All Forum Posts by: Mike Wood

@Kyle Keller  Having owned both, I would not suggest tankless water heaters.  While they may save money, when they have problems, they are easily and cheaply fixed.  I have owned three (1 bosch electric and 2 Rheem gas), and all three failed, and were uneconomical to repair (PC board required replacement, which would have taken weeks for parts and exceeded to cost of a new unit). I have 13 tank water heaters currently, and they are very simple and parts to fix (assuming the tank does not rust out) can be found anywhere and replaced with simple tools.

Is it possible that you will have 10+ years of service from a tankless water heater without problems, sure, but I have not had such such luck.  Also, if you are paying someone to replace the water heater, switching to tankless will be alot of extra expense, as you need larger electrical wiring and circuits (if electric), larger gas lines and electric service (if gas), as well as all new connection plumbing.  A replacement tank unit should be an easy swap.

@Katy Hung  That to me is sufficient to me to confirm that they have vacated the property and have abandoned any remaining property.  I would get the stuff moved out and placed on the curb (anything of value will likely be picked up by locals, remaining will be picked up with the trash.  Get the unit cleaned and ready to market, move on and get it rented.

Personally, I would stop chasing them for any past rent, its over and if they dont want their property, you have no leverage.

I assume you have local management or help, if not, you need to get some.  

@Anjelica Smith  If you want multifamily, I would recommend continuing to search for multifamily.  I also disagree that there are no multifamily properties in New Orleans under $300k that don't need significant renovations.  My guess is that you're are just not looking in the right areas (Gentilly 70122, St. Claude 70117 for example), or you want too much of of house (there are alot of 2/1 duplexes in our area sub 300k). 

I also agree that if you can avoid it, don't use FHA financing. In our current real estate climate, if there is multiple offers, and FHA offer will not be likely considered seriously. Just too much risk that the FHA buyer will not close (due to required repairs, lack of cash, ect).

@Joshua Eugene  Congrats on the purchase. 

For others, getting $1400 for a 2 bedroom in 70122 is not very likely.  Having units in that area, 2 bedrooms are in the $900-$1100 range for a 2bed/1bath unit.  $1300-$1500 would be a 3bed/1-2bath unit.

@Bradley Garza I think your lender is giving you bad information, and would suggest talking with another lender. If you have the income to support the purchase, FHA does not care if rents cover the mortgage. But as you mentioned, they will limit the amount of rental income that can be used to support your debt to income ratio.

I doubt you are going to find any deals on a fourplex that meet your mentioned criteria, multifamily is just too hot right now. I also question why your lender thinks you would pay rent to yourself, its FHA, which requires you to owner occupy the property. Start looking of a new lender.

I also doubt that you will find new construction for less than existing houses, since you are using FHA, which would require the builder to completely fund the project and sell it to you once complete, you will most definitely be paying full retail price on the property.

@Michelle S. Did you pull all the necessary permits, and get all of your inspections completed?  Why does the city want to you to consult licensed contractors, is it because you did work without a permit and a licensed contractor is required to pull a permit?

Its very typical for cities to not release power until you have a certificate of occupancy and have all of your inspections completed and passed.  

You need to schedule your inspection with the city ASAP.  If the city inspector find anything that needs to be addressed, be nice to them and do what they want.  Arguing with them will only make it worse and cause even more delays.

If you did not pull permits and are required to pull permits (almost everywhere requires permits for renovations), then you need to setup a meeting with the permit department head to see what you need to do to get this house legal and approved. Hopefully the will not make you undo any work due to inspection, but that is a possibility.

You will never be able to sell it retail without power.  Any retail buyer will require utilities to be on, any no normal bank will approve a loan on a house without utilities.

I would expect this to take weeks, not days.  Could be even longer if you needed permits and did not have them.

@Alton Alexis I would recommend a rehab that does not require structural changes (i.e. no need to move walls, expand the footprint, etc).  With a bit of experience, then try to find a local bank that will be willing to work with you on the construction loan for a new construction project.  If you happened to us that same bank for past rehabs (get a construction loan for the purchase/rehab), that will make the transition easier for the bank.

@Alton Alexis  New construction projects require a lot of capital, generally 20-25% of total costs to finance to project.  Additionally, most banks will very weary of providing an investor construction loan if you don't have experience.  There is tons of risk with new construction, so if you don't have experience, its likely not a great place to start.

@Katy Hung  Have they confirmed that they have moved out in writing?  If so, there is no need for an eviction.  If they have not confirmed they moved out, your in trouble.  New Orleans is NOT doing evictions for none payment of rent until 2021, in line with the CDC guidance.  If they have confirmed in writing they moved out, I would have there stuff moved out to a self storage place ASAP and get the unit up for rent.  With the stuff in storage, I would give them 30-60 days to pay you for the moving expense and storage fee's in writing, then when they do not collect, its abandoned and trash.

As for NOLA evictions, you or someone representing you will need to go to court to file the eviction and to appear in court.  If you or a representative does not appear, the judge will rule against you.  Anyone can file and appear on your behalf, although a lawyer may be best to speed the process.  Before COVID, the eviction process was pretty smooth, but now I have no idea.

As for the missed rent, you would need to sue them after you get the eviction proceedings completed, or their property out of the unit.  This would likely be small claims court, and while you may get a judgement against them, its likely not worth it, as you would have to pay someone to do all the court stuff.  And the tenant does not have the money, so you would be relying on the co-signer.  I would just give it up and move on as quickly as possible.

@Stephen Keighery  I generally have not priced out individual prices like you have listed, but can provide some data for some of your items.

Replace plumbing (all drain and supply on raised, all supply and drains only above top of slab) - I use $700 per fixture as a general rule, not including replace of the main drain under slab houses.  A fixture would be a toilet, sink, tub/shower, waterheater, dishwasher, icemaker.

Complete rewire - $5/ft2, not include recessed cans or fixtures.

Dumpster - 30yard dumpster is $350/dumpster.  I generally use 4-6 dumpsters per gut renovation (>2000ft2) or new construction duplex (>2000ft2).

Window replacement ~ $300-350/window, simple vinyl window without the need for extensive exterior siding work, not including interior trim work.

Flooring - I would say laminate and LVP flooring install should be around $1.50-$2.00/ft2, material would be anywhere between $1/ft2 to $4/ft2 (anything less than $2/ft2 is crap).  Tile would increase the materials and labor.  Prefinished hardwood flooring would cost anywhere between $6 to $10/ft2, depending on material and complexity of the job.