All Forum Posts by: Mitchell Hein

 I doubt if any of them give your more than a 1 year warranty.  

I am getting ready to get involved in real-estate for the first time. Planning to buy a duplex - quadplex in Louisville KY. Looking for advice of any kind here, but specifically I'm struggling to decide what I should be looking for in a first time house hack. Should I get a turnkey house or something to fix up? What is a good price range for a first house in Louisville knowing I have enough saved to make a large down payment if need be? 

Any & all advice welcome!

Go with the cheaper option. You'll sell the building before the unit goes out. 

Nor should you. But in every market you have two types of prices. You have homeowner prices and then you have builder/investor prices. Do you think your contractor is quoting a builder $8,340? They know if they did, they would never get the job. And for that reason, some contractors will only work with homeowners. The same AC or water heater also costs more if it gets installed in a 1 million dollar home than if it goes into a 300k home.

And as new investor, you have to expect to be charged more than a builder, but armed with a little knowledge you can get a better price than a homeowner and still allow the contractor to make good money.

For most construction work materials times two is a good guesstimate, so about $6k is likely a good price. 

I am not in favor of squeezing the last dollar out of trades, just to the contrary. If you don't pay fair prices, you will not have good contractors make time for your job. It has to be a win-win. I have been rehabbing homes in Milwaukee for 15 years, I have even dabbled a little as a builder and of course we manage our rental rehabs.

@Marcus Auerbach

If u have an hvac person only taking half a day to swap out a new heat pump and central air, and do all the proper evacuation and testing, they are on speed. More likely to take a full day and maybe part of another day. You are making a lot of assumptions on accessibility and ease of install.

Regarding materials, it's not just the units. Odds are the drain line, condensate pump, putting down new riser blocks or mounting blocks, the whips and line sets, new disconnect box, new low and high voltage wiring aren't in your Google pricing.

We don't use heat pump systems in the Midwest, because the winter is too cold, but I just Googled your system and your contractor is making a killing on labor. Install should be about half a day plus disposal of the old system.

For reference, I am usually all-in furnace and AC for about $5000 for a single-family home in Milwaukee.

I just received a quote from my AC company, these are the two options we received:

Option #1: For a 2-stage Rheem heat pump system the total price will be $8,340.00.

Option #2: For a single stage Tempstar heat pump system the total price will be $7,280.00.

The property is a long-term buy and hold, so we plan on owning for the next 30+ years ideally. It is a duplex, 1,300 sq ft on each side, and we only need to replace the AC/heat on one side right now (this quote is for the one side). We have enough reserves to do either option.

I am leaning towards the more expensive option 1. I am thinking over a 30-40 year time horizon, the nicer system will require less maintenance and also last 3-5 more years, so would end up being the cheaper option in the long run. These properties are in the B to A class range, 2002 built so this is the first time needing an AC system replacement.

I am curious what everyones thoughts are here, would you go with the nicer system since you will have the property long-term, or is the $1,000 cost difference too steep for you?

I would shop around prices and go with Option #1 for the cheaper price. I just replaced an AC for a similar property in College Station and had a quote for $8750.09 after inspections were done on the property. I blacked out the price and sent it to two other companies for them to give me a quote (not knowing how much I had already been quoted.) A company came back saying they could do it for $7,850. I had never used this company before, so I went to the original company that priced $8750.09 and asked them to price match. They agreed and did amazing work, like they always do. This saved me $900.09 and allowed me to get the system I wanted. Perhaps you could do the same and get the best of both worlds. Here are some companies to look into.

Advantage Heating and Cooling

BCS Air Solutions

Barkers Cooling

Malek Service Company