All Forum Posts by: Brant Richardson

Well done.  Nicely updated without going over the top and breaking the bank.  Amazing what a difference just pulling down curtains or vertical blinds can make. 

I just pulled a carpet and laid a floor in my daughters room yesterday, legs and back are sore as heck today.  I feel your pain doing that whole house.

I do anything plumbing related except the sewer.  The biggest job was converting part of the downstairs of a house into a separate unit.  This involved moving the hot water heater out doors from what became the kitchen, which involved moving inlet pipes, outlet pipes and gas.  The same room needed further movement of gas pipes for the stove and placement of hot and cold pipes for the sink.  PEX is awesome stuff for getting around corners and retrofitting through studs.  On that project I actually did have to replace part of the sewer too, the old iron pipes had disintegrated but that was the only exception to my staying out of the sewer rule.

I've never heard of two inline water heaters but I don't see any reason why it wouldn't work if you have a spare one to use.  I put a 75 gallon heater in my project but in retrospect it was not necessary, I just have a single tenant in each of the two units.  

If I was coming with the money I would expect a lot of hustle on your part, as in you would be running a short term rental vacation property.  Done right there is a whole lot more monthly income for us to divide. 

Read this post by a North Carolina STR investor, it will give you an idea.

https://www.biggerpockets.com/forums/311/topics/700529-im-selling-my-long-term-rentals-and-buying-beach-property

The disadvantage with buying truly rent ready properties is that it is harder to get a bargain on them.  They appeal to everybody so the seller doesn't have to come down as far on price.  A lot less people want to deal with a property that needs rehab and the rehab is not financed so there is a lot less competition among buyers so the sellers are more likely to come down on the price.  If you want immediate equity it is harder to do on a rent ready purchase.  

"I'm going to wait for this current lease to be up and then raise the rent to break even or hopefully make a profit on it soon...I will list it on zillow and see how much more I can get."  That's negative $2269 per month of vacancy while you test those waters.

"Hopefully, after the next year I can make a monthly profit on it and will hold onto it for the next couple years until I can sell it for a guaranteed profit."  Hoping for appreciation is certainly not a guaranteed profit.  

I am in basically the exact same situation as you with my moms house which I manage for her.  She bought it to live in, her health took a nose dive so she is in an assisted living facility now.  I am trying to stop the money hemorrhage by renting it out but it is still cash flow negative, coincidentally at $400/mo.  She has the reserves to take the loss while hoping for appreciation but it is definitely a gamble not a guarantee.

Wow, you move quick.

Is this a flip or buy and hold?  If it's a buy and hold, how much will it rent for after rehab?

We have been discussing a property that a member was going to get for purchase + rehab 92k, ARV 130k and rent for 995/mo. Numbers not too different from yours. Consensus was that it was better for a flip. Check it out.

https://www.biggerpockets.com/forums/12/topics/742026-would-you-brrrr-for-78-mo-cash-flow

@Kalanie Tran  Check out Padmapper.com, it puts all the craigslist ads on a map so you can quickly see the relevant ones.

The rating scale is not formal, it would not be on an assessment, it's just based on your feeling when you know an area well.  The guys that work for your husband probably live in the low B, and C areas.  Drug addicts and gangs are in the D's.

$150/mo adds up to $1,800 per year.  Compare that to $100k in a 2.25% savings account which adds up to $2250 per year, plus what ever your purchase price + rehab was in the savings account at 2%.  Of course there are tax write offs and principal pay down with real estate but most likely this one is better to flip, especially if you think there are more opportunities around.

You get to shop and he gets to work construction.  That does sound fun.  Haha, just poking fun at you.

Where does this house fall in the spectrum of inventory in your market? If this is in a "A" neighborhood you would probably be better off selling it and rolling that profit into a low "B" or "C" neighborhood where ROI will be higher. If you are already in a "C" neighborhood then you probably aren't going to do much better in your market. If so and you want to build a portfolio then you shouldn't finance so much out of it, just enough to regain most of your initial investment, to try to get if cash flowing a little better. A few years down the road rent will probably go up and it will cash flow better yet.

Maybe this post is what got you thinking about this, but if not it is definitely worth reading. It starts off as a discussion about selling rental properties before they need major CAPEX but toward the end moves into exiting as the ROI gets worse when appreciation exceeds rental increases.

https://www.biggerpockets.com/forums/52/topics/741442-are-sfhs-worth-keeping-more-than-a-few-years?page=4#p4366902

I am currently invested in Kansas City where you can definitely do better than $150/mo cash flow with $250k invested.  You could have a couple properties free and clear pulling in way more.  I have recently become interested in investing close to home where I can do the repairs and PM myself.  The only way to get the ROI high enough is by doing short term rentals.  Do you think your place is a candidate for that?