All Forum Posts by: Randy E.

I read most but not all of the thread, including @Jim K. responses.

My bottom line is that if everything else checked out and the price is good for you, I would not allow this to stop me from buying the property. Go ahead and ask for considerations from the seller to see if they offer something, but I would buy either way.

If a plumber is going in the walls, I'd go ahead and replace as much of the plumbing as possible. Depending on who you know, this could be a few hundred or a couple of thousand. The higher amount would not be overcharging necessarily, but longtimer owners probably know someone who will do it for less than retail cost. 

Personally, I'd rather fix as much as possible to prevent near-future problems by doing only a spot repair.

Congratulations on finding your first!

 Hi John,

There is money to be made in Henderson for an investor experienced in dealing with that type of tenant base.  Relatively speaking of course. You won't have to buy a $150K-$250K property, but on the other hand, the rent will not be $1500-$3000/month.

You've identified the first part of the equation -- the low cost of entry for an investor.  And you've identified the second part of the equation -- the overall very low SES of the tenant base.  John, you haven't yet said anything about the third part -- your ability/skill/willingness to effectively communicate and manage the average tenant you will serve as a landlord in that community.

Also, being a landlord in Henderson will likely mean being a hands-on landlord.  Especially in the beginning.  Eventually, as you become a skilled landlord in this class, you will be able to place quality long-term tenants.  If you have no experience in this class, you will probably have higher than normal turnover until you learn the necessary skills.  Landlording in general has a learning curve.  If you are unfamiliar with the lower-SES tenant that will be your tenant base, that will be an additional learning curve.

If you lived your entire life in an upper middle class lifestyle, and all your acquaintances are the same, investing in these properties in Henderson is probably not going be what you expected.  If you've had significant life experiences with the lower-SES applicants who comprise your tenant base, and you have the ability to get to Henderson often enough to self-manage, you can probably do this.

Thanks for the kind words.  I'm kind of blushing now.

But seriously, I am far from a heavy hitter. Compared to what a lot of people on BP are doing in this field, especially the other people you mentioned, I'm the creamiest of cream puffs.

@Account Closed , any update on this?

 This is a dispute between the owner/landord and the tenant.  The owner has not said there is a problem with the housing authority in this dispute.

I meant late for your post. Also, though I have been in REI for a few years now, I wish I had started long ago.

@Todd Powell, I'm 5 days late and $5 short, but congratulations!  That was a lot of hard work and a lot of well-earned payoff.

 LOL

I was giving you the benefit of the doubt before. Now I see you're just parading around on your high horse.  It's not that you're necessarily 100% incorrect.  It's that you think you're absolutely 150% right ... and you're not.

BTW, As with the others, I'm not offended by this thread. Just doing my part to inform anyone who may be discouraged by your words that if they work hard enough to educate themselves, they don't have to abandon the dream of REI just because they don't meet your personal entrance requirements. The dream is big enough for many methods.

 I would look at the bid breakdown.  The bids should not just say "Basement Conversion: $70,000". At the highest level of detail, the bid should have a detailed breakdown with the prices for each room, "Kitchen Cabinets, $XXXX; Kitchen Tile Floor, $XXX; Kitchen Drywall, $XXX; Kitchen Plumbing, $XXX".  A lower level of detail might say, "Drywall Entire Basement, $XXXX; Electrical for entire job, $XXXX; Plumbing for entire job, $XXXX".

You should be able to compare the bids to see if one is significantly different than the  others.  For instance, the plumbing on one bid might total $4000 more than the lowest plumbing estimate, and $2000 more than the highest plumbing estimate.  Or the drywall might be way too low on another estimate to be believed.  Comparing the estimates should reveal the discrepancies.  

If any of the contractors delivered an estimate without any detail you should either ask for a detailed breakdown, or simply eliminate that contractor from consideration.  Either he's too incompetent to know how to create a bid (which likely means his bid is incorrect and he grossly overestimated or underestimated his quote,) or he padded his bid and is hiding that by not including the breakdown in the bid itself.

Being a smaller company is no excuse for not providing a breakdown of the pricing.  Any contractor should be able to provide a competent estimate.

 Exactly

...

and Exactly!