All Forum Posts by: Joseph Walsh

It's not necessarily a "mistake", unless you have been in the trades, or a long time home owner, "doing it yourself" the first time (or few times) has the education benefit of learning what you don't know.  Plus, on the first few, you just might not have the upfront cash to "hire it out"

For example, I do my own electrical in my personal residence, and from that, I NOW it doesn't "cost" a lot in materials for electrical work (aside from some specialty breakers, GFCI's, etc.), but the labor is more intensive than you might think, so that $3500 bid is not unreasonable, unless it has $2k+ in materials....I also know I am not going to do the electrical in my REI due to the time/effort involved even though I could save $2.5K on that $3500 bid...it's not worth the week It'll take me, plus the "permitting lag" that happens if you aren't a local tradie, which sets back pretty much everything else, drywallers, flooring, cabinetry, paint...etc. Same with Drywall, I know what good drywalling takes from having done my own, and choose to hang it myself, but hire professionals to mud and tape and do the skim coat. Painting...depends, etc. You find these out from doing.

But congrats!  I don't do flips but maybe I should look at them :D  +30k in 3.5 months....nice.

Jay

while I am not a large scale RE owner, I skipped the LLC/etc. and just upped my umbrella liability insurance, and made sure my agent was aware than I had rental properties and those should be included under the umbrella (and the addresses are noted in the policy). I think it's like $70 a year for like $5M in umbrella insurance. I'm sure there is a point where your assets are worth enough to move to some sort of entity structure for liability purposes, at which point you should talk to a qualified attorney, but I don't intend to ever get there. Once I hit $10k a month, I'm retiring.

Learned a lot from this thread.  I know a few individuals that would consider being private lenders, but need to be educated on what to do to protect themselves.  Knowing now I can go to them and not only talk numbers, but also say, "You'll be first lien on the property, but that's not enough, sure you can foreclose on me if things go badly and take ownership, etc., but you also should get A "Lender's Title Insurance Policy. Lender’s title insurance protects you as the lender against problems with the title to your property-such as someone with a legal claim against the home"  (Thanks @Don Scott for the quote) And I encourage you to have a qualified attorney review everything.  We'll include those costs in my fees, you shouldn't have to pay that just to lend me money.  My goal here is to make sure you are well protected in the off chance something goes south.  I'll also be returning you 10% (or whatever) interest every month, and of course 100% of the principal once I refinance or sell the property.  You get good returns, and protection with a real asset.  Instead of just "you'll get 10% interest every month, and when I sell/refinance, I pay back your investment in whole"  Especially since I am looking to try and do a few small deals over the next year or two to build the, as Don put it, investment relationships as I look toward scaling up.  Also good information for seller financed properties, one i am looking at here now (potentially)

 

I'd let the PM company deal with it.  Maybe let your taker cuz (sucks when family are "takers", I know), AND family know, "well, he blew it.  I tried to help him out by GIFTING him $1k on the way out to set up a deposit for him on a new place, instead you tried to extort me.  now you get nothing, deal with the PM company."  Also, I'd let the PM company know, since they blew it, and eviction costs are on them.

I'm Demoing and rebuilding my kitchen, took out some walls, re-wiring and plumbing.  The tools I use the most lately:

Hand tools:

tape measure (get 3, you'll set them down all the time), Hammer (one claw, one framing), pry bars, lineman pliers, screw drivers (OMG are there still flatheads everywhere!), pocket knife, utility knife(s), safety glasses/googles (for dust), dust masks, knee pads, adjustable wrench

Power tools:

Shopvac, Sawzall with various blades, impact driver, drill,multi-tool, circular saw, miter saw.

Now, if I were getting my minimal starter set, it would be a claw hammer, and impact driver, a drill, adjustable wrench, lineman pliers, screwdrivers, shopvac, 2 tape measures, pry bars, utility/pocket knives, googles/masks, and circular saw.  In that order.  then by the rest as needed.

Of course, I have escrow set up with my PM to handly "handy man" tasks normally so....that's an option.

The OP posted that after mortgage and HOA he was +900/ month. I also assume that said mortgage includes prop taxes and insurance (which may be an invalid assumption) actually what he states was "all in" all his expenses add up to $2100 a month, and it rents for $3k. and assuming the HOA takes care of a large portion of the maintenance fees. and it's not vacant, so he could stash that $900 a month for a year and bank $10k+ into a maintenance fund. subtracting 1 month vacancy contingency at $250 a month, he's still $650/month positive. lets put half of that away on top of the 1 year reserve for unexpected costs, , and he's still at $325. anyway, like I said, for an "accidental" landlord situation, it works out. but yes, as an investement property, he over paid, as many have noted.

I bet they don't have a kennel license.  Most places require one for more than 3 dogs.  And yes, I'd be worried.  I'd honestly consider calling animal control on them and complain about the number of dogs, and ask, "wouldn't then need a kennel license for something like that?"  Pit bulls are an aggressive breed, and "pack up" easily  (hell, it's what they were bred for) and this owner, sadly, doesn't seem equipped to handle an aggressive breed.  It's really just a matter of time before 2-3 of them get out and maul a kid, which is a shame, it's "owners" like this that perpetuate the breed as the problem.  I'd at least make sure your liability insurance is up to date.  but otherwise, sounds like the property should be highly rentable.  you might lose some potentials due to the crappy neighbor, but others will be an option.  I'd expect higher turnover anyway due to the "c" neighborhood as you mention.

But based on your account, you were not chronically late.  This tenant sounds like they are.  My example not only were they chronically late, but I had already forgiven 3 months worth of rent over the 4 years because of various sob stories, while true, didn't prevent him from having top of the line cable, and a new car.  and I had already assumed I was going to eat the several hundred $ of the water bill he never paid.  So yes, the occasional late payment.  However, I bet had you got the 5 day notice and $25 fee associated with it, you would of realized you forgot to mail the rent, and he wouldn't of had to drive over 3 weeks later.  You likely would of found it, AND called to let him know.   You didn't need training on being a good tenant, because you were one.

I don't see how this negates the purchase of the house.  Sure, it would be great if they could get in sooner, but will they be able to close on ANOTHER property in less than 28 days?  Seems like they need to give the seller the 45 days, and figure it out for a month.  TRY to work something out with the landlord, or find a 1 month rental, storage plus crash with friends, whatever.  Maybe as an agent you have a client with a vacant  home they would be willing to rent out for a month or two?  They get free "staging" of the house, and it's not vacant....there are options.

Sounds to me like the insulation was installed incorrectly, and the pipes are outside the insulation, or there is no vapor/air movement barrier.  Heat tape inside the walls would be likely be a no-go, it's a fire hazard in most cases since the heat tape is not Insulation Contact rated, as it's intended to be used in spaces open to air and are underheated but inside the heat envelope (basements, crawlspaces, etc.)  (unless you can find some IC rated, I haven't looked) The "correct" answer is to open up the walls and fix the insulation issues.  An easier option might be to cut the copper and run new plumbing via interior walls and/or floor cavities, probably pex.  Either way some drywall is getting cut.  good luck