All Forum Posts by: Robert Loiselle

The issue you might be having is that those test kits only test the paint they are exposed to.  It's likely that there's multiple layers of paint on the exterior and it's only seeing the top layer of paint. 

What you can do to make sure you're testing all the layers of paint is to cut a V-shaped notch through the paint down to the bare wood on a part of the exterior.  This will expose at least a bit of all the layers of paint.  Then try the test there and if there's lead paint in any of the layers, it should turn red. 

I'm a lead paint inspector in MA and we're always wary of those home test kits.  They are on the strong side and might flag levels of lead that are OK according to the law.  Inspectors use XRF machines which use radiation to detect lead paint through multiple layers of paint without having to damage any surfaces.  You could call a local lead inspector to do a determination for you which will find out which surfaces on the exterior (or wherever else you might be doing work) might contain lead paint. 

What's the ARV of the property when it's fixed up? You're probably going to have to reverse engineer his numbers to try and figure out what they are planning to make with the deal. Things you'll need to know to try and figure that out if it's a flip.

1) Their purchase price.  Sounds like 42k.  Don't forget closing costs and items like that which is probably another 3-4k

2) Do they have a loan on the property or did they pay cash?  If they have a loan, you'll need to factor in the interest they'll be paying.

3) Costs associated with a sale (ie. commissions to real estate agents and more closing costs to sell the property).  Here in MA, it's about 5% for commissions and another 1% of the sale price for closing costs. 

4) Estimated repairs...you'll need to take a best guess at this. 

Using those numbers, you should be able to try and figure out what their projected profit is and use that information to come up with a good offer.  If they're going to make 100k on the deal...then it'll be tough to make them an offer where they unload the property for a much smaller profit.  Now if the deal seems to be on the thinner side...maybe they would unload it for something close to what they paid for it.  If that's the case though, I would be careful that you have enough room in the deal to make money as well (I'm assuming this is for an investment). 

I'd try and drive by and catch them while they are at the house.  Most investors are decent people and are always interested in hearing offers (at least they should be).  See if you can talk with them and get a feel for what their plan is.  That'll give you a good idea if you have a chance or not of even buying it from them. 

Hi Jonathan. 

Congrats on getting the condo under agreement.  In Somerville...that's a feat in and of itself. 

As for painting the wood trim, we've done at least 4 or so houses where we've painted the finished wood trim white without having to scrape it (2x in our primary residences) and they've turned out really well.  There are some primers that work better than others on finished wood and allow you to get good coverage.  I forget what we've used in the past (Kilz has a product I believe), but your painter should have a good idea as to what works best. 

Scraping/sanding the surfaces will definitely allow you to get better coverage on the woodwork.  One thing I've noticed is that places that see some friction, like door edges/jambs, the paint can wear off.  But that is common without the base being finished wood. 

Personally I would just prime/paint because it'll save you a lot of money in labor and looks good.  To do it perfectly...you'd want to sand all the woodwork, but it'll be $$.  I'd want to save the money and just have to do minor touch ups in the future. 

- Rob

@Scott P. Congrats on diving into multifamily investing.  It's a wild ride!  I'm currently doing an apprenticeship to become a lead paint inspector in MA and have a provisional license with the state.  I have a bit of experience in this area.  I also own rentals and have been through deleading as a property owner.  

Please disregard what Aaron said...it's just not true that if lead paint is covered with layers of other paint...it doesn't need to be abated.  That can be true for some surfaces like a wall or ceiling, but for items like stair treads, handrails, windows (for example), that is simply not the case.  Be careful with advice from folks that don't live or invest in MA in regards to lead paint...the laws here are a lot more strict and different from elsewhere in the country.  

I agree with @Calvin Lipscomb.  Talk with the seller and see if he'd be willing to pay for abatement if lead paint is found.  If he's confident there's no lead, then he might be ok with an inspection.  Typically homeowners like to maintain the "unknown" lead status.  

To be clear, the only way you can say that there is NO lead paint in the house, is if it's been tested by a licensed lead paint inspector.  All of the records of lead paint inspections are stored in a database maintained by the state of MA.  See the link below.   

https://eohhs.ehs.state.ma.us/leadsafehomes/defaul...

If the property has been tested before, the records will show up there.  Otherwise, the seller simply cannot know if all the lead has been removed.  And with houses that old in this area, it's very rare that you don't find any lead paint.  To be clear, you can have lead paint in properties and not have to abate it.   It mainly has to be removed from surfaces that children can reach or surfaces that generate lead dust (most common cause of poisoning).  You also can't have flaking/peeling lead paint.  There's more rules than that, but it's a misnomer that a property once abated is lead free.  

Sorry for the info dump, but feel free to reach out with other questions.  Happy to help.  I'm working with a great lead inspector on my apprenticeship that I could recommend if the current owner is OK with moving forward with the inspection.  Good luck! 

@Tim Upton...if you need an inspector, I have a great one that I'm training with.  Good guy and reasonably priced. 

How's the condition of the paint overall in the house?  Do you have vinyl replacement window?  These are the biggest items that drive up the cost of deleading. 

There are 4 defined types of lead hazards. 

1) Loose/flaking lead paint.  You can have lead paint present in the house and as long as it's intact...you don't have to abate it (Ex. all the ceilings have lead paint but are in good shape...you can leave those alone).

2) Accessible/Mouthable Surfaces.  These are window sills hand rails, and railing caps that are 5ft or lower from the floor or stairs.  These surfaces, if they contain lead need to be abated because they're surfaces that children can access or put their mouth on.  NOTE:  These surfaces can be encapsulated which can be cheaper in some instances versus sanding/scraping or replacing.

3) Moveable/Impact Parts.  This is basically windows.  Old wooden windows with lead paint on them generate a lot of dust when opened/closed.  These need to be removed if they have lead paint.  This can add up if you have a house full of them and they need to be done by a deleading contractor. 

4) Friction surfaces.  These are door edges, door jambs, and stair treads.  These surfaces are typically scraped but you could also replace them based on cost estimates. 

Hey Tim, 

I'm currently in the process of becoming a licensed lead paint inspector in the state of Mass and am starting the last phase which is the apprenticeship.  I've gone through the required class trainings and have passed the state exam.  So I'm not 100% official yet, but I think I can get you pointed in the right direction.  There's a lot in your post and to cover on this topic, but I'll try to hit the major points.  FYI...I also own rental property in MA.  

Congrats on the purchase!

First step would be to look the property up on the MA Lead Paint Database (https://eohhs.ehs.state.ma.us/leadsafehomes/defaul...).  This database keeps track of all properties that have been tested and abated.  It's always good to check on a property you're interested in to see if it has any history.  I'm going to assume that it doesn't and it has never been tested.  

Like you allude to, with the age of the housing stock in MA, it's more likely than not you'll find lead paint.  I'm not sure where you got some of your information, but some of it is right and some of it is leading you astray.  First...let's cover the law.  

In MA, property owners are REQUIRED to bring a property into a lead safe condition (called compliance) if a child under the age of 6 resides in the house/apartment.  If a child under 6 is poisoned in a property you own, you are 100% liable under MA law.  It's called strict liability and it's what gives the MA lead paint laws such big teeth.  We have the strictest lead paint laws in the country.  

Good news tho, the State of Mass just made a major revision to the lead paint laws that went into effect on Dec 1, 2017. One of the keys for landlords is that the new rules significantly lower the number of surfaces that have to be deleaded...which lowers the cost of abatement compared to the law pre-12/1/2017. 

As for your property, I don't know how a deleading contractor can give you a quote without an inspection report.  Only MA licensed lead paint inspectors can perform an initial inspection which will determine what, if any, lead hazards are present in the house.  The cost of this can vary quite a bit based on a number of factors, but especially if the property has older wooden windows (it can take a while to test all their components).  My guess, would be it'd cost between $750-1250 to do the initial inspection.  One thing you have going for you is the apartments are vacant which makes the testing a lot easier.  

After that, you can give the report to any deleading contractor and they should be able to give you a quote based on what's found.  It's really hard to come up with a cost because it really depends on what work needs to be done.  I had a single family I own done last summer and it cost me $1500 to scrape a bay window sill, an exterior door edge (on 3 sides), a threshold, and have 4 basement windows covered/wrapped.  Something to note is that not all work requires a deleading contractor.  Scraping and replacing windows (called high risk deleading) are examples of work that would require a deleading contractor.  Things like covering a wall with drywall if there's flaking lead paint is something a low or moderate risk authorized owner could do.  You just need to do some reading and/or a class plus some tests to get certified.  It depends on the hazards that are found but can save you some money.  The inspector can give you a lot of the options you have.  

The contractor you talked to is right when he says cleaning is a major part of the work they do.  To get a letter of compliance after deleading work is done, the lead paint inspector needs to come back and take dust wipes, which are sent to a lab to make sure there isn't high levels of lead paint dust left behind.  The main focus is rooms where work was done, but other rooms are also tested during this process.  After those dust wipes pass, you get your letter of full deleading compliance.  

You did get good advice on NOT doing the work yourself (if not authorized) or not having a properly authorized deleader do the work.  If the work is done as a deleading activity and not as regular renovation, an inspector is required to call this out on their report which can be flagged as "unauthorized deleading."  If the state deems the work to be unauthorized deleading, it can prevent the property from ever being able to get a letter of compliance.  Just be careful.  

Sorry...I know that's a lot of information, but there's a ton of topics to cover on this to make sure people get going in the right direction.  If the property is one that makes sense for families to rent, if I were you I'd really think about getting it tested and deleaded.  I know with the single fam that I own, it gave me a lot of piece of mind when getting it listed.  It also helps the value of your property.  

One last thing in terms of cost...MA does offer up to a $1500 tax credit per unit for work done towards deleading, so you'd be eligible for up to 3k in MA tax credits.  It's not going to take the biggest chunk out of the cost, but it's a little be that helps.  

Hope that helps Tim.  Feel free to fire back with other questions you might have. 

Rob

Hey BP, 

About to close on our first rental property, which is a 3-family in Peabody.  The house is coming with two of the units already rented and those leases both expire at the end of June 2017.  

We want to train our tenants and provide them with a new list of rules and regulations.  The previous owner was a bit more lax and lived out of state, we want to be fair, but show them that this is a business.  

Can you have them sign a new set of rules and regulations when you inherit tenants and their leases?  I ask because typically the rules/regs are part of the lease documents and there are some rules and regulations covered in their current lease.  

I'm assuming you can't change things like late fees or utilities, but may be able to change rules in regards to parking and other items like that?  

Any insight would be great.  We really appreciate the help.  

Hello BP, 

My wife and I are buying a house from my wife's aunt and she's giving us a great deal. We're getting the house for 300k and it's most likely worth around 375k or possibly more. I'm starting to lean towards doing a gift of equity so we can avoid having to put much money in this deal and still avoid PMI. We'll also be able to get a much better rate. We want to save our cash for other deals.

I have some questions on this type of transaction because I don't want to saddle my aunt-in-law with extra tax burden by doing this.  

I would imagine that the IRS will still enforce a tax based on the FMV or assessed value of the home (ie. if she was selling us the house for a dollar). If that's the case...and if the house is worth 375k or more (let's hope!), then I really don't see a downside of taking as much equity as possible as a gift. Is there something that I'm missing? Based on what I've been able to find online, it sounds like a gift tax is going to be assessed no matter what and it'll be calculated based on the true value of the house.

Any info or experience you folks can offer is much appreciated.  

Thanks for the help!

- Rob

Hello fellow BP'ers

I was wondering if anyone knew where to find statistics or raw data for foreclosures/auctions/REOs in the MA and NH areas.  I've seen a few companies (like the Warren Group) but I haven't used them and am not sure if there are better options out there.  

My guess is that most of this information comes at a price.  Ideally...if there's free data, that'd be fantastic, but I'm willing to spend some money for solid information.  

I appreciate the help

- Rob

Hello, 

My wife and I are actively studying and getting our plan together to get into real estate investing.  I was hoping to pick the brains of the folks on this forum and to get some help and critiques on our initial strategy.  Apologies if this is a little long winded.  

We're in a pretty good position to start.  We currently rent from my wife's aunt in a town just north of Boston (Medford).  Her aunt doesn't want to hang onto the place and is going to sell it to us.  It's a small single-family Cape (currently 4bd, 1ba), right next to the proposed subway extension (planned in the next 5-7 years), and we're getting a great deal.  The market is a little crazy in this part of the Boston suburbs and I'm estimating that we're getting roughly 60-70k in equity in the discounted sales price...maybe a little more.  

Our plan right now is the following. 1) Put a dormer on the back in order to add a 2nd full bath. 2) Redo the 1st bath (old 50's styling). 3) Update kitchen/living area. In the end we're hoping to have a 4bd, 2ba with a small yard and parking for 4 cars in a very desirable area near a college and public transportation. My estimate on the PITI is ~2300/mo. The rent I think we can command initially is around 3300-3500/mo. When the train comes in...4k/mo is very doable.

Our next move is to buy a 3-fam in an down (but poised for growth) area further north of Boston.  We'll live in one apartment and rent the other two.  Assuming decent rents and we get a good deal...we should be living for somewhere between 500-1000/mo in payments.   

In terms of buying the 3-family, we're thinking of using a home-equity loan from the first place and some cash for the down payment.  I've even debated a 401k loan.  

After this...I'm sort of stuck.  I really like the buy and hold strategy...it just takes capital up front or tremendous leveraging.  We're debating flipping to try and generate the cash to purchase the properties we'd like to hold.  

I appreciate you folks taking the time to read this.  Any holes you can poke in the initial first two moves would be great and any suggestions on how to proceed after this would be great.  

Thanks, 

Rob