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All Forum Posts by: Jeff S.

Jeff S. has started 4 posts and replied 10 times.

Thanks for the responses guys!

Richard:

We put a pan beneath our water heaters as well. We don't have an easy place to drain it if it leaks, but we do install a flood stop safety valve on each unit. When the sensor gets wet, the valve closes, and I get a call from the tenant saying they don't have hot water.

Bill:

We have not checked the anode rods in the failed units yet, but I kept two of the failed units to autopsy them. I'll check that. Thanks for the suggestion! Our water heater arrangement within the unit is not ideal - They are 30 gallon electric units beneath the kitchen counter. It's a real pain in the butt with high labor costs to replace because they have to remove and reattach cabinets from one part of the kitchen to do the work. That said, it would be difficult for us to replace the anode rod without major work to access it. I agree with you that having a backup water heater is a must because you can't complete the warranty on the old heater without bringing the drained heater into the store. calling a plumber out twice and inconveniencing the tenant for a few days doesn't work.

Our water heater problem (layout and performance) has been the most annoying/expensive thing we've dealt with in an otherwise amazing couple properties. We thought we were set for at least a decade when we replaced that last water heater, but reality is setting in that it's going to continue to be an ongoing issue. We are considering making a major change to a tankless solution where we could put 3 gas powered Navien tankless water heaters with a poly tank reservoir and recirculating pump in a ground floor common area and pipe this through all the units. This is a rather expensive solution (likely $30k per 9 unit building), but I'm comparing that cost to the $15k or so that it would cost to replace all the tank water heaters every X years. If the tankless solution gets at least twice the life of our existing setup, it makes sense. Especially considering it would protect us from potential flood damage by taking the water heaters out of the units and putting them on the ground floor in an area that will be easy for a contractor to service.

Anybody have thoughts/experience with Navien tankless water heaters set up in series? Thanks for the responses, and looking forward to the continued conversation.

Hello fellow rental property owners,

I'm curious if other landlords can share their experience with tank water heaters in their apartment units. Mainly, how long are they lasting before they fail and begin leaking?

In the past five years, I've replaced electric tank water heaters in all of my rental units (18 units). In the past few months, I've had three of the 18 water heaters fail. One of the failing water heaters is about five years old and the other two are only 2-3 years old. I have three other units that are already showing signs of corrosion on the bottom seam, so that's 33% of my water heaters that don't even seem like they'll make it 5 years!

 These water heaters are all Rheem brand units, so they are a "name" brand. When I started replacing the water heaters 5 years ago, the old water heaters (also mostly Rheem) were mostly 15 years old or more. Some were even over 20 years old! The water in the city where my apartments are located is said by area plumbers to be "good water", not full of iron or other minerals that might cause water heaters to go bad quickly, and that seems to be true since the old water heaters lasted so long.

I've had an area plumber tell me that all tank water heaters in the US are manufactured by the same three companies (Rheem, A.O. Smith, and Bradford White), and they are all trash. According to the plumber, the companies have all depleted every aspect of the water heater from the steel tank quality and thickness, the glass lining thickness inside the tanks, the welds, and they've even gone cheap on storing and transporting the heaters. The companies also all managed to nearly double the price of their water heaters in the past 5 years as well.

Hearing this news from the plumber was rather alarming as it drastically changes the cash flow that I can expect on these properties if I can't buy a water heater in this country that lasts much more than 5 years. If what the plumber said is true, I can't be the only one experiencing these fast failing tank water heaters, and I figured this would be a pretty big topic of conversation amongst landlords here on BiggerPockets. I'm not seeing those conversations though. Interested to see what everyone's thoughts and experience are on this topic.

Thanks,

Jeff

Justin Kane,

Not sure why you would think I am making it difficult.  Are new class A buildings the only type of buildings that require security?  I'll elaborate a bit on our security issues...we are 99% certain one of our inherited tenants is allowing drug dealers to run their business out of one of our units. We've discovered that a couple of the people involved in this activity have dangerous criminal backgrounds. So, If we could install a key fob system affordably, it may be a smart way for us to get those characters out of the building without creating direct conflict between them and us (they would choose another property where it is easier for them to perform their illegal activity). 

This is the only unit in our building that we have concerns about criminal activity, so we wouldn't install the system if it costs say $5,000 or more.  That's what I'm trying to figure out here...What are our options and what are the costs involved? 

One of our nine-unit apartment buildings has been having a few issues with security lately. We've had some packages and equipment stolen along with complaints of non-tenants coming into the common areas at all hours of the night. We are considering a couple ways to combat this type of activity to make all the tenants feel safe and to protect our investment. One improvement we have considered implementing are new security doors with an automated key fob system instead of keys. Since the key fobs will be difficult for the tenants to copy, we think we can better control who has access to our buildings. I was hoping to get some information and recommendations from people who have implemented this type of improvement in their building. Our goal is not to protect Fort Knox, but instead find the most cost effective way to make it difficult for non-tenants to access our building. Here are some of the questions we have:

1. Is there a brand or company that you have used for keyless entry systems that you were happy with?

2. If so, can you give a summary of the company/system, some of the features of the system, and what you liked about it?

3. How are the locks installed? Are new doors required or can we retrofit the lock onto the existing doors?

4. How are the fobs programmed?

5. We have four access doors, and all tenants will have to access all four doors. Can one fob be programmed for four different doors?

6. Is there a web/app technology associated with the system that would allow us to track certain things remotely? Such as which fobs are being used and when? or alert us when a door is left open?

7. Can you provide any cost information that you have about the system?

We are also considering installing security cameras both outside the building and in the common areas. We would appreciate any information you can provide on cloud based camera systems that you've used and had a positive experience with.

Thanks!

One of our nine-unit apartment buildings has been having a few issues with security lately.  We've had some packages and equipment stolen along with complaints of non-tenants coming into the common areas at all hours of the night.  We are considering a couple ways to combat this type of activity to make all the tenants feel safe and to protect our investment.  One improvement we have considered implementing are new security doors with an automated key fob system instead of keys.  Since the key fobs will be difficult for the tenants to copy, we think we can better control who has access to our buildings.  I was hoping to get some information and recommendations from people who have implemented this type of improvement in their building.  Our goal is not to protect Fort Knox, but instead find the most cost effective way to make it difficult for non-tenants to access our building.  Here are some of the questions we have:

1. Is there a brand or company that you have used for keyless entry systems that you were happy with?

2. If so, can you give a summary of the company/system, some of the features of the system, and what you liked about it?

3. How are the locks installed?  Are new doors required or can we retrofit the lock onto the existing doors?

4. How are the fobs programmed?

5. We have four access doors, and all tenants will have to access all four doors.  Can one fob be programmed for four different doors?

6. Is there a web/app technology associated with the system that would allow us to track certain things remotely?  Such as which fobs are being used and when?  or alert us when a door is left open?

7. Can you provide any cost information that you have about the system?

We are also considering installing security cameras both outside the building and in the common areas.  We would appreciate any information you can provide on cloud based camera systems that you've used and had a positive experience with.

Thanks!

Hello, I own two 9 unit apartment buildings in Morris, IL.  I have several projects planned at the buildings and wanted to reach out to the Bigger Pockets community for help finding quality contractors in the area for the type of work I am looking to do.  I'm looking for quality contractors who can perform the following work:

1. Seamless Gutters

2. Trench Drain Installation within an existing concrete parking lot (roughly 75' length)

3. Attic Insulation and venting

Thanks for any help you can provide!

Another quick question for you guys...Is it customary to show lawyer/accounting fees and advertising fees in the building’s expenses, or is this considered the cost of doing business?

thanks @Kyle Lewis and @Immanuel Sibero !  Appreciate the deeper explanation.

Hi everyone. I am considering making an offer on a multi-family building for the first time, and this question has come up between my business partner and me. We've lined out every possible capital expenditure that we can think of and boiled it down to a monthly expense for the building. In this thread, most are saying these capital expenditure reserves should not be part of the NOI equation, but it makes a huge difference in the value of the property (and what a reasonable offer would be). Calculating NOI with CapEx reserves accounted for above the line, the value would be around $885,000. With the CapEx reserves left below the NOI line, the value would be nearly $1,150,000.

Obviously, as the buyer, I like the $885,000 number a lot more because the deal actually works at that price!

I'd like to hear a little bit more from the experts about how I should think about this when making an offer on the property because I don't think the deal works with CapEx below the NOI. By the time you factor in the extra down payment and higher debt services resulting from a higher offer, it totally destroys cash on cash return...Like pretty much eliminates it. We think we are being pretty accurate with our CapEx reserve calculations (not inflating costs or useful life), so how can this work with the CapEx outside the NOI?

Also, as pointed out earlier, the Bigger Pockets calculator has the CapEx reserves above the NOI line, so you can see the confusion.

Appreciate any additional help that the experts can provide for us!

Marc,

Thanks for all the help!

Jeff