was permittable in the first place. We spent an equal amount remodeling the main house and that included a new roof!

The potential for rent (STR/MTR) never made since from an investment prospective. It's probably easier to tear garages down and start over, but I climbed out of that rabbit and stopped researching it. You need a property with unique features worthy of the investment, I.E attached garage or partial finished ____ so you're not starting from scratch. None of our rentals have that so it's not worth pursuing.

We see new builds with garage ADUs all the time. The potential is there but you have to buy a new house to get it. Great for a new homeowner, house hack, or large family. 

I hope others chime in on this conversion. I know it's a successful strategy for investors in other states. Maybe people are successful with it in Indy. If so that's encouraging. 

@Grant Bartel Replacing a bathroom vanity is a common upgrade or replacement project. The only things you need are the dimensions, photos of the plumbing, and a budget. With that information you can be find a vanity at any big box stores or even the scratch and hint stores. Some of the new stuff comes with a replacement mirror which is a great addition. Some come a facet, others don't, just shop around.

If you DIY the install you'll save more money. Either way buying it and having on site will save you time and labor costs provided it fits the space and works with the existing drain. 

@Ian Jeppsen This is a bread and butter rental. The tenants are paying down the loan, not you. The growth on equity is outpacing any cash-flow. If they pay on time, you don't have much turnover, and you don't see big capex expenses on the horizon I'd continue to hold. It's a win-win. Hopefully you have reserves for a rainy day. You could tap equity to pay for it worse case. This property gives you options. Pulling this off on a 15 yr note is crazy now days.