All Forum Posts by: Jeremy Gray

Allen Griffen works out of the Roseville area. He is very good and I have used him on a number of deals. He is a smart and very experienced broker and I will use him again on my next deal. His number is 916-705-0029. I fixed up a home in Roseville according to his recommendations and had it staged by someone he recommended. He helped me price it so I had 13 offers in 24 hours. I took one that was $78K over asking and was all cash. I had another offer that was higher, but he sniffed out a bunch of problems that would have cost us both time and money if we had taken the slightly higher offer. It was a 1031 exchange and he also did the deal on the replacement property in Rocklin. That one I did a complete remodel including new flooring, landscaping, roof, and 3 bathrooms. I am already up quite a bit on that one once I refinanced it, but I intend to hold that one. This was all at the end of last year at the peak of the market, and I still managed to find a way to make money thanks to his help.

I appreciate all the advice. What I have done is I asked him to listen to some of the BP podcasts dealing with house hacking. Hearing the stories that others have experienced will give him an idea of what other people have done and how it has provided both opportunities and challenges. Ultimately it comes down to if he wants to be a real estate investor or a just a tenant. I considered the condo vs. house. The potential upside in this area is much greater for a house, although the trade off is maintenance issues are much greater with a house and yard. The choice will be up to him and he may chose neither option and elect to just rent a place from someone else. Whatever he decides, I will be good with it and I am confident that he will find his own path.

My son graduated from college last June and has been working part time and living in our house, but is planning on going to law school in the Fall of 2020. He and his buddies have been trying to find a house to rent, but haven't found anything yet. They are all in their early twenties with new jobs and little to no job and rental history. The area he is looking at is a decent established area and the rents would support the mortgage, taxes, and insurance but with just enough for repairs and maintenance and little to no return. He has inherited a little money from my parents that would cover a 10% down payment plus he has saved enough for another 5%. I was considering helping him out by cosigning a mortgage and helping with the closing costs, so he could house hack instead of renting.  I was thinking I could have a separate contract with him that would obligate him to make the payments in a timely manner and maintain the home in exchange for my cosigning the note. If he failed to maintain the home or make the mortgage payments on time, I would have a quit claim (signed by him when I cosign the note for him) that I would only file if things started to go sideways at some point. He is a smart young man, doesn't do drugs, but he can be a little lazy and is a bit of a slob. His friends are all good guys, but none of them are knocking it out of the park getting started with their lives.

As an alternative to him buying it, I could just buy it myself and rent it to him and his buddies, but then we would miss out on the lower down payment and lower interest rate of a first time home buyer. If I bought it, he would be have a decent cushion to pay for part of his law school tuition.

I am looking for thoughts and opinions.

Hi,e

I am new to BP and to Reno, but have a couple of rentals and a fair amount of experience. I can tell you something that might not be in the news. I have a young man helping with some of my properties now that was working at the Tesla factory in Sparks. He and his entire team got called in today, Sunday, which is what they do when they are laying people off. I think Tesla might be scaling back a bit right now until things get on better footing. I will let you know what happens.

I too am interested in buying property in the Reno/Sparks area, specifically a small multi family property under 20 units . We moved to Reno at the beginning of this year and live in the south part near Mt. Rose. I am looking to do some networking in the area and meeting some other BP followers. I would love to know if there is any kind of REI meetup in Reno and if not, we should start one.

I don't know if this has already been addressed but in case it hasn't here goes. 

Do you have an air conditioner that is relatively new and just needed a new evaporator coil or is leaking refrigerant? 

I just posted a reply on a thread regarding tenants complaining about repairs taking too long on an air conditioner and I realized that this A.C. issue needs it's own thread. There have been a number of class action suits (Thomas v. Lennox is the one I am familiar with) regarding failed coils. If you have just had to deal with a big repair bill on a fairly new A.C. unit, it might be due to this same defect.

I found this out completely by luck when I discovered our 4 year old Lennox A.C. unit was blowing hot air. I called the installer and they were 2 weeks out because temperatures here are in the 90s-100s right now. So I called another company and they said they could replace the coil for around $1,000. I freaked and started looking for new coils online and found out about this lawsuit. 

Long story short, I was able to convince my original installer that I deserved a new coil and free installation because this was obviously a manufacturer's error (Lennox lost the suit) and I as a customer should not have to bear the cost of their mistake. It turns out that most of the copper coils used in A.C. units in the past 5 years or so are breaking down because of some reaction between the new R401 refrigerant and the copper coils. The coils need to be replaced with aluminum or copper that has been coated. Now for the disclaimer, I am not a lawyer or an HVAC technician. I am simply passing on information in the hope that it will help someone else on BP find out what I did much quicker.

I hope this helps at least one other person on BP avoid paying for replacing a defective coil in their A.C. unit.

Here is the website I found with the information

https://www.evaporatorcoillawsuit.com

I did not browse all the replies, but a note regarding the A.C. unit failing in the first 2 years. This sounds like a coil issue. There is a major class action suit regarding failed copper evaporator coils in A.C. units installed in the past 5 years. The new refrigerant R410 when expose to air containing chemicals found in some typical household cleaners can cause the copper coils to fail prematurely. I have an A.C. repair guy in my attic replacing the coil on our unit. I am not being charged for anything other than refrigerant and I think I can get that reimbursed through the class action settlement. You should get online and find out if your unit is part of this recall and also make sure that if you did just have the coil replaced that they used either an aluminum coil or a coated coil so it doesn't fail again in 2 years.

I am going to bring up a different point and many will find it completely irrational. Is it about the money? If it is, raise the rent and turn it over. 

But....I can tell you that it doesn't always have to be about the money. If one can afford to put a deserving person or family in one of their rentals and keep the rent below market, it is a kind and generous thing. You will always have zero vacancy and your maintenance costs will be lower than normal because your tenants will do what they can on their own to keep the place nice.  Choosing the right tenants becomes a dream as you will always have more applicants than you can possibly screen. I accommodate this by not showing the property, but by scheduling an open house instead. You will know the right tenants right away because they will recognize their fortunate circumstances and will appreciate it.

Your circumstances might not allow for this generosity, especially if you need the extra money to pay your own bills. But if you can do it, even if it is on just one of your units, it is a mighty fine thing to provide a home to someone who could use and deserves the help. If you have been blessed with luck and the right circumstances, pass that on and it will come back to you many times.

If it is strictly about the money, treat it like a business and maximize your ROI. But as you get more successful, remember that the freedom that financial success provides can be used to choose to be generous. Of course you can always keep your rents at market rates and donate to your local homeless shelter. This is just another option.

I am not an attorney, but I have fixed up numerous house and have run 2 construction companies and can speak from my years of experience in California. I would draft my own contract or have my attorney draft the contract or modify the one provided by the contractor to include the following:

Detailed scope of work, start date and completion date with penalties for exceeding the completion date without prior written permission. Also specifying any specific materials, finishes, and any specific objective level of quality of workmanship that you require.

Requirement for providing certificates of insurance including both liability and workers comp (if workers other than the owner are employed) naming you as additional insured. Provisions for dealing with disputes (arbitration or mediation, etc). I would also include provisions covering daily clean-up and protection of materials and contractor's tools, and adhering to all standards of safety as required by OSHA and state and local law. 

Total compensation with a provision for written change orders that are approved by you prior to start of change order work. No more than a small initial payment to cover initial materials required for the start of the work to be paid at start of work once all documents (including insurance certs) are submitted.  Progress payments to be made upon your inspection and approval, holding out at least 10% until final inspection and approval of any permits, and 30 days after completion or until unconditional lien releases are submitted for all subs and materials for which preliminary 30 day notices have been filed.

In larger time sensitive projects you can also negotiate for of a performance bond which would compensate you for failure to complete the project on time and to the specifications in the contract.

Always check the status of the contractors license with your state contractors licensing agency and verify that the guy signing the contract actually is the contractor whose license is being provided. Also check for any complaints with the BBB or the licensing board.

Check references and never give them any money until all the documents are received and checked out.

Hiring a contractor is serious business and, at least in California, there are protections available to the consumer. It is the consumers' responsibility to learn about those protections and to make sure that you can use those protections to have your job run smoothly and result in a satisfactory result for both you and the contractor. Doing your due diligence when hiring a contractor is as important as when you buy the property. An uninsured worker that gets hurt on your property or a contractor digging up a gas line with a back hoe or disposing of toxic chemicals like paint or solvents into an environmentally sensitive area can result in a huge liability that can easily exceed the value of the property. This may sound like overkill, but in fixing up a property the contractor selected can be even more important than the property. A good contractor can fix almost anything on a bad house, but a bad contractor or a badly written contract can easily turn a good investment into a terrible one.