All Forum Posts by: Jay Compton

@Ryan Boltman as someone mentioned earlier, Amazon already has a presence on the western side of town in Bessemer, but now they've bought the old Century Plaza mall in the Irondale/Eastwood area and are in the process of demoing that old mall and will start a new facility there too....So Amazon seems to think highly of our little Southern piece of pecan pie.

I've been investing in and around Bham since 1992, so I've seen a lot of ups and downs. I've never seen anything like the positive momentum we're feeling in the market today, even in the biggest boom times of '02-'06...and those were some fun times.

The national news tells of all the people that aren't working now, but it doesn't feel that way here. We just ran an ad to fill a new position in our company...we filled it today...but we had 72 applications and 68 of those people were already in a job. They were just looking for something to better themselves. That tells me a lot about the state of our current workforce. This is nothing like it was in 2009-2011.

As long as you buy and maintain 20 percent equity or better (as a fail safe, in case we see another dip) and stay out of Centerpoint, you'll do fine around Birmingham. As long as people are working, they need a good, clean place to live.

Good luck....

@William Hollifield do you mind telling us what you're getting monthly out of Section 8 for a 3/2 now? I haven't done Section 8 in years, but I bought a 3/2 this year that will be going into it, when I get the repairs completed. Just curious on what they're paying now. I haven't checked their rates in several years. I assume you're going through HABD (Housing Authority Birmingham Division) for your Section 8.

Thanks,

JC

I think you would find a hard time getting a low deductible AND a low premium...really from any carrier today. Before I started with NREIG 3-4 years ago, I had Cincinnati write my builders risk and GL. Cincy is high, but they're good and they pay if you have a claim. 

Just know going into any builders risk policy, you're going to pay a lot higher premium than a typical homeowners policy or even a landlord/tenant dwelling policy, and most of the time you'll be getting a glorified ACV policy versus the RCV policy you're used to on your personal home. BUT...you're also paying a higher premium because there's a much higher risk with a vacant property. There's no one home to put the fire out or turn the water off if a pipe burst. (My current builders risk policy with NREIG doesn't cover ANY water damage at all, but we have a fire & water restoration business too, so I can handle that).

We all know this already, but there's no free lunches in this world. When you have a claim, you're not going to get the benefits of being insured by Cincinnati or Chubb, all while paying the premiums of NREIG. It's just not going to happen. If you want the best coverage in case something happens, call an independent agent and tell them you want a policy with Chubb...then be prepared to write a big fat check for that premium.

As Dave Ramsey used to say, drive into any major city in the US and look at the names on the largest buildings downtown...usually either an insurance company or a bank, or both. You don't pay for those big buildings with low premiums and cheap rates.

Good luck...

Jay

@Mat K. This same situation has happened to me several different times, in several different buildings over the years, so I want to add a few thoughts for you to ponder with all the other advice you're getting.

Sometimes a running toilet (i.e. a leaking flapper) doesn't always have to run constantly 24/7 to cause an expensive bill. It can surge leak every few minutes or even every few hours. That would still cause your bill to blow sky high, but might honestly be imperceptible to your tenant.

If you spend $5 on a flapper, instead of $13 for a better quality part...or spend $100 on a toilet (which has a $3 flapper inside it) instead of $250 on a better quality toilet with better quality parts inside it...be prepared for this to happen again in the near future. Try to start moving your units away from any plastic parts on the supply side of your water (other than PEX). Look at your kitchen faucets, vanity faucets, stops under each sink and behind the toilets, and inside the tank of each toilet. If you see plastic on any part listed above, make a note of it. Doesn't mean you have to replace everything at once, but you do want to replace it with a quality metal part at some point in the near future. Plastic just doesn't hold up long term to high pressure and the types of chemicals most of us have in our water supply.

Speaking of pressure, buy yourself a $10 water pressure tester from HD, and check your water pressure every six to twelve months. If the pressure is high, that means your regulator is probably bad, but more importantly it means you're about to start blowing valves and seats and flappers all over that building. Try to keep it under 60 psi.

If you're water department is both water and sewer combined, you can usually get the sewer part waived, since you'll be able to prove with your plumber's invoice that you had a leak, and the water that leaked out clearly didn't make it down their sewer line. They can go back to the same month last year and see the difference of usage. Usually they'll waive the extra usage, if you ask nicely.

I had to learn the hard (and costly) way about every one of these things. The majority of tenants I've had over the years would not be considered conservationists by any stretch of the imagination, so if we had a high water bill, it fell on me to find the problem...or pay a plumber $125/hr to find it for me.

I never will forget the time I opened an $11k water bill for a 70 unit property. We told everyone to help us conserve water while we tracked down the problem. The very next day, I drove up to find 12 female tenants running their weekly Saturday afternoon "free" bikini car wash...tip bucket included... With my water. Haha. I can laugh about it now.

Good luck...

Jay

@Laura Kusto I've personally never had any dealings with Spartan, but I do have an old friend that works for them. I know the type of character she has, and I don't think she would have stayed with them so long if they were shady. The few people I've run into over the years that have worked with them (wholesalers, vendors, etc...), all have nothing but good things to say about them.

We have a family business here in Bham, and my suggestion would be to find the owner/CEO of Spartan and send them a short (polite) email with your concerns. If I were just guessing, they probably have no idea you're upset. Things can happen in business, but there's not one employee out there that cares more about keeping a customer happy than the owner of the company. I would give them the benefit of the doubt that they will make it right for you.

Good luck...

Jay

@Laura Kusto we have a restoration company here in Birmingham, so I deal with water damages everyday.

You didn't mention if this was something that just happened, or maybe it happened back during the spring or summer and you just found out about it. It would be very unusual for a condensation line blockage to cause problems this time of year here in Birmingham because it's been cold here lately...so nobody has their air on...and the unit doesn't produce condensation in heat mode.

For a future preventative measure though, I would recommend you have an HVAC company install a pan underneath the unit in the attic (if there's not one there already) and attached to that pan, ask them to install a "float kill switch". That way if the unit ever backs up again, the condensation will go into the pan, and once the pan fills up to a certain point, the float will "kill" the unit. It will shut off the AC until you can get it repaired.

What I did to my unit in the attic of my own home is, I placed one of those smart home leak detectors inside my pan. That way if it ever gets the slightest amount of water in the pan, it will send a message to my phone. I have those Samsung detectors under every sink, behind every toilet, behind the washer, etc. The battery lasts about a year in each one, and the app even tells me when the batteries get low....When you deal with water damages everyday, the last thing I want to do is come home to a flooded house.

Good luck, and if you would like me to go by and check it out for you, I wouldn't mind. Just message me. Sounds like you could use someone's honest opinion of the situation.

Jay

@Donna Coffman don't be embarrassed about it. The only positive thing I've heard out of all of this is the amount you paid out. By being $10k or more (as well as it being multiple state commerce) that should trigger the feds on your behalf...and they will never stop til this person (or group of people) is caught.

I got scammed out of a $14k gold Rolex in 1998 and I was embarrassed as all get out, but the FBI eventually caught the dude almost 10 years later. He did swindle a lot more people, but it still felt good to hear he got caught.

Good luck and keep looking. You'll find that right house for your daughter.

@Chase Maglangit You may want to steer clear of 35215 going forward...and possibly even parts of 35235. Those two zips are quickly making the daily headlines for shootings, car jackings, break-ins and all the fun stuff that goes with it. There's a lot of really good people in those areas, but those good people will leave if they keep reading about shootings in their backyard every other day.

And locally, I've never heard a bad word about Spartan.

I've been flipping and renting since '91 around Birmingham, Alabama, so I've seen a few...from the courthouse steps, we bought a funky looking commercial building on 6 acres in a bad part of town one time for $24k, rented it to a shady "casino" group for 12 months at $2k/mo, then sold it for $180K on the 13th month.

We bought a SFR on the courthouse steps in a different county for $80k. Went to place the vacate notice and found out a lease-purchase tenant was living in it (they lost their down payment to the previous owner, so they were not happy to see me). I wound up selling it to them for $135k ($15k less than they were going to pay for it). We closed 40 days later, and I never even saw the inside of the house.

My best percentage deal BY FAR was one I just finished back in February of this year though. I bought a lot for $2...the opening bid of the sale was $1 so I had to bid over that (and no one else was there to bid against me). So I actually paid $2 for it. Once I got the deed recorded, I went by the lot and hammered in a FSBO sign. The lady next door came out and asked me what I wanted for it. I sold it to her $7,000....$1,000 down and held the note for 3 years at 6%. She paid me every dime and was happy to do it. She was proud to have a bigger yard then her next door neighbor...And I was happy for her.

A friend of mine did the same thing years earlier (this was like 2002, maybe 2003). He bought a junk house for $2 at a sale and only had a $1 bill in his pocket. He borrowed a dollar from another friend that happened to be walking out of the courthouse (he assumed he was getting a drink or something). We used to laugh and say he's the only guy that could buy a house for $2 and had to finance 50% of it. He did OK though. I paid him $5k for it the next day, then I sold it for $12k the next day. Those were fun times.

But....I guess it goes without saying, they all weren't like that.