All Forum Posts by: Russell W.

You should be clear with the seller as to your intentions to refinance at some point, but definitely amortize for as long of a period as possible. Perhaps you could agree on a short term at a higher interest rate. Or, to give yourself some wiggle room on the turnaround time for renovations, a longer term at a lower interest rate but with a pre-payment penalty that decreases each year. For example, 30 year Am., 3 year term; refinancing after one year incurs a pre-payment penalty of 2%. After two years, 1%. Three years, nothing. That way the seller gets some sense of assurance that they're either in it for 3 years of interest, or earlier with an additional penalty payment. You get the flexibility of refinancing when you need to, and are upfront an honest with the seller as to what you plan to do. Just some thoughts. 

If there is a vacant unit, or there will be one soon after closing, what you could do is a leap-frog type of plan where you renovate one unit at a time, starting with the vacant unit. Once that is renovated and ready to rent, you can give first choice to rent it (at the new, higher rate) to one of the tenants already living in the building. It should be easier to justify a higher rent when they can actually see the improvements. If/when they move out of their unit into the newly renovated unit it then allows you to get into their previously unit and renovate it, and on and on and on. This assumes you only do one at a time (which it sounds like maybe you want to do?) 

To add to the list:

-Have tenant provide evidence of renter's insurance, if you require it

-Take pictures of the apartment, both yourself and the tenant

Agreed with Kathy that your initial contact with the owner should not mention the price you are willing to pay, rather that you are simply interested in purchasing the property. You need expense and income information to be able to accurately value the property. That said, you don't want to base your offer on what the space "could" rent for. Your offer should reflect the fact that it is empty and you will need to do the legwork to get it leased.  Take your time, build rapport with the owner and be patient. Even if she isn't ready to sell now, you very well might get that call in the future. 

Listen to podcast number 111. It's an older one, but one of the first they did on mobile homes so it's pretty interesting. The guest tells about a deal he did with 100% owner financing too. 

Agreed with all that the wood post should be bearing on top of the concrete. If, for some reason, this can't be done, you could use a fiber or rubber expansion board to create a bond-break between the wood and concrete.

I have experience with cellular concrete in a commercial application as mass-backfill (15,000 cubic yards) for a newly constructed building where existing soil bearing pressures were poor. True cellular concrete does not have nearly the compressive strength you are looking to achieve, with 28 day breaks closer to 300-400 psi, rather than the 2,500 that you're looking for. As you noted, cellular concrete is essentially just cement, water and the foaming agent. To achieve higher psi's you'd need to introduce course and fine aggregates. At that point you're getting into what would be considered "lean concrete", which of course becomes heavier. Cellular concrete, while extremely light, is rather brittle (for lack of a better term) and breaks apart like chalk. 

Not sure if you're taking this on yourself or if you're hiring someone to do it, but just know concrete counter tops are challenging to get right, as Joe mentioned. If you're determined to use concrete, ensure either you or your installer is using fiber reinforcing or wire mesh reinforcing. Concrete cracks, there's no way around it. The use of fibers or mesh will minimize the severity and frequency of the cracks. You'll also need to apply a penetrating sealer. Concrete is porous and will otherwise absorb liquids and possibly stain. 

You mention resale appraisal, but also that you plan to rent the house or do air-bnb. If considering selling, then yes, either option will affect resale value, either positively or negatively. If considering holding and renting, then in my opinion you should go with what is more cost effective. The tenants won't care what type of system you have, just that they are comfortable.

How is the first floor heated? You mention no ductwork on the first floor. Do you have radiant heat? If so, and you are keeping the current heating system and looking to only update cooling, you should look into high-velocity air conditioning. It works very well in older house or houses that are not suited for a traditional ducted system. 

Are you planning on keeping the radiators? One disadvantage of mini-splits is their inability to work effectively at extreme low temps, which we are bound to get a handful of times in Chicago.