All Forum Posts by: Joseph Walsh

Thanks, and that's a good thought on grouping the "bad comps" as to being ones that should be tossed ahead of time.  And yes, if it's worth less than I hope for, so be it. 

Jay

Hi all, I am looking to refinance a possibly under-water property.  I say possibly because the particular neighborhood has some pretty wild price swings on seemingly comparable houses (I mean swings of 100% ore more!).  Much had to do with a rash of established owner deaths, compounded by foreclosures piling on the "low" end, but more "normal" sales at the higher end the past year, most recent listing are right where I hope to be.  Is there any way to affect the appraisal process, or is this a "luck of the draw" type scenario.  Is it possible to seek out lenders known to be "generous", or would a broker be better?  Or, am I just gambling with the appraisal fee and hoping for the best?  My first step is going to be to ask my realtor....any other thoughts?  The refi is a veritable must.  Right now it's a loss property and just "fixing" the rate would be profit. 

I'l' be doing the obvious of making sure the house shows well.

Thanks, 

Jay

Don't sweat it.  Having a wife is why I still only have a single rental! She's still not on board with an expanding portfolio plan (a year in to the lobbying effort).  She's getting there, just not quite....:)

None of the duplexes in my area have central air.  Window units are the norm.  Multi-zone mini-splits might be a good option if you are looking to put in a long term, maintenance free (relative to window units in and out each winter/spring) and could conceivable add value, but they aren't cheap.  The window units are the responsibility of the tenants, so there's that.

I have a general rule for contractors.  If they suggest no permit, find another contractor.  Now, experienced ones might be pointing out old work that is clearly not to code, and will add cost/time to remedy, suggesting you could get by with it, but if you get a permit, it becomes "in scope".  Then again, do you want to live in a house with that....?  Have them estimate the cost if you are unable to get a variance.

Unless you are a construction professional, I would want an "expert" verifying the pros didn't make a mistake or willfully cut corners on work you paid for.  Inspectors are generally your friend and save you money long term.

How about:

-Offer to sell him the house/lease option it to him, possible at a favorable price (to you, since he seems to love this house)

-Get something in writing that allows him to continue his "hobby", but allows you to approve work actions AND clearly states you will not be reimbursing him or paying him in any circumstance for improves he does decide to implement on his own.   You can always make specific instances of payment for specific work products, again, each one should be in writing.  And make him pull permits where required, or at least use that to throttle work.  "I checked, that requires a permit and inspections, if you really want to do it, you'll need to follow that process...."  For example, my city actually requires a permit for a shed (and a bleeping concrete pad...)

Personally, I would try to work out the last option, he's a good tenant, is improving the property, not trashing it, and if you can get both control of work scope approvals, and free improvements, it could be a win-win.  

Sigh, I really dislike when government mandates the use of a very specific type of technology, rather than an requirement on the outcome.  So, rather than solar panels, a efficiency requirement, or a requirement on the amount of grid electricity per sq. foot.  What if you we happen to come up with a combination of other technologies and techniques that eliminate the same amount of electrical usage as the panels proved?  Oh well, law says you have to have them.  Guess instead of spray foam, a whole house fan, and automated windows, and all led fixtures,  I get solar panels and just add central air .... Then again, you get the government you deserve in this country.

Thanks @Bart H., I had completely forgot about the equity/appreciation play part of BRRRR. I had been looking at college rentals lately in an area that will have no appreciation, so I had blinders on. Even better. And to @Brian R. in his follow up, don't question the "did I pay too much" because they jumped at the deal. Your offer was the number you were comfortable with, and you got it. Based on the results, you can clearly trust your numbers. good luck!

Hey congrats.  That's  a lot of work for your first one. Knowing what you know now, is there anything you would/could of done differently that would of resulted in more monthly cash flow?  $130 a month is pretty slim.  Of course,  you are doubling that by self-management, but the point of the question is "what would you do differently for more profit" knowing what you know now?  still, nice work.