All Forum Posts by: Marc Izquierdo

Hi everyone,

I had tenants move in to a unit of mine about 3 months ago.  I inspect all of my units in September and March and during this September inspection, they told me (and showed me) some minor damage they caused from moving in.  It is just two paint scrapes (no spackle required). 

I know about it and have documented it, but do I make them fix it now?  My logic is that they have to live with it until they move out if they don't want to get it fixed now.  From their perspective I understand not wanting to pay to have it repaired if they're ok living with it.  In a perfect world, if they move out and it's still like that, it'll come out of their security deposit.  However, I also understand that I shouldn't let little stuff like this pile up.  So do I require that it gets fixed ASAP (my contractor and bill them back for it) or do I let it go for a few months until maybe a bunch of small things pile up and I can take care of them all in one shot.  In other words, if they're not complaining about it, should I fix it?

@Maricruz Romero

Check out the app/website 'Thumbtack'.  I have found a variety of good contractors on their phone app.  There are a bunch of different contractors on there with lots of reviews.  I've never looked for a GC on there but I've been able to find a subs.  It's worth a look.

I feel like contractors are a different breed.  Unlike a lender or a broker, personally I don't feel like they are the type to sit down at starbucks and have a conversation with you about what you're working on or plan on working on.  With contractors, I feel like it's difficult to establish communication without having a job ready for them.  A lot of them are busy self employed people, running all over from job to job, fielding calls, etc so I believe they can't really afford to just chat about a hypothetical job which is unfortunate.  So referrals are the best way to go in order to feel out a contractor.  I know it sounds harsh but I try not to waste their time if I can avoid it as much as possible. 

Once you find a few contractors that were referred to you by other investors, have them come and look at your project during a walk through or an inspection while you have it under contract.  Get each price from each contractor as well as their anticipated timeline and make your decision from there about who to go with.

 

@Brianne Leichliter

I like that @Mike McCarthy brought up mini splits.  I have a duplex that had one boiler servicing both units.  I cut and capped the supplies to the one unit and removed the radiators.  I had mini splits installed and now the duplex has split heat and that unit now has cooling.  Like Mike had mentioned, it isn't cheap.  I spent 7k for an outdoor unit and two indoor units but the cooling in my market is very valuable to renters.  It's worth considering.

@Account Closed

@Ramon Flores makes a good point. In order to make the numbers work with using BRRR you'll need to force the appreciation pretty significantly whether that's through being able to negotiate a great price on a property in good shape or through doing repairs. So using conventional may not get you where you need to be but the possibility still exists.

Since you're also looking to finance rehab costs, hard money also has the capability to finance all or some of your rehab costs.  You're going to pay more for hard money but that's the price you pay for not putting much of your own money into the deal.  Good luck!

@Account Closed You can also look for  someone to partner up with who has money for a down payment but doesn’t have the time or knowledge about investing.  Like they say, 50% of a deal is better than 100% of no deal.

Lease options were mentioned. This is a great strategy for getting into a property with little money.  You can actually tie up the property so that you can buy it in X amount of years while you save up that 20% and you can get cash flow from the property while waiting!

@Shiloh Lundahl thanks that’s good to know.  I guess since the property is already leased out, they wouldn’t really need another lease.  Just wanted to see what to expect.  I appreciate the input.

Great info in this thread!  Does anyone know the technicalities of setting up a LO with a seller that has tenants currently in place?  How do you navigate the lease that is between the seller and their existing tenant?  I would assume that lease still holds water but the lease isn’t between you and the current renter which makes it a bit weird.  Is this even possible?

Eh that is tough.  If you really can't find anyone to do it for 3 months, and you can do the work yourself, that might be how it has to get done.  Both my girlfriend and I work full time jobs and don't get home until 6 pm but have managed two renovate two duplexes on our own after work and weekends.  It just depends whats more painful, having a house sit vacant for two months or working after work?!?  Good luck!

@Conn G.

Since you're not dealing with a bank, like you said, everything is negotiable.  So you can even play around with the price.  It may even be worth offering more than what they're asking for the property but controlling the interest rate and other terms that benefit you.

A con to this would be if you pay more for the property and work out an extremely low interest rate with the seller, but plan on refinancing in the short term, your negotiated interest rate goes away and now you're subject to a bank's terms but still stuck with whatever debt you had on the seller financing deal. This could change a great cash flowing property to a dud. Not to mention, you may not even be able to refinance depending on how much you paid due to a bank's LTV requirements and their appraisal.

However, I like the idea of trading price for terms if you can get a long term loan from the seller, maybe 15-20+

I've inquired about the same thing. I have my business accounts set up at a small local credit union and they will do a HELOC up to 80% (total debt) LTV.