All Forum Posts by: Russell W.

Speaking from my experience only, as each bank might be different- I opened a HELOC on a property that I lived in. It was interest-only, 5 year term, but I moved out prior to the term expiring. Nothing happened with the loan, I just continued to pay it down. I think if you brought it to the bank's attention that it's no longer your primary residence, it would be different and they might want to convert it to a commercial line of credit at that point. Interestingly, at the end of my 5 year term the line converted to a 30 year P&I term (without me having done anything) still secured by the property, which I continue to draw from and pay down.

Of course both HVAC companies want to replace the coil- they see big $$$! It's always amazing to me, and a little sad, that some service companies don't have the integrity/decency to offer an inexpensive & easy fix for something like this.

To answer your question, yes, you can use a sealer, and they are especially effective for a pinhole leak. One product in particular, if you want to research it, is Easy Seal by Nu-Calgon. It has a chemical reaction to oxygen so when it reaches the leak it permanently seals the hole. 

Lastly, if the system is only 1 year old, it should still be under warranty, and you could have the cost covered by the manufacturer.

As others have noted, it depends on when the liens are recorded. In theory, the second position loan value (seller) could be higher than the first position loan value (bank). For example, the bank might lend 40% LTV, the seller 50% LTV and yourself the final 10%. In that scenario the seller would be putting themselves at considerable risk by taking a second position. In the event you default and the bank has to foreclose, the seller risks losing their investment if the sale of the property only produces enough for the bank to recoup their money, and nothing remaining for the other lien holder.

These are extreme examples given that a bank would be unlikely to lend on such a low LTV in the first place, and even if they did in the event of a foreclosure sale the price would most likely be able to cover the 40% LTV and more.

More likely it would be a bank at 70-75% LTV, the seller in a second position anywhere from 1-25% LTV and yourself making up the balance.

What did the service tech tell you was causing the frozen coils on the two occasions you had it serviced? There are so many variables to HVAC that can lead to problems.

To your question, I would absolutely try to get the original installer back out to diagnose the issue. That may be easier said than done. You might need (or want) to bring in a different, reputable contractor if you don't think you can trust the contractor who installed the system. The relatively small amount of money spent for another diagnostic will be money well spent. As Chris mentioned, the equipment should still be under manufacturer's warranty and you may be able to have the coil replaced, but of course unless it's the original installer you'll have to pay for the labor to do so. 

I'm in agreement that you add ducted heat/AC. I had a similar scenario in one of my properties. Originally the apartments were heated with hot water baseboard radiators and tenants used window AC units. I added ducted AC because it's standard for my market / tenant class. It didn't make sense not to add furnaces while doing that work (even though the boilers were still fully functional) so I did. Boilers can last a very long time if properly maintained, they're efficient as you've mentioned, and they're quiet (an overlooked benefit). So I actually left the boilers & radiators in place, shut off the gas valve at the furnaces, and the apartments are still heated by the boilers. All that said, boilers can be expensive to repair/replace, so when that time does inevitably come, I'll just have the tenants switch to the forced air furnaces and get rid of the boilers at that point.

To your concerns about the ductwork in the basement, depending on the layout & size of the area, you could potentially conceal some of the ducts between the floor joists overhead. When the duct run needs to go perpendicular to the joists it will obviously need to be flush with the ceiling, but you can place that run alongside a wall. That run can be oval duct which reduces the depth so you get a couple less inches of soffit encroaching into your headroom. Just some thoughts 

One furnace but multiple thermostats? Are the ducts zoned with variable dampers? My guess is that it's not, and you'll control the heat for the entire property from one thermostat. This is the best and only way to go about it (short of installing separate heating systems in each apartment). Inevitably you'll have someone complain they're too cold, and someone else complain they're too hot. This is common with buildings that have hot water/steam boilers. Will tenants be upset with the lack of control, yes, some will, but that's one of the trade offs they make for not having a gas bill of their own.

Is this a new home with a new HVAC system? If not new, how old is the system? There are so many things that could cause potential issues. What problems are you experiencing? I assume you had a contractor tell you that the entire system needed to be replaced; what reasons did they provide you? 

When did you purchase the property? Would it not make more sense to compare 2021 to 2019, given 2020 was an outlier? Your 2020 metrics are a result (mostly) of something you could not control 

Sounds like you're off to a great start. Given the books you read and the videos you watch, I imagine you've already considered this, but would a cash-out refinance into a conventional loan be an option for you? Have the increased rents and the market appreciation increased the value of your property enough to be able to pull out any amount of cash after one year? This could not only go a long way to help you cash reserves, but by refinancing into a conventional loan on the current property it frees you up to take out a new VA loan on the next property. Are you looking again in Roscoe Village, or elsewhere in the city?

Trying to understand your situation better. When you say "baseboards" are you referring to hot-water radiators with aluminum fin tubes (i.e. not the stand-up style radiators)? Are they part of the same hydronic system as the stand-up radiators? Or are you saying you have electric baseboard heaters in addition to the hot water radiators? 

There are a few things you could do, depending on what the configuration actually is. You could try relocating the thermostat closer to the areas of the apartment that are not heating adequately. But, as you mentioned, some of the rooms may end up with too much heat. If you have thermostatic valves on the radiators you can close them off a bit, and adjust as necessary until you find the right balance. Last and likely most expensive option could be to have an HVAC contractor re-size the radiators to better suit the layout / heating requirements.