All Forum Posts by: Jeffrey A DeAngelis

Not sure your location - but I would CERTAINLY complete a tank sweep. They are relatively inexpensive and you can always put that as a contingency on the property. Basically you hire a contractor to come in and sweep the property for an underground oil tank. If there is a buried tank then you seriously risk soil contamination if the tank ever leaked oil. This could be a HUGE clean up cost in the high thousands. Just because you see an oil tank in the basement or external does not mean that there isn't a tank underground that was previously left. Tank sweeps by me (NJ) are about $250. 

Septic systems can be another detriment. More Septic systems seem to be "failing" lately as more and more septic system testers would rather slap a "fail" sticker on it as opposed to being sued down the road. 

I had a mixed use property in the past. 1 commercial use and 3 apartments. I had that set up under a LLC. I will save the details but lost that property in a divorce.

Fast forward to present - I will be closing on a single family home soon that I was able to pay cash for. Update with small improvements and then rent out. My plan is to BRRR the property.

Question - Trying to understand the pro's and cons of putting this in an LLC. I realize the tremendous write offs for an LLC property, but I've heard other sides of the equation about not getting the same rates to finance additional properties. I would also assume that in the event of a lawsuit the LLC would prevail as opposed to personal property being attacked.

Interested in hearing more experienced thoughts. 

Thanks!

I'm on the fence about a property and looking for some feedback.

I ran a quick analysis and story checks out EXCEPT for one pitfall 

2 bedroom house - offer $65k cash (foreclosure) with a tank sweep contingency to the bank (local comps are about $140k) with a 30 day closing. 

Rehab for $10k (yes it's not that bad - mostly cosmetic) add another $5k for mechanical that haven't surfaced. 

Assume $80k initial investment (cash). 

Rent for $1300 monthly and the 50% rule is above $650. Hot diggity. 

Here lies the problem

Property has a current cesspool.

As a cash buyer I would not have to convert to a septic as most mortgage companies would mandate that. So continuing cesspool it is for the renters. 

BRRRR X years down the road or flat out sell and I would have to add a septic system. That is  $25k plus deal with neighboring wells that I would pretty much guarantee don't have the 200 foot well liners so now we are talking probably another $12k for the well liners going deeper OR implement a self contained septic that I don't know much about. 

Financially I think this makes sense but never had to deal with cesspool and then figuring out how to make the property valuable down the road. I can refinance down the road for the septic system to resell the property I suppose. 

Thoughts?

Pleasure to meet you all. I'm from the local area as well. Welcome!

Somewhat of a newbie here to the forums, well...not somewhat. I am a newbie here so if this is the wrong forum I apologize now.

Here is the scenario - I've bought to hold and rent out int he past and recently came across a bank owned property pretty cheap - I ran the analysis based on what I know in the area and come up with IRR of 13% projection based on calculations and minimal investment. Not to bad. The ONLY hesitation I have is that the unit has electric heat. This is located in northern New Jersey and I am curious if anyone has experience with renting any units in the North East US area with electric heat. Electric can be expensive. Have you had to lower rental income to compete? Was it tough to find a tenant because of this? Or am I thinking to hard on this?  Thanks!