All Forum Posts by: Chan K.

Hi BPers,

I have been evaluating one of the brrr properties. I want to get a baseline norm of some of the cost. I would like to share your experience in Massachusetts rehab. This is a multifamily asset. 

1. How much does it usually cost to have a General Contractor come down and itemize each cost (roof, siding, plumbing, floor, paint, electrical, .... etc)? I would envision he generates a standard formal report afterward that I can bring into the bank office. 

2. For a 3-plex 2999 sq, would it be safe to approximate 10k-15k roof with labor+materials?

3. For a 3-plex 2999 sq and colonial, would it be safe to approximate 20k plumbing with labor+materials (new plumbing throughout)?

4. For a 3-plex 2999 sq and colonial, how much does it cost to update minor electrical items?

5. For a 3-plex 2999 sq and colonial, how much does it cost to update heating system?

Thanks,

-Chan-

@Upen Patel Who do you talk to that would allow 15% down payment for investment property? I think the lowest I get is 20%. Would you be able to recommend me a few lenders? I am based in MA. 

@Eli Tafesse

First determine if you are going to be a condo, single, multifamily, .... etc buy-hold investor. Once, you determined your niche, then focus on it. Find a local agent in your market, and ask him to add you to his daily listing for that niche/criteria in that market. 

In the daily listing, it usually shows the rent rate for each unit for multifamily (I guess you might be able to apply the same principal to other niches). Stay on for 2-3 months to gather the rent rate data, in which can be used to compile statistic for rent rate. 

The situation above will give you a few information: market rent rate, vacancy, and rent-ability. If most listings have vacant unit, then walk away from that market (it is just me).

To confirm how long the vacant unit is on the market or is there any demand. 

Go to Craiglist or other ad sites, create a database (excel): let say you go on site on Mon

- Grab all available units on rent that were listed in the past 1-week

- Record all of them to your spreadsheet: price, address, # bedroom, phone #, ....

- Then on Friday or next Monday. Compare your recorded spreadsheet with the current state listing on Craiglist. I would presume a few of them are taken from your spreadsheet. Call each remaining rental listing to ask if the unit is still available

- After you called the landlord or Lister, If you think the rent rate is reasonable and most rental listing sits there for 3-4 weeks or more, you better off staying away from that market as buy-hold landlord. This meant the rental demand is not there and you won't strive in that market as landlord. 

@Rick Birkey I would only sell if you are a distress landlord or you think future tenants perspective is negative (unable to sustain your profit). If you are an OK landlord and have everything under control with long term good rental market, I would hold forever and pass it down. 

If you need to buy more property, then work with your lenders to pull out equity and leverage away. This is assuming you have good credit and can leverage. If you reached the number of building limitation already (up to 4 under personal purchase), seek portfolio/commercial lending. 

@Scott Rist I believe the seasoning is 6 months. If I was you, I would contact a few banks to get a baseline on it. Check the local portfolio lending as well as they can be more flexible, because the loan is in house. 

Dear Companion MA Landlords,

For those landlords that own building which contains more than 4 units in it. 

Do you required to inspect that red/full system fire alarm annually?

Ideally, I can just call the fire department and ask. I guess BP is more popular ;)

Thanks,

-Chan-

@Douglas Snook @Rich N. Thank you for the reference and good input. It is very discrete and executable. 

For Douglas, why could not I include the back rent in the letter as it is also part of the deduction? I would understand why I would not include future rent, because it would not make any sense at this point. 

FYI: Rich, the letter is awesome. Douglas the comment about the certified mail is excellent.

-Chan-

@Ned Carey I am not saying I won't send the letter. The question is when I should be sending it. Yes, it does sound like she had been through this process in the past, and I had not. 

Like Douglas mentioned earlier that I have 30 days to send her my reason. Right now I am still rearranging the rehab, so I don't know the exact cost. I might be just give her an estimate, in which is definitely more than her deposit. 

I don't think I am a big fan of someone who came into my unit, broke the lease, destroyed my unit, took off, and still want to get all the money back. The same money that she wants to get back, I would rather use it to hire an attorney.

Another issue I have is that I have no idea where she lives after she took off. She did not tell me her new address. 

@Douglas Snook It looks like this lady is a semi-professional then. She even knows about the two weeks rule for returning her deposit. 

At this point, I will just eat up my loss and keep the deposit. My goal is to keep her deposit at this point, while trying to protect myself. 

My question is:

1) She left and took the key with her, and I don't know where she lives at the moment. If I want to send out letter, where do I know to send to?

2) Should I send her a certify letter now with a reason estimating the cost of rehab or wait until she filed the sue against me about not returning her deposit at the court?

I believe she demanded that her deposit be returned on 10/15. 

My best bet might be to wait until the court sent me a letter to comply with her. By then, the court would have her address in the letter. Then, I can send her the reason and cost of rehab. 

@Rob Beland @Ned Carey @Victoria Avery @Douglas Snook

Hi, 

Thank you for keeping up with the story. So, it is getting even more interesting. Today, I received an email from her stating that if I don't return her deposit in two weeks, she will take me to court due to the slander as I have sent false information to her current landlord. This lady is crazy. I don't even know who is her current landlord is, and I care less about that at this point. 

So, @Rob Beland , it sounds like I did not handle the deposit according to your expectation, this meant my "small claim" is going out of the window. Also, it sounds like you are not recommending me going through the eviction (I think I should go through the eviction just to warn other landlord in the future). This lady record shows really clean.

Given the information I just received from her about her taking me to court, should I just sit back at this point and not returning her deposit? It sounds like the answer at this point is to not evict, no small claim, keep the deposit, and cut my loss. 

Additional general questions

1) If you don't collect security deposit, what happen if tenant damaged your property when they leave? Do you take them to small claim court?

2) If tenants sign a lease and took off before the lease ended, what do you do?