All Forum Posts by: Michelle Felux

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $54,000
Cash invested: $12,000

We bought this property as an intensive rehab and are currently in the process of getting it fixed up to rent and refinance. It is a 3/2 with a carport near some of the area's community colleges.

What made you interested in investing in this type of deal?

Low cash out of pocket, huge transformation with amazing cap gains and cash flow combined.

How did you find this deal and how did you negotiate it?

Lifestyle's Unlimited and their network of wholesalers.

How did you finance this deal?

Hard Money and will refinance to conventional loan.

How did you add value to the deal?

Gutted it and are re-doing the entire thing.

Thank you! 

Hi everyone,

I am looking into starting another full rehab on a house from the 1920's and, while I have a few subs that I feel confident with their quality, we are still really early on in building our team and could always use references/help. I have an HVAC guy who has been really great so far, and might have a foundation guy (not 100% if he's available). I'm looking for any references for a potentially full rewire, full re-plumbing, roofing, foundation, drywall, carpenters and painters. I'm going to reach out to some investors that I have worked with recently to see if they have some recommendations too. 

Thank you for any recommendations! 

We rehabbed a long term rental from the 40's with original hardwood floors that were a hot mess. We opted to lay laminate wood floors on top of them instead of forking out the cost for refinishing them, especially since we would likely have turnover in the property each year with pets and everything. It saved us about $3k going that route. I could see some people getting upset about laying something on top of the original floors, but it worked for us in this particular scenario. 

Yes, our house doesn't really freeze over either at 3 months with 3 inside dogs and a toddler. She seems to keep the house in good order. Now you have me thinking the diagnosis might have missed something! The company they used has a pretty good rating, but I mean I've been through that before - highly rated vendors just lying to your face. 

This headache might be alleviated by replacing the filters ourselves from now on... so we eliminate the possibility of this being the case of AC failures moving forward, but we'll see. Her AC unit has seemed to be working just fine since she replaced the filter.... wonder if it will keep up as the temperatures are already looking to reach 100 Sunday here!

Thank you all for your input, it's so helpful to have more than one thought process on handling these issues. 

@Mindy Jensen thank you, good call. A due date is always helpful :) 

@Account Closed Your information about QuickBooks is incredible!! I really struggle with QuickBooks and how to manage our books properly... I see you have a blog. I will probably head over there next and check it out, maybe your blog can help me. I would love to learn more about QuickBooks from you. I definitely need some major help in that area!

@Ned J. thank you - that's a good point, for a good tenant possibly we could do a first offense sort of approach. She has had a few minor repairs in just her first two months of the lease, but I couldn't 100% attribute them to her - a light cover fell and broke, but we had hired a cleaning company to clean the fixtures and they might not have replaced it properly. The back door locking bar broke, but also we didn't examine it super closely in the walk through with her. We are learning as we go and the advice here combined with our real life lessons are so very helpful for that!

I agree that it's probably unrealistic to expect most tenants to change it each month and we will re-examine our approach to this - we do ours every 3 months at our own house, but she has only been there for two months and already clogged the filter so bad that the AC froze up! With it that bad at only two months, I think this system needs the filter changes each month - she doesn't live with an excessive number of pets or anything.

We were spoiled by our first few tenants who were amazing and took care of the property possibly even better than if they owned it themselves. Moving forward I think we might switch it up to replacing it ourselves and inspecting everything at that time. 

We recently considered doing the same thing in our San Antonio market, but our research prior to making the jump led us to abandon the idea. We live on 3 acres with good neighbors and a nice house that has significantly appreciated, which would make us some pretty solid gains if we sold. However, we could not find a duplex or triplex that we were comfortable moving into - the ones we did like did not make sense financially. They were too expensive and netting too low of rents for what we would be wanting to live in, if that makes sense. We found that it was a better move for us to leverage one of our existing single family homes into two single family homes, staying in our current house.

However, if you were looking to move school districts anyway, you could look into another single family home or even a live-in flip that you would come out ahead on in the future? Maybe nothing crazy that needs a ton of work, but something you could enjoy upgrading or could rent out in the future if you chose to relocate again.

Hello everyone! 

So we got a call this weekend in the South Texas heat that one of our tenants had the AC go out completely. Of course, we went through as quickly as we could to get in touch with our Home Warranty company and get an HVAC company dispatched to diagnose the issue.

HVAC returns my call today telling me that it was a "severely clogged air filter" causing the lines to freeze over. Her lease states that she should be changing the filters monthly and, in a subsequent section, that she would be liable to reimburse us promptly for damages... and service required by violating her lease rules.

I feel we are within our rights to request a $75 reimbursement for the service call and have this drafted:

Dear [tenant's name]:

Per your lease agreement, we are enclosing a bill for $75.00 and a copy of the HVAC technician’s findings and the diagnostic call receipt for services required for a “severely clogged air filter blocking the air flow causing the AC system to freeze up”.

Per your lease agreement, section 19B, you must replace air-conditioning filters monthly, which would have prevented the clogged air filter issue. Section 21A in your lease agreement outlines the requirement for prompt reimbursement for loss, damage, consequential damages, government fines or charges, or cost of repairs or service in the house because of a lease rules violation.

Sincerely, 

[Us]

Should I add anything more to this? My next steps would be to build my Quickbooks invoice and send it to her electronically. If she never pays this, would I deduct it from her security deposit at the end of the lease? I probably would not evict over something this minor, as she's a pretty solid tenant. Not 100% amazing, but pays on time, doesn't bother us much, etc.

Thanks for your input!