All Forum Posts by: John Newman

Hi @Lee Carrell,

If I were you, I would look into replacing that section with aluminum roofing.  If it's not visible from the street, you can save some cost on the material and installation, yet still have a long lasting roof.  Aluminum roofs are much more popular than copper, and not as difficult to install.  If you have one section that is asphalt shingle and another that is copper, you won't be taking advantage of the long lifecycle because you'll still have to replace the shingles more often.  

Does this section need replacing because the copper was stolen?

Hi @Cameron Price,

I highly recommend both vents.  They will prevent more costly repairs from moisture damage.  

It looks like your upper kitchen cabinets go all the way to the ceiling.  I would definitely install a hood over the range and probably vent it through one side of the cabinet above.  Does that side of the kitchen face an exterior wall?  If so, you may be able to vent it out the side of the house at the gable end, instead of going through the roof (the fewer penetrations in the roof, the better).  

When you install external vents in a kitchen or bathroom, remember to use insulated duct in the attic, and make sure the ducts are sealed.  You don't want to be venting warm, moist air into your attic.  

Also, bigger is not always better in terms of fan capacity or CFM.  The more air you draw from the conditioned space, the more air you will be drawing into the house from outside.  

Here is a good link from the Home Ventilation Institute on properly sizing your vents:

http://www.hvi.org/publications/bathroom_ventilati...

Hi @Justin McDaniel,

My father did HVAC in Florida for many years, so I grew up working by his side.  Heat pumps are by far the preferred system for the southern climate.  When replacing, it is always better to replace both indoor and outdoor units at the same time, as they work together as a system.  There are some factors that can make the installation more expensive.  

Where are the indoor and outdoor units located?  This often adds an inconvenience factor to the installation costs if they are less accessible .  The refrigerant is not likely the culprit for your estimate.  All new systems come pre-charged with refrigerant in the condenser.  Only for a really long run between the air handler and condenser would extra refrigerant need to be added.  Older refrigerants are being phased out, which drives up their cost, but is of no concern for a new system.  

What type of backup heat?  Gas or electric?  You definitely need a backup heat source.  

Did the contractor quote you on any other work, like replacing ducts?  

I definitely do not recommend buying the equipment and trying to get someone else to install it or do it yourself.  This type of work requires some expertise and specialty tools.  And you probably need a permit.  

Hi @Account Closed mentioned, the market is hot and multi family properties are hard to come by, but not impossible.

If the tenants know that the owner lives in the building, I think they would be more respectful of the property, if not your privacy.  I'd suggest setting up a system for handling maintenance requests and payments online.  By concealing the fact that you are the owner living at the property, you are giving up some of the benefits of on site management and your ability to quickly address any issues.   

What class of property is this?  What condition is it in?  Are these tenants you've inherited or did you screen them?

Hi Mike,

If I were you, I would chose a gas storage tank water heater and not bother with a tank-less. The main reasons are that the storage tank type cost (capital) considerably less compared to a tank-less water heater, and you will not be living in the units to recoup the energy savings (operating costs).  I don't think the long term investors care whether the water heaters are tank or tank-less, just that they are new.  As an investor, if your tenants will be paying the gas bill, you will be best served by fitting a new tank style water heater that is properly sized for the number of occupants in each unit.  This will satisfy all four of your goals.  

Tank-less heaters are best for your personal residence that you plan to live in long term.  I have to correct a couple points made earlier: life expectancy for a tank-less is 20 years, but only about 10 for a storage tank; and you cannot compare operating costs of gas water heaters simply by their input rate in BTUs.  This is only part of the equation.  The total energy used = rate x time.  Tank-less water heaters have a higher input rate, but burn for a much shorter average time.  The energy factor (ratio of heat output energy to gas input energy ) of a storage tank water heater is usually about .71, but a tank-less heater is usually above .95.  A more true comparison would be Therms/year, or the amount of gas used per year based on the standardized test cycle.  The Energystar.gov website has lots of information about water heaters and other rated appliances.  You can even compare different models.  If you do, you will find that tank-less models are more efficient across the board.  

 Hi Gilbert,

I am very intrigued by this concept.  Can you give some examples of these investment clubs?  Do they have minimum investments?  Can you contribute periodically?  Are there restrictions for withdrawals? 

Thanks,

John Newman

Hi @Sven Li, 

Since you mentioned that you want a return on you investment in a few months, I wouldn't do a buy and hold rental. While the FHA 203k option allows you to finance the renovations and have little cash in the deal, you have to live in the home as your primary residence. I don't think they'll let you do this type of loan for a short term like that. If you sell your primary home without living in it for 2 years, you will have to pay income taxes on the gain anyway. The 203k loan is very specific on contractors, and you may not have the option to do the jobs you want to do yourself.

Instead, I would just do a flip.  Find a private lender, maybe someone local to fund the deal.  You could also try being your own general contractor.  This way you can do the jobs you feel comfortable with and sub out the rest.  This is not a bad option if you have both construction and management skills. 

Hi @Damien Christian,

If you have a HELOC but haven't used it yet, that's probably not what is causing your credit score to fluctuate.

You should check out Credit Karma.  It has lots of useful tools.  You can even simulate your actual credit score.  According to their site, these are the factors that affect your score listed from greatest impact to least impact:

Credit Utilization

Payment History

Derogatory Marks

Age of Credit History

Number of Accounts

Number of Inquiries

Most people are concerned about the number of "hard inquiries" they have, but that factor has the least impact on your score.  One of the easiest ways to improve your score is to contact your credit card company and request a credit line increase.  I can do some of mine online instantly right from their website.  Then don't use that extra amount.  This will decrease your utilization ratio without decreasing your average account age.  Contrary to popular belief, creditors actually like to see you to have more credit accounts than fewer.  

Also, utilization ratio recalculates every month or two, unlike number of inquiries and average account age that have history.  So the above method will also positively affect your score the soonest.

I am not a personal finance expert, but I do know quite a lot about credit.  I hope this helps you and others.

John Newman

Hi Mark and Wife ( I didn't catch your name on your profile),

Since you're interested in renting out both spaces long term and living in one of them short term, I would suggest going with a medium grade and quality material, with the lowest maintenance possible.  Check out this 4 minute video from one of my favorite shows, Ask This Old House on stone countertop maintenance:

http://www.thisoldhouse.com/toh/video/0,,20504052,...

Host Kevin talks with an expert.  If I were you, I would pick the engineered quartz.  It has probably the highest durability and lowest maintenance of other stones, at a fraction of the cost of natural quartz.  This is a surface you could live with and also impress potential tenants.  A quick demo at each move-in on periodic surface maintenance could prolong the life of your investment.  You could also do it yourself during inspections.  It really is easy.  

Just remember that higher quality finishes usually bring higher quality, longer term tenants and garner higher rents; not always the case, but more often than not.  You should also check out the nearby competition.  This will help you to not over-invest in finishes but still have a competitive advantage.  

We would love to see pictures of your 1903 duplex!

John Newman