All Forum Posts by: Jen R.

This is normal in my experience. My dad was an appraiser for 30 years, and he always said that the truest indicator of value is what someone is willing to pay...

@Tom Mickley I’m in Tallmadge, so not too far from you. Our local accountant is great and a real estate investor herself, so she’s up to date on all the current laws. If you’d like her contact info, shoot me a message!

It depends on your lease, and how long they’ve been there. Our lease has a statement prohibiting drilling holes in walls, so I would charge for anything larger than nail holes (unless the tenant had our permission). I allow tenants to put in nails for pictures, but other landlords do not. Carpet stain depends on severity and the age of the carpet. If the carpet is beyond its useful life, no, you can’t charge them for it.

Sounds like you have a pretty quick turnover; again, if they were good tenants and had been there awhile, and left the house clean (that’s a big one for me) I am likely to return the full deposit if there are only minor repairs. Often not worth getting into a dispute over.

@Phillip S. it often costs more to get started (in any ways), then yes, you develop efficiencies as you gain experience and assets. Yes, you will have a disadvantage compared to someone who can offer all cash, no contingencies, and close in less than a week. That is what my typical offer looks like today, but when I first started I needed financing contingencies and inspection contingencies as well. Contractors are typically going to charge you more than an investor they've already developed a working relationship with. It takes time to build those relationships and find the contractors who do quality work at a reasonable price. Yet another reason to get out and start networking. When you don't have experience or a ton of cash, relationships need to be your biggest asset. Join your local REIA and attend regularly. At least twice a year, our REIA does a rehab walk, where a few of the experienced investors will take a group through a few properties and teach them how to estimate costs. Look for BiggerPockets and other RE meet ups. Find investors who would be willing to let you pick their brains over lunch. If you have any kind of construction skills, offer your own time and labor in exchange for following along with someone else's project. Read as much as you can. Drive around looking for distressed properties that are off the market and contact owners.

In any case, those are just some of the things that I did when starting out.

I’m actually a New Englander who married into an Ohio family, and have been here ever since. Learning to love the Midwest a bit more each year ;-)

Much of it depends on how long they lived in the home, but we usually spend less than $1k on a turnover. We don’t have carpets in any of our rentals, so just have to wash floors. We do pay for a professional cleaning, though most tenants leave the property relatively clean already. Sometimes there is some minor drywall patching, and eventually rooms need to be repainted, especially if there were kids there for several years. Landscaping typically needs a bit of work. Some light bulbs replaced. Those are the “normal” costs, though occasionally you will still have a tenant cause extra damage.

@Phillip S. if you can’t afford to walk away from a deposit, make sure you include an inspection contingency. Also, $5k is a huge deposit; what is the price of the properties you’re looking at?

Also, as others here have said, this is just one of the difficulties of getting in the game. Honestly, if you are expecting a contractor to come out and give you a bid before you’ve even made an offer, you need to be paying for their time. Contractors are busy. Many contractors won’t even want to come out until you own the house outright, so start networking now to find someone willing to come give you an estimate while you’re under contract. Also, it could help to tell them you’re not looking for a full quote (that takes a TON of their time), but are just looking for an estimate on the work needed.

Also network with other local investors. In my experience, many RE investors really love what they do, and unlike contractors, ARE willing to donate their time (well, in my case, I’ll work for a quality cup of coffee) to help out newbies. My husband and I have walked properties with many a new investor to help them with rehab cost estimates, and also refer our contractor contacts that we’ve developed. 

In short, find a way to make it happen. 

There was recently a huge thread on this topic you might want to check out:

https://www.biggerpockets.com/forums/12/topics/694335-any-book-suggestions

Started in 2005 with $20k; bought live-in flip with down payment of $10k and spent the next 3 years fixing it up...and eventually lost our entire investment as we had to sell during the crash. Ended up cutting our losses and moving on to a second live-in flip that turned out to be much more profitable. If at first you don’t succeed...

So, when I read this post I was shocked that you were building such an expensive home in Johnstown...eventually realized I was thinking it was Johnsville...big difference!

In any case, would love to follow along; will you be posting updates throughout the process?

I’ll share a fun story about the one time a tenant tried to take us to small claims court (over a security deposit of course). We told her we would have to withhold a portion to repair significant drywall damage (that she admitted to causing). I’m guessing she thought it was going to be an expensive repair, and somehow got this crazy idea that if she didn’t accept the certified mail we sent with her deposit, she could claim that she never received it and go after us for 5x the total deposit (max allowable in Ohio is 2x deposit). She literally filed the suit on the same day that the post office returned the certified mail as unclaimed.

In any case, all it took was a single call from our lawyer telling her he was filing a countersuit for a frivolous lawsuit and going after her for all his legal fees, that she decided to drop the suit. A couple of ironies: the fee she paid to file the suit was almost as much as the money we withheld for damages (a couple hundred $$), and she requested that the court dismiss with prejudice (I guess thinking that the term made us look bad), but which actually meant she couldn’t go after us for the deposit again. 

Since we waited to re-send the deposit until the case was dismissed, our lawyer informed us that, technically, we could simply not return any of her deposit (which was still almost $1k) and there would be nothing she could do about it, having effectively tied her own hands in the matter. We seriously considered it...