All Forum Posts by: Dan Miller

I am about to purchase my first rehab property (hiring out all the work though, not doing it myself), and I have a few basic insurance questions:

1) Is there a difference b/w builders risk and vacant property insurance? If so, what does each do and do I need both?

2) Do I need some sort of theft insurance for once we put in new appliances and HVAC?

3) Do I insure property for purchase+rehab ($130k) or ARV ($200k)?

As you can see I'm a real novice, so any help on these general topics would be very useful. Thanks!

Dan

Thanks, Jon. What is included in expenses in teh 50% rule? Since I know the HOA and I know the taxes, should I simply capture that in real expense and then make an assumption for vacancy, uncollected rent, and maintenance? If so, how would I determine what that assumption should be?

Thanks!

I'm looking at an REO townhome that is currently priced at $100,000. Rents are about $1200 in the area and the homeowners fee is $50 per month with property taxes at $175 per month. Let's assume insurance will be about $50 per month. How do I capture potential maintenance, vacancies, or uncollected rent when I'm analyzing potential cashflow? The numbers can either look very good (i.e. $150-200 cashflow positive) or it could look bad if I assume some high monthly maintenance cost. Please advise.

Thanks,
Dan

My letter doesn't talk about financing. It stresses the pain points of being a landlord (vacancies, late rent, making repairs, tenants destroying property, maintenance expenses and hassles) and the benefits I can provide in buying the house (as-is, quick, cash, hassle-free, etc.)

I switched from generic postcards to absentee owner-specific letters in my 3rd mailing and here are some important learnings:

1) I actually got some returned mail with my letters, which I didn't get with my postcards, despite mailing them 1st class. The returns are good news b/c now I can cross off those bad addresses from my list.

2) I have gotten 2 responders (actually talked to me) so far out of about 300 mailed letters, and generally higher call volume calling my recorded message (can't prove it's from my letters, but likely given the timing).

3) My letter was brief (one page) and highlighted the pain points for tired landlords (vacancies, repairs, late payments, expenses, etc.)

Still not yet getting motivated sellers calling me, but at least I'm getting a few calls. That's a start.

Thanks for all the suggestions. I created the postcard myself and personally think it's catchy, but it may not be so. One downside is that it has been 4x6 b/c postage is less, rather than something bigger like 5x11 or even 5x8. I think I may try mailing one more time, but switch to a letter this time that has a specific message for the pains of a landlord, rather than a generic message that can go out to any homeowner who might need to sell.

Dan O.--thanks for your reponse. I have not called them. I don't have their phone #'s for the most part, but could try doing a reverse lookup. good idea. I don't think I can call all of them, but could call a sample and see how it goes. thanks again.

Still wonder how I find out what's actually not working though.

Dan

when evaluating properties (I'm a wholesaler), how do you determine when something should be rehabbed vs. torn down? For a tear down, what are the typical costs to demolish and rebuild a SFH (let's say 1500-2000 sqft) in a blue collar neighbhorhood? I'm in the Wash. DC region, so anyone with knowledge to that area specifically would be extremely helpful, but any advice at all would be appreciated.

thanks,
dan

I am negotiating what could be my first deal with the bank that owns the property. This house has been vacant for about a year now and has serious mold issues (all over the basement, and spots on the main level. Can't tell upstairs by the roof, but it's possible. As I estimate my repair costs to determine my MAO, how much should I factor in for mold remediation?

I've sent out two postcard mailings now over 2 months to the same list of absentee homeowners in a particular are in the DC region, but gotten only 1 call (mailed 700 people each time). My list was generated from the tax records (via MLS) which can potentially be outdated though. (but it's free). I used the same postcard twice now.

So here's my question: how do I determine why my mailings aren't getting any response? My mail qtys are too small to really do testing of different marketing pieces, so I don't know if it's the mail piece, the list, etc.

I was planning to mail this same list a 3rd time in a few weeks. Would you suggest I try again with a letter to the same list (law of repitition) or should I make an assumption that my list is bad and go out and buy a new list of absentee homeowners?

Thanks!