All Forum Posts by: Mike B.

Unsure if this would be more "off topic" vs DIY but wanted to share a quick side project in case anyone was contemplating this.

I've managed not having a truck for several years but after 6 rehabs, it was time to pull the trigger and get one. The convenience of having a truck is oh so nice (e.g. when you find deals on FB marketplace/Craigslist and need to go pickup materials quickly for cheap).  I finally decided if I rehab homes, why not rehab/build-to-suit a contractors truck for me? Needed something 4x4, smaller side, reasonably priced etc. My goal was to stay under $5K; no way I wanted to spend 10K plus for a truck (or even $20-30K for a new one).

After searching a few months, I picked up this 1999 Ford Ranger 4-door (all doors open) 4x4 with a 4L motor (gets 18mpg HWY). Had 81K original miles; 2nd owner (who knew the 1st owner)!  Only issue is rust on the rockers, needed new tires etc. Purchased for $2500 (after much negotiation). Bought new wheels/tires (off Craigslist for cheap), Contractors cap ($90 craigslist find!), and some other accessories/fix up stuff for it.  I am slightly mechanically skilled, so I changed fluids, wipers, bulbs, etc.  I'm all in at $4K now for a reliable work truck.  Only have to bolt on the 2001 Front end (I like the look better) and do some minor repairs, but it's solid and couldn't be happier with it.

Thoughts? Anyone else do this? 

@Thomas S. Thanks for the suggestions. All- forgot to mention that although home is in a b-/C+ neighborhood, the area the gentrifying and changing and we have B+ tenants (or better) moving in. My past two rentals in this neighborhood were rented at the top of the market to great tenants (strong vetting process helps). These are not section 8 tenants by the way. In the end I found some other issues with the house so I’m opting to do a nicer kitchen and bath to mimic my next door project which rents for $1600/month (top of market in the neighborhood). ARV is the $250K range for doing a really nice finished home so I’ve decided to spend a little more to make more on the Refi.

@Trevor Deeter - learn to walk before you run, learn to float in the water before you jump into the ocean.. 

I don't know what your past construction experience is (or if you're handy at all) but if it's minimal, then I would stick to rehabs first (doing cosmetic renos, then more complicated as you aquire and rehab) then go into new construction.  I've full gut renovated several homes and did cosmetic reno in another few, so by now, I do know how to build a home. However I'm not running out to do new construction.. that's just me though. 

Your questions from above and my answers/thoughts below:

First off... is this too ambitious for first-timers? yes I think so (unless you have construction experience yourself).. would focus on renovations, cosmetics first.. then go into development. 

In general, how much of your time as an investor is spent enmeshed in the renovation process once it has started? I act as the GC on my projects so I'm usually purchasing and dropping off materials at various points during the week, speaking with my subs/contractor on the phone for progress/updates, etc.  Avg 10hrs/week easy.  Plus if I'm doing online research/purchasing material online.. add another 10 hours/week on top of that.  As the project goes on and more gets done, I stop by/check in less as larger work is going on and takes time. 

Aren't we just planning with our GCs and then our GCs handle most of the grunt work during the reno phase?  IF you're hands off and have a GC running the "whole show" as to say, then still expect to stop by and check on progress at least weekly (e.g. Fridays).  Preferably twice weekly.  The more you trust your GC, less likely you have to stop by 

Other than my wife and I checking in on our GCs, what type of work load should we be prepared for in this phase? 

--Depends on how 'hands on' vs 'hands off' you want to or "have to" be with the project.  Again, if you have a great GC who's managing everything, then there isn't a ton of time spent checking in on the project etc. 

Is it really going to be hard to oversee 5 renos at once?  Yes it wont be easy, unless you're doing similar designs for everything and your GC has a large crew where he can manage subs at the same time over multiple homes. Now consider how far away (travel time) is each project from one another??  Factor that in as well

I'd like to think we're capable, but would hate to dive in and find out I'm wrong lol - You need to make highly calculated moves and be financially stable enough with 6 months of carrying costs for you personally as well as the home you're financing to flip/rent/etc.  If the market sours or you can't get it rented, or things take longer to get done.. time is money as they say and you need to ensure you have plenty of cash when times are tough/tight. 

@Adonna Pruette - great idea about turning small shower into a closet; I actually didn't consider that.  South Philly row homes generally dont have large bathrooms so I may also price out just doing a full plastic wrap install on the interior (instead of tile).  Thank you for other suggestions.  Oh and the tub is YELLOW (ugly yellow) so I'm going to spray it white (I have a guy who will do it for $250).  Thanks again

@Jonathan Depa, as @Tim Schroeder wrote, your DTI might be too high. I recently was advised by my broker that in order to purchase an additional property in the future I had to pay down more debt (I have great credit, I work in the medical profession with great W2 income, etc etc). So if you have the cash reserves, I would payoff any/all credit cards, car loan, etc.

If you don't have any of the above mentioned debt, then consider doing a mortgage "recast" and putting down a good chunk of change into a property (or pay one off) and thus lower your monthly payment which will lower your DTI. This assumes the mortgage company allows the loan to be re-casted

@Steve Vaughan sound advice! Thank you everyone for your responses and advice. I already politely declined attending but I agree with some statements above that it’s good business and we (tenants and I) are on a closer interaction platform (I’m usually in the neighborhood, quickly address any issues that come up which are minimal) and potentially in the future they will rent longer or purchase a home from me. So yes, I agree giving a small nominal gift would be good (gift card or small item from their registry vs cash) Thank you again!

@Joe Villeneuve lol that’s funny and smart at the same time. They’re in their 20s though so not selling homes. Mixed rental vs purchase stage of their lives I suppose. I am hoping one day I can sell my tenants my SFH rental and do a 1031 with that though. One can dream...

Hi all,

Well there's always a first for things and for me, it's being invited to my tenants wedding!  I was totally surprised by this.

They've been in my SFH rental property for nearly 2 years now (and are staying another 2 years), take fantastic care of the property, NEVER have any issues with them etc. At any rate, I will respectfully decline their invite because we genuinely won't be able to attend, but I want to send some type of gift to them. They have a new puppy, I was thinking a small gift card to a Petsmart and also a check for $50 as a wedding gift.

I know, a bit generous by some standards, but feedback on a gift(s) to send to thank them for the invite etc? 

H4HRestore wont remove the items.. you have to drop it off to them.  They certainly won't do demo/removal (physical) if it's screwed/secured to the floor/wall. 

Would also look on Angies List and Craigslist to see if you can find anyone interested. 

@Jimmy O'Connor there's some other threads on here from wholesalers discussing the next hot areas; speculation of course.  I only invest in West Passyunk currently.  Very affordable buy in, rehab, and either sell/rent. Close to local shopping, easy access to I-76 or PHL airport.  Several breweries and good eateries within walking distance.  

Sweet spot (in my opinion seems to be) Snyder to Oregon Ave, from 18th-23rd