All Forum Posts by: Jordan B.

Hello,

I purchased a home about 4 weeks ago that I planned to live in for a little while and then rent when I am ready to upgrade.

The other night I was taking a shower and someone else was running the sink. There was a backup that cause the water to drain slower than usual and the toilet started gurgling and water started accumulating in the shower tub as well. Next thing I know I have water raining in the living room below the bathroom.

Once the plumbers arrived and before they started to try and snake out the clog they asked to open the access panel for the plumbing. What they found was all new plumbing and an PVC drain tube that had a rubber fitting on it connecting a 4 inch gap that was not properly connected. This poor plumbing work cause the water to not stay in the tub and to leak out causing the water damage to the ceiling.

I was surprised to see all the new plumbing in the bathroom because the sellers disclosure stated it was only cosmetic upgrades to the house and no permits were issued for any of the work. I also confirmed with our borough that a permit would be needed for all the work that was done (this was over the phone. they do not know my address or situation).

Now I am very concerned that all this work was not inspected and I could have issues down the road. I literally cant sleep thinking about this.

Can anyone help guide me to the appropriate steps in this situation? Should I contact the company who bought and flipped the house? Am I SOL??

This is what the plumber found when he removed the access panel. He strongly urged me to take pictures of everything.

[img]http://i66.tinypic.com/2preg44.jpg[/IMG]

when the rubber coupling was removed, this was the large gap between the pipes

[img]http://i64.tinypic.com/o8bhqc.jpg[/IMG]

[img]http://i64.tinypic.com/1zo7q12.jpg[/IMG]

Had I known the plumbing was all redone and electrical work was performed without a permit, I would not have bought this house.

What would you do in this situation???

@Josh Dotzler, or anyone else that can chime in.

How would these numbers look with the below scenario

Purchase Price: $150,000

Gross Potential Rent: $1950/month

Property Taxes: $324/month

Insurance Estimate: $60/month

Trash/Sewage from your estimate: $105/month

Maintenance Reserves: 10% or $195/month

Vacancy Loss: 8% or $150/month

Cash Flow Before Mortgage Expenses: $1,116/month

Potential mortgage: $773

Monthly cashflow: 343

I am just now figuring out about this DIG group. I am going to go to a meeting and see what its about before I join. 

@Steve Babiak Hi Steve, I just came across this searching for Montgomery county. How can I start attending these meetings and find more information? I actually go to Champs in Collegeville every so often. Small world..

This is some great conversation! I see no problem with getting a real estate license. I hear there are downsides to it but I haven't bothered to look into them yet. This is basically because my mind is made up. I sound stupid i know.. 

I want my license because I to am interested in investing. I hate that I bother my current realtor who happens to be my girlfriends cousin who has 4 kids and lives far away from us. I feel its a lot for them to come show us properties that we will most likely not buy. For me its worth getting the license to gain access to the MLS for the obvious reasons, I can make some side money, its always something to fall back on and do full time if my job situation changes and most importantly I can go visit listings on my own on my own time. I no longer will have to schedule around a realtors time. 

@Matt T. Sorry Matt, this is an estimate that is not accurate. 

@Josh Dotzler Thank you Josh. Here is the listing I am referring to

http://www.zillow.com/homedetails/519-New-St-Sprin...

I don't feel it needs any work at the present time. I would plan on living in the 2 bedroom until and convert the attic to a third bedroom by doing the work myself. As mentioned above. when the current leases run out, I would not plan on allowing access to the garage to future tenants. I have about 12 motorcycles and would love the space for myself. I am currently renting space for them at the moment. 

I would plan on staying in this property for 6 to 12 months before moving out. This would secure my FHA mortgage.

I will consider submitting an offer @ 126,000 fully prepared to walk. 

@Roy C. Thank you for your analysis. What would you recommend the purchase price be in order to consider this a good deal?

Side note: The property has a two car garage located in the back of the house. Currently, each tenant has one side of the garage. One unit is a two bedroom and one unit is a 3 bedroom. The difference between the units is that the 3 bedroom has the attic converted to a bedroom. The 2 bedroom unit uses the attic as storage space. I would plan to convert property to each have 3 bedrooms. I would also not include the garage space in future rental contracts. 

Based on comps, I believe each unit will be able to generate $1,000 a month excluding the garage space. 

@Phillip Coleman , thank you for bringing up these excellent points

@James Wise , great point. I plan to live in one unit myself initially to secure the FHA loan and interest rate.

@Josh Dotzler Thank you for the breakdown. I have also read and agree that occupying your first purchase is a great way to get started in real estate. My significant other and I were initial looking for a SFH but I managed to convince her this was the best way for us.

Josh, what would you opinion on this deal be? What is the maximum purchase price for this duplex before I should consider walking away?