All Forum Posts by: Luke M.

A lot of my properties are older properties, and a lot in my market are older. I have found newspapers from the late 1800s to the early 1900s, plus ~1950s paper under the flooring. We've done a lot of electrical and plumbing work and run into plaster walls quite often.

Are you just starting out or do you have a network built already ("inspector", contractors, roofers, drywall finishers, etc)? I can make an old house profitable but that's because labor is inexpensive in this market, and government regulations are practically non-existent (though we go above "code" whenever possible and do make things safe).

We took $300-400 worth of copper (scrap value) out of one duplex and replaced the plumbing with PEX and PVC because of holes and splits in the copper. I'm talking 3-4" drains of copper as well as the supply lines. We also nearly re-wired that property and completely re-wired the next one as well as replaced the copper with PEX. If you budget for the work involved, it can be profitable, but it depends on who you have working for you and how much you pay them, of course.

There are definitely potential pitfalls in older properties, but there is also money to be made through them.

Yep... I usually call at least one reference but always call the current landlord and verify through the county auditor's website or some other means. I also have the applicant sign the application which states that lying is an automatic disqualifier, and the application fee will be retained for the work put into verifying the application. Adding the application fee cut down on people automatically disqualified (evictions, meth, etc) but surprisingly some people are still more than willing to lie to my face and on the signed application. I'd rather they didn't, I want rent, not application fees, but I also don't want to waste my time on people who won't make the cut.

But be cautious, sometimes I would think a landlord would want to get rid of a bad tenant and give a good reference.

I'd buy houses for $35k that rent for $700 turn-key all day if I could in my market... tax write-offs or not. I have found a few turn-key that fit the 2% rule, although often our rehabs go a little above that depending on what we find wrong with the house once we start tearing things up like old flooring and plumbing... but we tend to fix things right the first time and put out a little more money to protect our investment rather than just painting and renting like some people do here. I guess that's why we get higher rents.

There could be other benefits, though... You need tools to work on properties, you need a trailer to store tools and supplies in... of course if you just pay someone to manage it some of the "benefits" might go away, and it probably depends on what type of company you set up.

Like others said, I'd talk to a good CPA first.

I either contract it out or do it myself with my contractors, rolling and using a brush. I've considered spraying but haven't done it yet for ~10 or so properties. We paint before installing flooring. I buy whatever mis-tints I can at Sherwin Williams, and the people there know me by name now, lol. (Small town, but still, I like dealing with people directly and sometimes they throw me some good deals or advice.) Get a contractor's account and you will get discounts on paint and supplies.

I wouldn't spend money on a sprayer if I was just getting started, but if you are comfortable with one and plan on getting multiple properties, it might be a good investment. I invested in a Popcorn Sprayer for ceilings, but we have only used it a few times, and it can be messy. On complete rehabs I just have the drywall finisher do the ceilings, then I paint with Builder's Craft from Sherwin Williams (same stuff I use for primer elsewhere).

I will have to look into Intuit Payment Network when I expand, but right now (9 or 10 rentals), I have them go to the bank and deposit it. Several still give or mail me a check, but a lot of them just go to the bank for me. I transfer the money to a different account when I get around to it, and I keep all of the rents at different amounts (including considering if they have to add a late fee).
I learned this here on BP last year, and it has worked well for me so far... except when tenants don't pay the full amount. But, I do tell them to keep the receipt from the bank as proof of payment.

Eventually, I'm sure I'll have to go a different route like IPN, but I see this working for at least the next few years unless we expand greatly.

Nope. Tenants are responsible for lawn care, and some of them just do the minimum while others go above and beyond. Of course my rentals are in an area where it is not a problem. I do occasionally mow a lawn or two for tenants if I'm in the area taking care of vacant properties. It takes about 5 minutes with the zero turn 72" mower lol.

Laminate flooring (maybe what you call "vinyl plank" or do you mean the stuff that is more tile-sized? I haven't used that before), Vinyl (depending on the dimensions - use loose lay not the kind you have to glue), or refinish the hardwood but it sounds like you don't want to do that right now. At least that's what I'd use.

Hey, Joshua and others finally convinced me to say hi and introduce myself through our conversations on Google+ (btw check it out, there's a separate BP "group" I guess you'd say).

I'm in my 30s, BS and MBA degrees, worked for the man for a while and all the while wanted to get out on my own. I've researched real estate for at least the past 10 years, had co workers who rented properties and was always interested in what they did, and even rented part of my house out once I graduated and bought my own house. (Unfortunately, I had to sell it and break even recently, but there were other reasons than investing that led me to do it. I have to say, depreciation is a wonderful thing, but I think I'll still have a loss this year due to the buy and sell price.)

I remember when I was first talking with my current business partner about investing in real estate, I was reading BP every night. Once we got started, I happened to be reading it when my first "big" problem with a tenant happened. I received a call about midnight and thankfully I was close by, so I drove over and shut off the water... we got the water heater (why do people call it a "hot water" heater?) line fixed the next day, but I'm glad they were good tenants because water is a killer in a double wide.

Anyways, I live on a farm, and I do farm work when I'm not working on rental properties. (Soybeans this year.) I live in southern Ohio and invest in rental properties in more rural counties using the 2% rule I learned here (or at least I try to). My partner and I started late in 2011 and wanted to get 10 properties by the end of 2012. Well, we did, although we are still fixing a few of them up, sold one at a loss (live and learn), and sold one on a land contract.

We are not slumlords, and I despise people who are. Eventually I'll post a few of my photos. I'd live in any of my rentals if they were on 100 acres and not within city income taxes lol... but seriously, I'd live in any of them.

Looking forward to learning more here and helping out where I can! If you want more info, reply or send me a message! (But not one that I can't refuse.) LOL did I mention sarcasm is one of my traits?