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All Forum Posts by: Pete Harper

Pete Harper has started 92 posts and replied 502 times.

Post: Solar panels for a rental

Pete HarperPosted
  • Rental Property Investor
  • Streetman, TX
  • Posts 526
  • Votes 495

@Kenny Hardcastle I did some research into solar for my personal residence in CA. It didn’t make sense financially. In CA PGE is your only option for electric. During the day when you generate solar you get paid at tier 1 price. When you get home in the evening and it is dark you pay tier 3 pricing. At the end of the year you get a true up charge. Talking to people who had solar they were paying $3-4k in fees due to price spread. That was close to my annual electric bill.

For me that same capital would be better spent upgrading my current properties to raise rents or simply buying more properties. I don’t like the paid utilities price model for rentals. People tend to abuse the service using more than they would if they paid for it themselves. We are doing a duplex renovation and I spent more just to fully divide utilities.

Post: Resident Property Manager’s

Pete HarperPosted
  • Rental Property Investor
  • Streetman, TX
  • Posts 526
  • Votes 495

@Scott M. Would you know the tax laws on trading services for free rent? I don’t want an “employee” with associated FICA and tax withholdings.

Post: Crazy Cat Lady Duplex

Pete HarperPosted
  • Rental Property Investor
  • Streetman, TX
  • Posts 526
  • Votes 495

@John Teachout That cats were only on one side. Four treatments with Clorox in a garden sprayer and I’ve killed the smell. Both units were 2BR/1BA with an unpermitted carport conversion into 3rd bedroom. They did a half assed job with the scariest electrical work I’ve seen. The remainder was dated 1960’s paneling. Cat smell was soaked into the wood. We decided to gut the whole thing and rebuild as 4BR/2BA. I’ve also split the utilities so each side will pay their own. When we are done I expect to get $2400/month vs $1400 for two 2BR.

Post: Crazy Cat Lady Duplex

Pete HarperPosted
  • Rental Property Investor
  • Streetman, TX
  • Posts 526
  • Votes 495

@Caroline Gerardo since we were adding a bath and two bedrooms I pulled a permit with the city. It wasn’t expensive. Out town doesn’t have an inspector so they contract with a private company. Our inspector is based 4 hrs drive away. So far they have been very easy to work with.

Post: Crazy Cat Lady Duplex

Pete HarperPosted
  • Rental Property Investor
  • Streetman, TX
  • Posts 526
  • Votes 495

@David Avery We are 9 months into this project. The first contractor was a total train wreck. He was just doing the bare minimum work then turning around and asking for more money. In March he said he couldn’t make payroll and needed more money to finish. We were already upside down on draws so I refused. He eventually abandoned the job and quit answering phone calls and texts. I’m suing in small claims. We have a court date in July.

The new contractor is moving right along. First he had to fix all the damage from the first contractor. I think we will be rent ready in August, just shy of a year. Not exactly to the original plan of six months.

Post: Resident Property Manager’s

Pete HarperPosted
  • Rental Property Investor
  • Streetman, TX
  • Posts 526
  • Votes 495

I’m looking for ideas on managing my local properties. I have a total of 18 units in our small town. We live in a small enough market there are no full time property managers. There are a few realtors who do it on the side but not what I’m looking for. We have other properties out of town with full time PM that handle everything. I don’t see anything of that caliber locally.

I’ve been thinking about getting an on site PM. Someone to collect rents, take the off hours phone calls, show units and maybe do some light handyman work. In college I did this at one of my mother’s properties. It was a 20 unit complex just off campus. All the renters were students. In exchange for managing the property I was provided free rent. Before me there was another guy with the same arrangement. In the ‘80s this was quite common.

I don’t see this arrangement as much anymore. I was wondering if the tax laws have cracked down on this sort of arrangement. I’m not looking to hire an employee with all the associated tax and withholding headaches.

Anyone doing something similar?

Post: College Street Apartments

Pete HarperPosted
  • Rental Property Investor
  • Streetman, TX
  • Posts 526
  • Votes 495

@Annchen Knodt The property is in Fairfield, Tx. Population just over 3K. Definitely a small market. With that said, demand for apartments has been high. We’ve stayed fully rented plus I have a waiting list.

You need to stay aware of your market. I’m targeting $700 for a two bedroom apartment. To qualify tenants need to make over $2100/month. That is within range of most working class renters. That’s two minimum wage workers or one person making over $13/hr.

Post: Hollywood in Central Texas?

Pete HarperPosted
  • Rental Property Investor
  • Streetman, TX
  • Posts 526
  • Votes 495

@Bryan Noth

Time to snap up those tax auction properties in Tahitian Village.

Post: Crazy Cat Lady Duplex

Pete HarperPosted
  • Rental Property Investor
  • Streetman, TX
  • Posts 526
  • Votes 495

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Fairfield.

Purchase price: $85,000
Cash invested: $60,000

Crazy cat lady duplex. This is going to be our most ambitious real estate project yet. This is a 1960's all brick duplex. It was originally build as a mother in law property with two identical 1200sqrft 2 Bedroom/1 Bath units. It was most recently occupied by the original owner who had cats. The place reeks of cat urine. She has moved to an assisted living facility and we purchased it from the family.

All-in cost $145,000
ARV estimate $225,000
Rents $2200

What made you interested in investing in this type of deal?

I have a zillow search running with my buying criterial. This property was listed and we viewed it the next day. The duplex was in bad shape but had potential. We saw a way to convert it to from 2BR/1BA per side to 4BR/2BA. Huge upside potential.

How did you find this deal and how did you negotiate it?

Found the deal on MLS. We didn't win the initial offer. The first buyer's deal fell through and our agent alerted us. We were able to close the deal with a slightly higher offer.

How did you finance this deal?

All Cash

How did you add value to the deal?

With 1200sqrft to work with there is more potential in the property than just a 2BR/1BA. It has a half-assed carport conversion adding an unofficial 3rd bedroom. Since this is a bigger project than we have done before we plan on hiring a contractor to do the major work; demo, framing, electrical, plumbing, and sheet rock. My wife and I will do the finish work with new kitchen cabinets, new bath, flooring and paint. We have budgeted $60,000 and 6 months for the project.

What was the outcome?

After reno is complete and we have the property fully rented we plan on doing a cash-out refinance and go find another deal. BTW the cash for this property comes from a cash-out refinance of a 4-plex we purchased with 1031 exchange funds in September of 2019. The same capital has been cycled through two properties in a year. Gota love the BRRRR Strategy!

Lessons learned? Challenges?

The original contractor was a complete train wreck. We are headed to court. LL Never give a contractor too much money up front.

Post: Crazy Cat Lady Duplex

Pete HarperPosted
  • Rental Property Investor
  • Streetman, TX
  • Posts 526
  • Votes 495

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Fairfield.

Purchase price: $85,000
Cash invested: $60,000

Crazy cat lady duplex. This is going to be our most ambitious real estate project yet. This is a 1960's all brick duplex. It was originally build as a mother in law property with two identical 1200sqrft 2 Bedroom/1 Bath units. It was most recently occupied by the original owner who had cats. The place reeks of cat urine. She has moved to an assisted living facility and we purchased it from the family. With 1200sqrft to work with there is more potential in the property than just a 2BR/1BA. It has a half-assed carport conversion adding an unofficial 3rd bedroom. Our plan is to totally gut the house removing all the dated wood paneling, kitchen cabinets and bathrooms. We will rebuild as a 4 bedroom/ 2Bath with laundry. This will make the property family friendly in keeping with the residential neighborhood.

Since this is a bigger project than we have done before we plan on hiring a contractor to do the major work; demo, framing, electrical, plumbing, and sheet rock. My wife and I will do the finish work with new kitchen cabinets, new bath, flooring and paint. We have budgeted $60,000 and 6 months for the project.

All-in cost $145,000
ARV estimate $225,000
Rents $2200

After reno is complete and we have the property fully rented we plan on doing a cash-out refinance and go find another deal. BTW the cash for this property comes from a cash-out refinance of a 4-plex we purchased with 1031 exchange funds in September of 2019. The same capital has been cycled through two properties in a year. Gota love the BRRRR Strategy!