All Forum Posts by: Mary Jay

As @James Hamling said need to cut out the middle men. I also cut out the material markup. I think normal contractor mark up materials 30%?

I use cheap contractors/laborers here in Chicago. For example I can gut a basic bathroom paying $3800 labor and I buy materials. Paying a “market rate contractor” would be looking at a 12-15k+ job. It can be hard to really make any money if paying market rate as the cost of repairs will often be over the amount of value they even add in many cases. I just did a roof for $6000 labor + I bought materials, again would be $15k range if called someone reputable off Google. It’s not easy to find good cheap people and took lots of trial and error. I don’t even give out the contacts other than to clients who actually closed a deal with me. I would say hardest part of rentals is finding contractors. I got burned by someone on BP before too who was licensed but still raised price significantly mid project and started trying to bill for every little extra thing he could think of. Best start small project to test people out, see if they perform as said or not. 

1)  I have a broker and I call them to ask for new quotes.  

2) I saved 50% - over $2,250 for the year - on my personal home last year by doing this. I have saved hundreds on my STR rentals. Not every year, but I can usually get a policy for less than the current carrier wants to increase my premium to, so I consider mitigating the increase a WIN.

Here in MN the "average" cost for doing an 'average" asphalt pitched roof is about $22k. 

If I go to the supply house, where I am allowed to purchase given my GC license, and I order all the materials. And if I call up the BIG roofing subcontractor that 9/10 in the market use and I schedule them out to do the install. 

Now like magic that $22k roofing job turned into $12k-$14k. 

Real #'s. 

So the answer is by doing some work in being your own GC & Project Manager. 

It's not for everyone because you gotta be capable of correctly ordering materials and running a jobsite, but it's far from rocket science. 

And note in this I do NOT skimp on material quality. It's not only the exact same materials BUT I do some upgraded things vs what the standard GC does. 

I believe that if you only build to code, congratulations you just got a D-, because that's what code is, the bare minimum acceptable. 

I build to do what BEST and smartest. So I do better improved synthetic felt. I go double in ice & water, run all valleys with I&W, check my attic ventilation and add to assure correct airflow and most often shift to ridge vent. 

I am cutting out 2or3 middle-men; a sales rep, a GC, maybe a sub-GC because yes there can be layers of GC's depending on who your hiring. I have seen "roofing contractors" who sub work to a guy who subs work to a guy who subs work to the actual install crew. That's a lot of layers of markup on labor. 

I rather just go straight to the main labor sub who has dedicated installers. 

When I lived in TX, no one ever inspected my homes.  I live in FL now, and it is the norm for a new insurance company to check/inspect.  Kin.com had me take my own photos and upload them to their app.  Other companies have come in person to do it.

Every year, I get new 4-point inspections on ALL of my properties and send to my agent to re-shop my insurance rates.  This has never NOT paid off for me.  (Most people do not know that FL 4-points are only good for one year, so get them every 12 months for sure.).  You do not just have to roll over and take it from the insurance companies.  They will ALL try to up your rates, but you can usually mitigate the amount of the increase with a new 4-point and a call to your agent.

If my carrier changes because my agent found a better deal, they typically want to come inspect.  Sometimes they want me to fix something (like cracks in a driveway that no other company had cared about previously).  Mostly they do not.

If you changed carriers, I would expect a new inspection.  Is it possible that you changed some carriers but not others?

I fill out a spreadsheet w/ the bigger ticket items - roof, siding, AC (this one has a mini split), hot water heater, flooring. Smaller items like fixtures, countertops, cabinets I don't worry about as much. This is a small property so the smaller items don't amount to too much. 

For this particular duplex - upstairs flooring will come up - looking around $1500 for LVP installed. Roof would be around $5000. Brand new mini split AC installed around $1000. Siding is the big ticket item here. Hot water heaters are tankless and new. Fixtures are new. Countertops are ok - would do a butcher block here - looking around $500 installed (can be sanded, refinished, sealed, epoxied over etc). Plumbing is all brand new. In $2024 I spent $56 on repairs/maintenance between both units. I have this in a spreadsheet and generally divide by how long I think that particular item will last to come up with a monthly cost. 

Insurance costs I think were predicted reasonably. No one (ask the people who had to move out of their home due to insurance costs) is predicting insurance costs doubling, tripling in 2-3 years. This duplex is still cashflowing after absorbing the increased insurance costs. In fact it still almost hits the 1% rule. Do you typically take your insurance estimate, then multiply it by 3, and use that as an expense? I doubt anyone does because that wouldn't make sense. 

I don't see how rent point has to do with absorbing high insurance costs. If your rent is $3000 and your expenses are $2900, you still can't absorb a high insurance increase. It really has to do with the spread between rent (income) and expenses. Insurance on a 1mm property will also go up a lot more than a 100k property. 

I'd actually like to hear your methodology on buying. I understand you have a lot more experience than me (and experience is often the best teacher) but I still think I have done some things right with this property and I think it works out long term. This was my first property, I've owned it for about 3.5 years, and "started" in RE about 4 years ago (all stock market investing prior). I can take a step back for a minute though. A lot of the social media "guru" stuff has gotten me to be an extremely quick skeptic here lately. So I can admit that and that I am very far from being an expert. 

I live solely off my rental income so it's definitely not a myth ;)

 1. Very likely no (how do you think this would benefit him?)

2. The insurance companies might require this.  Is it a problem?

3. Did Citizens send a letter to this effect?  I'm not an expert on Florida insurance but I know Citizens which is state-backed and grew too large is depopulating policies.  They wouldn't just "change" policies without written notification.

You mention a key point at the end.  You can't compare owner occupied to tenant occupied.  Totally different policies and procedures.

Sounds like you don't trust your agent though.  Why do you use him if that's the case?  Have you asked him these questions?  Have you asked your other agent?

As an aside, insurance companies are inspecting most properties one way or another in the current market.  They may have even inspected your primary home without you knowing.