All Forum Posts by: JD Martin

I'm interested to see what some other, more experienced REI say about this concept.

I have always been a DIY guy. I built my own house - literally, built my own house, contracting out just a few parts of the job - and have always done all repairs/upgrades on others I have lived in. I do my own rental rehabs too, naturally. Aside from the fact that I enjoy working with my hands and taking something that looks ratty and making it look nice (I used to restore old Mustangs, too), I have always felt as though I was translating real skills that I have into real dollars by turning a $10,000 rehab done by contractors into a $2500 rehab done by me, and pocketing the difference. 

Recently I have been listening to the follow-up to Thomas Stanley's "Millionaire Next Door", which is called "the Millionaire's Mind". Without going into specifics, the millionaire class he studies, by and large ground-up rather than inherited, almost to a person eschews the idea of DIY anything, on the basis that their time doing X, whatever X is (lawyering, doctoring, etc) pays far more than what it would cost to pay someone else to do X job (repair, rehab, whatever), and thus it is a financial waste of time to DIY.

Now, not saying I want to be a millionaire (OK, I want to :D ), but I grew up dirt poor and made my way from that point. If I hadn't done it myself, I don't see how I would have likely accumulated capital to get to the point I am now - and, yes, I make a good living at my day job now, but that was really only the past decade or so, and I'm not far from retiring. FWIW, I hold a doctorate and work in my field utilizing my education. I still do all my own work, from changing the clutch in my car to tearing out bathrooms. Last weekend I canned 15 quarts of tomatoes I grew in my garden. I figure it saved me about 40 bucks in canned tomatoes, all told, though the canning took maybe 2 hours in time. The millionaire mind would say that 2 hours would have been better spent buying the tomatoes and being more economically productive.

So what do you all think? 

Almost all dog training is about training the owner, not the dog :)  I will readily admit that I knew nothing about training my dog, years ago, until I took him through an obedience training course, and then realized it was I that was confusing the dog. I didn't understand the psyche of a dog, so all I did was give off confusing and mixed signals. 

I would either refurbish it, or only make absolute necessary repairs and rent it as-is. I would not try to refurbish it while she is in the house. If she has the credit and the income to rent it, I would just consider it a rougher home as long as it's livable, and maybe make it a little cheaper than market (but only a little). Let's say market is 1500, rough condition without rehab is 1000. I might rent it to her for 1350 or 1400, taking some off of what it should rent for, recognizing that her getting in there early (that's not your problem that she wants to get in the school by Monday) will prevent you from rehab and getting full market value. Someone should pay for that consideration, and the someone should be her.

Assuming she gets along well with her parents, I wouldn't be surprised if she stayed a very long time. Having support systems nearby is huge for a lot of people. 

Again, I would not be doing any rehab that involved the living spaces of the house while she's there. Necessary repairs and that's it. Putting a new roof on or siding, things that don't affect the inside living conditions, that is another story. 

PS: I would not rent an unsafe house under any conditions. If there is a danger she could fall through the floor or have the ceiling fall in on her, I wouldn't rent it, period. 

I use a variation of Richard's approach in that my units are all 15 minutes or less from my house but might be further from each other (i.e. going in different directions). I self-manage, and it is important to be able to get to any of my places quickly - I'm more apt to do drive bys, and it's easier for me to get to for general maintenance and repair. This might sound goofy to some people, but I don't buy anything that's further than 10 minutes from a good hardware store (Lowes, Home Depot, Ace, whatever). If I'm fixing something and need a part, I don't want to have to truck 30 minutes to wherever to get it. This also means that I hold properties that are in reasonably urban areas, which meet some other criteria I use to judge whether to buy something (school district, proximity to jobs/shopping, etc). 

I think for a first-time investor, you are best off sticking to neighborhoods you know. If you don't know any neighborhoods, you should get to know them before you sink any money into anything. This is true whether you self-manage or pay a PM company. If you are going to direct your funds into real estate areas that you know nothing about, there are other (and I think better) ways to do it than direct buy and hold properties. 

Your best protection is good insurance. You can be sued by anyone, anytime, for anything. It doesn't mean they will be successful, and if the insurance company is potentially on the hook for 7 figures you can guarantee they will provide you excellent representation. @Nicole W. is right on the money. 

With regard to pets, I don't allow non-fixed pets, require the tenant to list the name, breed, weight and age of the pets, and fix it within the lease to specifically name those pets. 

I would not run a pipe into the sump pump. Why make another appliance work harder to take up the slack? How hard is it to access the home's drain system - surely in Michigan there must be basement access? 

My grandfather used to say "If there isn't enough time or money to do it right the first time, what makes you think there will be enough time or money to redo it the right way later?"

 LoL. It was a rough place when I was growing up there in the 70's. I'm not surprised to hear it's still rough. 

Not sure I would do it on private property. My first stop would be to discuss with my insurance agency regarding liability, both of my tenants and of anyone passing by (attractive nuisance). Large apartment complexes do it, but they also have better access to, and more ability to pay for, insurance protection and maintenance/upkeep on the equipment. 

How far is the nearest public park from your property? That would be where I would direct the children. Municipalities have a lot of immunity against lawsuits that you don't have access to in the private sector. 

Unless he/she has copyrighted it, I don't see how they can prevent you from using it if you like it. I like boilerplate leases specific to the state that are used through real estate companies and other professional outfits because they usually have pertinent information that someone not experienced in drafting language, such as myself, might miss. For example, in Tennessee tenants have the right to 30 days of notice for evictions, but landlords also have the right to ask tenants to voluntarily waive such rights, and that is contained in most TN leases that I know because it gives immediate relief to landlords for non-paying tenants. If I was drafting my own lease, I might not know to put that information in. 

So if I were going to use a custom one like you have, I would have an experienced professional (attorney or real estate property manager) review it for thoroughness. What I like to do is just use a standard one for my state and put additional information in an addendum contained within the body of the lease. 

I use simple Excel spreadsheets that I made for each property. I work in executive management and it would be easy to spend a lot of time buying, learning, and working through custom software, because that is my nature. However, one of the best pieces of advice I ever heard was this: "spend the bare minimum of time and money on things that don't make money". Administrative work largely falls under that heading, so I have a less fancy tracking system and try to spend more time looking at and negotiating deals, finding renters, etc. 

PS: My system was essentially free, since I already had Excel.