All Forum Posts by: Pat L.

Last year we gutted a 1400 sq ft circa 1950 2 story home got it for $49k (foreclosure). We had to replace all the plumbing ($3400 in materials), we did all the work. I replaced all the wiring to code with 12/2 & upgraded the panel to 200amps $2800 in materials. Permitted & inspected & we were allowed to do all the work. 

Our total gut ran about $65k inculding all new drywall as the walls had an adobe style finish, plus we added two additional 1/2 baths. Roof, siding, entry doors, windows had already been upgraded.

The wife maintains separate bank accounts for each rental & escrow accounts for each of the properties we seller financed. (Now down to 42 accounts).

It was a life saver during our first extensive IRS Audit, as they checked detailed ledger entries etc etc on all properties going back 7 years. Our most recent Audit ran from Mar-May this year & required weekly 2-3hr phone calls. The Auditor required the same detailed accounting by property, going back from 2019 to 2012. These detailed records, (many copies of which had to be scanned & emailed to them), saved us from any 'taxable consequences'. 

Had one the same & she was absolutely delusional. Inherited her as the GF of a great tenant that bailed & left her. Within a month she claimed mold was making her sick & said she had pics which were later admitted by her as being from a Google search. 

Tests were negative, but she said it was because she scrubbed the wall?? The same day of testing we painted the entire bathroom (admittedly it was due after 8 years). Next day she said she took her own sample & it was +ve for mold on the freshly painted wall. That spore dish looked a lot like another pic from Google. Then she said she had medical bills for mold 'poisoning' but her new BF admitted in discussion that she was just suffering from her yearly allergies. He showed us the meds she said were MD prescribed & they were in fact just OTC antihistamines. 

We had our attorney terminate the MTM, so she quickly offered via our attorney to pay the $130 she held back for cleaning, her MD copays & meds, also pay the rent overdue for that month. We did get all the arrears but processed the termination. She gave up, vacated, left a mess & a $4,000 sleep number bed/mattress that she still owes for. We kept the old BF's $1,200 security deposit.

A couple of months later she sent a text to my maintenance guy asking for a landlord reference that she needed to get another apartment. 

Everyone above has valid points, but just maybe the low margin will be worth thousands as a learning experience for your future deals. In the old days those we squeaked by on were sold with seller financing @ 10-12% to mitigate the $$$ pain & suffering. 

I couldn't resist taking these pics as well...the tenants cats had torn down all the curtains & literally shredded the tenants couch but $$$ on-time :) 

That was the ONLY way I could have survived back in the days of 18% interest rates.I bought homes using seller financing & had to rent every room to make the mortgage payment, cover the rehab & we split the utilities. BUT I kept a room in every home so I could come & go plus lock up the tools etc I needed for rehab. It allowed me to keep buying homes, retire early & the rest is history. 

My daughter has a couple of great roommates going on 4 years & it pays her 2.85% mortgage & they split the utilities, WIN WIN !!!

went through a friends rental to quote on a job. The paining done by the tenant was atrocious, cabinets had paint on the sides, baseboards, door & window trim were smeared in paint by these complete idiots. 'BUT they pay on-time' he says :) 

NEVER from previous experience yet some will do it regardless of permission. 

We were only lucky once. One new tenant hired a pro-painter, so we were able to leave all the new drywall, baseboards, trim etc just primed. She stayed 6 years & when she left we also found that she had upgraded all the outlet covers, toilets, lighting & all faucets at her expense. When she moved out of state she left all her newer appliances, patio furniture & being OCD the place was immaculate. 

Had a similar window setup & problem so we replaced it with glass block. I upgraded the exhaust fan & wired it to the bathroom lights no issue since.

Also noticed another apartment starting to have a slight mold issue. It began when we replaced the old HW tank with an on-demand system. Water is now so hot they must be having a steam bath inside the bathroom & I found that the chrome coated shower rod started to rust from so much residual water vapor. Repainted the walls etc with 'mold suppressive' paint & again upgraded the old exhaust fan. So far it worked.

we used to pick up a couple a year at the tax lien auctions, but most were accessible if you had a skinny guy on staff that could get in. Now we are more selective.

The worst were those with flea infestations, flooded basements, burst pipes throughout & then mold remediation. 

It still astounds me the dire self inflicted living conditions some people & their children will 'survive' in. We did 'win' one at auction that I could not enter without my eyes watering & dry wretching, but the young couple I hired to gut it had no problem. When I asked her if she'd seen anything like that before she replied, "yeah my cousin lives like this now". 

Those we bought were all VERY profitable & some of the multi's we sold & hold the 12% notes on, are going on 12-15 years. We just sold a 3 unit to an investor friend, who at that close also got a discharge for a 12% mortgage on another property we sold him 10 yrs ago. Same great tenant had made all of his payments.