All Forum Posts by: Pat L.

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. 

I lost interest in this site when I my post was deleted recommending to an OP a basement humidity idea. It did not include brand names (nor any political connotation :) ) etc but some butt hurt moderator decided it had to be deleted ???

now I rarely visit...

 ran into a kid at Home Depot this morning with 45 smoke/co detectors in his cart, so I guessed he was a LL. He explained that they have 18 buildings, but he's done with rentals taking the cash & investing in equities. He explained that the majority were in A-class neighborhoods, but the younger tenants are becoming enabled & impossible to deal with. Couldn't agree more.

As mentioned above your cost estimates are very, very conservative.

2018, we finished a 1950's era 1300 sqft Cape. Complete gut job, all new electrical, upgraded service to 150amps, all new plumbing, new HVAC, windows, doors etc etc. We went back to the studs on all lower floor walls/ceilings. Built a new master bath, added a 2nd 1/2 bath upstairs, all new kitchen with granite etc etc, plus removed a 13ft wall between the kitchen & Living Rm.

Cost of wife & I doing it ALL $65k, just for materials, permits, inspections. (I was 'permitted' to do all the work myself).

Sold it with 50% down & we hold the note for the balance @ 5.75%. Made a very nice profit complete with the added RE note annuity.

as said above you have to get rid of the HML. In the past we have been very successful in doing a lease option to buy with 10-15% down, but ours were not $450k properties. In some cases, with qualified buyers, we took the seller financing option, but short of a wrap I would assume you would need free/clear title to do so. In fact over the last 35+ years we have held many seller financed properties & have only had 1 foreclosure that we subsequently flipped for a good profit & again held the note.

that is an expensive replacement. We have done several homes 1300-1500 soft with a completely new furnace & central a/c for $5400-$7000 depending on the extra duct work etc needed for new runs. 

Then again when away on vacation I did get smoked by another HVAC company for $2300 to replace a 40gall electric HW tank with a new dedicated circuit to the panel. I could have done it myself for $475.

2nd recommendation for Hot Springs, many of our friends went with cheaper alternatives & they have since had them removed. Ours is close to 13+ years old, BUT I have replaced the main board ($400), the in-line heater ($350) myself as qualified experienced techs are tough to find. I also retrofitted the bottom drainage as the original was just cheap plastic & began to leak. Ours is in a hot tub room addition we had built, but it survived 2 winters outside because it is well insulated. We designed the hot tub room to be well ventilated & have never had any sign of mold or staining on the walls/ceilings, but I did use a commercial exterior paint on all walls & the ceiling. I ran all the 240v electric to the hot tub & it's always set to 96degF with it being adjusted higher during use, yet the electrical consumption is not noticeable.

We do not use anything other than Eco-one to treat the water, but I throw in a cup of chlorine after heavy use. Another issue is residual laundry soap in swim suits (if they wear anything) as it can generate a lot of foam, so we use a little dash of an anti-foam product to eliminate it. I cover the 5 cylindrical filters with the same Drain Sleeve filter sock used on drainage pipe. It effectively collects hair etc debris & absorbs staining from oils etc. These sleeves are washable & I have only had to replace the filters 2x since day one.

We have seen black residue in the pipes, pulsating heads in some of our friends hot tubs & also Jacuzzi type bath tubs, but our Hot Tub has never shown any such issue.

learn everything you can about electrical/plumbing/gas/HVAC. We have a neighbor's kid that did exactly that after his military stint, he teamed up with a couple of small contractors & now owns his own plumbing/HVAC company. The wife did his tax return in 2018 Gross $120k.

 agree esp in NYS.

we had a case several years ago where the tenants had disabled the smoke/CO detectors & after a fire the LL was fined I believe $10k.

In fact we have had ignorant tenants do the same if the low battery beep annoys them. 

interesting read

we have never gone into a property with less than a 16% ROI. After many years the ROI on those same properties increased significantly as rents doubled, tripled, quadrupled, as well as capital appreciation. The eventual sale & seller financing of many of our rentals then achieved more significant returns as the notes @ 9-12% were on the inflated sale price usually 2-4x our original investment. My BIL the MBA financial guru consultant, who told us we were doing everything in RE wrong, still has a hard time wrapping his mind around those returns.

Personally, I can't imagine achieving returns like that with professionally managed equities & after 40 years of JUST equities, (my still working @ 70) BIL's financial results are nothing like ours.