All Forum Posts by: Lorenzo Wright

Sounds to me a pretty clear case of the contractor didn't account for the cost of architectural plans and tried to wrap the costs into permit costs based off of the need for the plans to acquire the permit.

@Douglas White

Check out this document from PG County.

http://mde.state.md.us/programs/LAND/Documents/LeadPamphlets/LeadPamphletLandlordTenant.pdf&ved=2ahUKEwjq5aznqabsAhWRpXIEHRmpAbIQFjABegQIBhAB&usg=AOvVaw0pJtgUPN2xA-Vnf_oTrt2d

Every county in which I have a home has one of these and I review them with all new leases and lease agreements.

There's a lot of information in the additional links, but you'll need it all.

Good luck!!!

@Wade B.

Sounds like the world is your real estate investing oyster!!

If I was in your shoes right now I'd be looking into going into my next house hack.

Whether that's another duplex, SFH, or a quad. Your w-2 on top of your rental income should set you up pretty nicely for the dtr. If you do the hack, financing is a no brainer and rates are ridiculously awesome for primary residences right now.

My recent experience has been that banks are a little skiddish on rental lending. Whatever you do good luck man!!

$75 = 1.5 hours @ $50/hour (pretty common for a plumber)

$46 = 80 miles travel (20 miles each way x 2) x $.58 the current govt rate

$100 = two hours of drive time that employer is going to have to pay employee

$27 = 175 x .153 = employer portion of fica, Medicare, unemployment etc

$50 = misc. Overhead = insurance, licensing, office

$50 profit and $52 slack total = $400.

Is $400 a little steep, maybe. Is it totally ridiculous, nope. Everyone loves to bash on contractors, but have zero clues into what it actually takes to run a contracting co.

P.s. it doesn't take a plumber to install a dishwasher. Do you pay your dentist to clean your teeth?

@Nathan G.

I definitely agree on the point of inspecting properties at a minimum of once a year.

I do have a question for you, had your agent inspected it and found it in that state, how would you have handled it? Refuse lease renewal? Verbal warning that they are going to lose deposit? Or just a reminder of the lease terms?

Carpet, cleaning, paint and two $50 doors from HD...??? Light bulbs???...For reals...The worst thing was a cut in a crappy counter top. Looking at what, $2,000 maybe $3,000 of work after three years. In a property that hadn't been tenant proofed that's right on par with what I would expect.

This may not be the best strategy for someone with a 10+ property portfolio, but for someone starting out the live-in flip is a great way to begin a real estate investing journey.

1. 1 With only 3.5% down required for an FHA loan, the cost of entry for someone starting out is reduced. Let alone other zero down programs like VA.
2. 2. While you live in the home you can make improvements as time and budget allow, and it’s a great time to start flexing DIY muscles to cut even more costs.
3. 3. In a bear market (who knows how much of a bear this is going to be) it is much easier to weather the storm and hold onto a house that is your primary.
4. 4. The exit strategies…this is where I think the live-in flip really shines.
   1. Traditional flippers are usually taxed on the income from a flip at their current tax bracket….If you have lived in the home for 2 of the last 5 years however, and you sell, you pay no taxes on the gains (with some limitations).
   2. You can convert the home to a rental. Now I’m not talking accidental land lording, but a very intentional move. Prior to buying a house analyzing the rental market and ensuring that the true cashflow (rents – ALL expenses) meets your criteria. This is my preferred strategy. Interest rates on primary residences are typically lower than investment properties….and that rate doesn’t change once you convert it to a rental.
   3. The "extended" BRRRR. If you purchased a home with a VA or FHA even with the value added from the live in flip you may not be able to do a cash out refi due to most banks wanting 75 to 80 LTV. However, if you let that property sit for a couple more years, then the debt paydown on top of the value-add form the live-in flip will usually net you a chunk of change.

One last thing, for this to work you still must buy well. If you over pay for the property then it’s not going to get you much. This is a very forgiving strategy and one that I think new investors should really consider.

Tell me what you guys think!!! What are your plans for the big bad bear market?

@Sean McCluskey

Without being able to see more, this is a little bit of a tough one. What I think is happening is you have the split level basement foundation adjacent to the porch slab. These two are going to settle in very different ways, putting stress on that hideous stone. If there are no signs of foundation issues on the inside it makes me worry a little less, but still something to keep an eye on. Also, I'm not an engineer.

Good luck!!

From a contractors perspective this thread really makes me laugh.

All REIs love to complain about how difficult it is to find a competent GC, but then throw down all these absolutely ridiculous contingencies that they want GCs to follow.

A competent GC is going to have a contract with reasonable terms that they have for you to sign. If you have to present a contract to them...guess what...they suck as a "contractor". By definition they should have good contract.