All Forum Posts by: Paul Vail

Burt, can you pull a Paul Harvey, 'and now... for the rest of the story'?

Joshua, FYI -- your two links (from 8 yrs ago) are no longer working.   I suspect a forum migration or update before my (newbie here) time broke things.    Re the Ultimate Beginners Guide to Real Estate Investing:   https://www.biggerpockets.com/...

Have you discovered if Booleans work here?   I can't seem to find their syntax.

Bruce, absolutely!  It's the experiment I can't do until another house comes my way with the right conditions.  As a really green newbie BP investor-wannabe, that might be a little while.   I hope someone else sees our conversation and has done the experiment (and will share).   Real world experience stories are why I'm here.

I'll add in one other idea:  at my retail gig, one of my contractor customers was modernizing a large apartment complex (>300 units).   These were mid90s models, in need of serious facelift love.  My job included spec'ing replacement low boy electric water heaters while the units were getting remodeled.   It became imperative when the low-boys that dated from '96 would unexpectedly let go - flooding the unit and the units below them.  This happened much more than once during our relationship.  Eight or 12 or $15k of remodel would be trashed over night. 

As a newbie here, I know I'm naive: aren't landlord investors here constantly in fear of such headaches?   I don't know where the water heaters are located for the OP on this thread.  Attic, second floor, basement, outside store room?    If the existing heaters are inside, but in a location that could trash/flood the rest of a rental or risk rentals downstream, and he has to replace them anyway, maybe considering an external tankless should be on their radar?

I don't know these things -- probability of a 'worst case' scenario, how often folks have water heaters go sideways for a tenant... I look forward to learning from all of you.   Thoughts?

It's not a decision-maker for the OP, but if anyone is curious, here is some real-world cost data for converting from an electric 50 gal tank water heater to a tankless NG unit. The graph is my sad attempt to show our SFR family-of-four energy use. Red line is monthly $ total spent on all utilities. Green is a 12 month running average of the same. I've noted the starting value in 2011, the point where NG water heater was installed replacing the electric unit in late 2013, a furnace/AC replacing a heat pump in mid 2015, and a sample running ave in 2018. Utility rate hikes were minor. Use patterns roughly the same, although as the girls got older, the showers got longer and the laundry more frequent. So even with the inflation of use and cost, the actual bills went down ~$25/mo for hot water. Break-even for the water heater was $450 cost delta/25= 18 months.

This really has no immediate bearing on the OP's dilemma.  My circumstance changed a number of variables.   Happy to share my data with anyone interested.  There's a lot of BS out there -- real numbers are hard to come by.

Ouch, the deeper one thinks about your question, the harder it is to answer.   My experience is similar to Greg's -- but I must have overlooked where you said what kind of water heater.  Gas or Electric (or some other fuel)?     You mentioned you are on one water meter, so that's not a well situation.  Presumably you don't have sediment issues otherwise you would be whole-house/building filtering.  So that's not a mark against tankless.  Yes, for longevity, 15 minutes of maintenance/backflushing of a tankless per year is a good idea.  Particularly with well water sources or hard water.  Cost is $100 for a recirc pump, 5 gallon bucket, a set of washing machine water hoses and a few gallons of white vinegar.  Not expensive.

Personally, I love my NG tankless. I've had it for seven years when I converted from electric 50gal to gas. My next door neighbor has had theirs for 21 years (and hasn't maintained it at all). I have another neighbor who got his the same time we adopted gas -- again, no issues. However -- my examples are all from SFR, not multifamily. I have a house of estrogen -- the missus and two teen girls. Lots of long showers - before and after my heater conversion. Now, the showers don't require a rest period in between to keep everyone happy. But I'm on a well -- so no h2o bill. It's less costly now on tankless gas than with the old electric tank. I have tracked my energy use for 20+ years -- a tankless gas unit is very efficient cost-wise, much more so than my electric tank was. And I moved a tank that took up 1/2 of a bedroom closet to an exterior wall where it tanks up very little space.

I used to work in a retail big box store. The electric water heaters are designed to basically disposable after their warranty period. Buy a 6 yr unit, maybe get 6-8 years. Buy a 12 yr unit, maybe 14 years, maybe 10. Tankless isn't any different, properly maintained, but they typically have a 20+ year warr.  What I saw returned to the retail store was disproportionately electric tanked units (% sold vs % returned).  Most of the tanked returns were for bad manufacturing or transport (how do you ship a water heater with smashed controls, dents the size of bowling balls, caved tops, or missing internal piping without a scratch on the shipping carton?  Tankless returned was not knowing how to install (some plumbers are thick).

So you have some choosing to do: are you attempting to make your rental units more appealing to current/future residents by having 'more efficient' appliances?  Maybe that will translate into a better rental price point?  Because the only benefit of going tankless to your tenants is their energy/fuel bill (and endless hot water -- which may counter your cost savings by using hot water longer...)   

From my experience, the benefit of going tankless to you beyond marketing would be the probability of longer service use before it rots out, 20+ years -- with the drawback of a bit more maintenance annually or every few years.  How long are you going to keep these rental units?   If you are flipping this triplex in a handful of years, and you are already plumbed for tanked units, unless you think the new owners would pay more for tankless, or be scared away because tankless is unfamiliar to them -- then factor that in.   'oh, tankless is so much more expensive' -- maybe.   How much does a 6yr warranty tank unit cost (x3) vs a 20 year tankless?   Be sure to include plumber labor in your calculations.

But you threw in the 'I pay for water' demon.  Some people above suggested going with a smaller tanked unit to limit the hot water availability.  Unless tenants then get pissed at your unit for not being able to take a 1/2 hr shower.  Will that create unwanted turnover?

Damn, you have a puzzle.

Have you considered metering each unit -- put a meter in to each unit feed, maybe a clause in the new rental contract, and going over x gal/mo is a surcharge?

In the computing industry (I guess it's now trendy to refer as 'IT'), we have a term GIGO (garbage in garbage out).   This isn't a judgment on you or your realtor.  The two of you simply don't know what the other is doing from a lack of proper communication.   If they are otherwise a good person and you are simply frustrated with the data they are providing, grease the wheels of this information stream:

Take them out to lunch with the heads up that you need a 'business meeting'. Bring some samples of the output they've provided -- what was good for your needs and what doesn't work. Or invite yourself over to their office with a box of donuts or healthy snack tray and ask if you can sit shoulder-to-shoulder to see how her MLS software works, and what kinds of filter options you prefer. You'll get as good of information out of your sources (them and their database) as you ask. If you don't do much to improve your query, you'll get just as little back. It's easy to assume the other person is incompetent or uncaring when in fact we are usually just as much of the problem. So find a creative solution. Someday, it may pay off to go the extra mile with this agent.

I see no one replied to you.  I'm six years behind you, and just getting my feet wet here.   I started here:  https://www.nar.realtor/writin...    Probably will jot down notes from BP podcasts and what I'm trying to achieve, and rewrite every 3-6 months.   What was your process?

Hello -- this is my first post on BP.  I've just recently begun a real estate investment education, with the plan to partner with more experienced folks in my area to learn.  Ultimately, my plan is to go for passive income sources with some buy/holds.   Just as I start looking for properties, this news item crops up today:

For those who may not want to go to the link, or the link goes stale, a residential development in my area went through a HOA change-of-mgmt, from the developer to a different composition of Board members. Their first decision for this established neighborhood (2006) was to enforce a rule that has largely been ignored for 15 years -- to disallow rentals in the development. There are well over 100 renters in the townhouse complex. Renters will have to leave by this upcoming mid-summer.

If this is allowed to stand, the units would be for a very different market for investors, negating not just long-term rental landlords (like my aspirations), but conceivably AirBNB-like models.    Has anyone here had to deal with this kind of change in rule enforcement?   What were your experiences as an investor?    Thanks!