All Forum Posts by: Sarah Hammeken

Hi Stevie,

Oh yes, I’ve bought five old houses and learned a ton along the way! One key lesson is to always prioritize a thorough inspection—and go beyond the basics. Here's what I've learned:

1. Inspections Are Non-Negotiable: Always get a full inspection, but don’t stop there.
   • Plumbing & Sewer: Have the plumbing and sewer systems checked specifically, as these are common problem areas in older homes.
   • Electrical System: If the inspector flags any electrical concerns, bring in an electrician during the inspection phase for a detailed evaluation. (Inspectors are generalists, so specialists are essential for plumbing and electrical issues in older homes.)
   • Structural Concerns: If potential structural damage is spotted, hire an engineer to assess it properly.
2. Be Diligent and Proactive: Old homes often require extra due diligence. Inspections may cost more upfront, but they can save you from significant headaches and unexpected expenses down the road.
3. Negotiate Hard: Use inspection findings as leverage.
   • If the HVAC is near the end of its life, negotiate a credit for its replacement.
   • If the cast iron plumbing is deteriorating and needs replacement, ask for a credit as well.
   • Sellers often prefer negotiating credits over doing the work themselves.

To give you an example: I was once under contract for an old house priced at $170,000. During the inspection, I uncovered so many issues that I negotiated the price down to $105,000. The inspections alone cost me $1,300, but that upfront investment saved me tens of thousands of dollars and spared me countless headaches.

In short, buying older homes requires more diligence and negotiation, but when done right, it can be incredibly rewarding. If you have any specific questions, feel free to ask—I’m happy to help! 

Best 

Sarah 

Quote from @Joe S.:

Quote from @Sarah Hammeken:

Quote from @Joe S.:

Quote from @Sarah Hammeken:

Hi all, 

So, I had been looking for a good deal in Columbia, TN for months, but everything I found just didn’t work on paper. Then, at a REIN meeting, I met a wholesaler who told me about a property in the area I was looking at that had tons of potential. The catch? The showing was the next day, and it was the last chance to put in offers—plus, there were a lot of other investors interested. 

The Showing: A Quick Decision with My Contractor 

I decided to go for it and showed up early with my contractor to check out the house. It was a 3-bed, 2-bath with a new roof, updated plumbing, electrical, and HVAC—basically all the expensive stuff was done. But the cosmetic work? It was terrible. Walls were uneven, the floors had gaps, and everything was super shoddy. Another investor had tried to flip it at $280k, but after a few price drops, it wasn’t selling. Now, it was rented out, with the tenant promised to vacate once it sold.

The Offer: Bidding War and a Slight Overbid 

The wholesaler wanted $180k for it. After talking it over with my contractor, I figured with about $19k in cosmetic work, I could push the ARV to around $250k. But there were other investors at the showing, so I had to go in a bit higher to beat them. I landed it at $181k—feeling good, right? Yeah, that didn't last long. My plan was to rent it out long-term, with plan B being to flip it. Either way, I felt good about taking on the house with multiple exit strategies.

The Tenant’s Exit: A Costly Move 

The tenant left as agreed—but not without causing some damage. They took all the appliances (goodbye stove and fridge) and left the place a total disaster. On top of that, they decided to sabotage the plumbing by dumping gallons of cat litter in the tub drain. I called the wholesaler’s company for help, but my rep had left the company (I was his last client). They claimed they didn’t have the tenant’s info and couldn’t help. Now I was stuck with the bill for the stolen appliances and plumbing issues, which cost me an extra $3,000. But I was still determined to make it work.

Surprises in the Rehab: Foundation, Plumbing, and Electrical Issues 

Things really started going sideways once the contractor began replacing the floors. We discovered structural issues that needed an engineer and $10,000 worth of foundational work to fix. Then we found plumbing problems that set me back another $5,000. And just when I thought it couldn’t get worse, tearing out the poor drywall that had been installed revealed illegal electrical wiring that needed to be completely redone. Another $10,000 down the drain.

Setbacks: Flood Damage Adds to the Costs 

By this point, I was into the property for $19,000 plus the additional $28,000 in repairs, and things were starting to look pretty good, and the house was almost finished (yay). But then my contractor took a couple of weeks off to help another client because he was behind schedule from my lengthy rehab. When he came back, the house was completely flooded. Someone managed to flood the back of the house by turning on the water. I never figured out who did it—maybe an angry neighbor that were tired of months of construction noise, or maybe the old tenant—but either way, we had to replace the brand-new floors. It cost me an extra $6,000 in damage and 10 days to wait for floor materials that were out of stock (of course). All in all, the rehab cost me $60,000 including the looong holding costs instead of $19,000. 

A New Strategy: Mid-Term Rental and Furnished Setup 

With all my backup plans shot, I had to come up with something else. Just before all this, I had furnished a DADU at my house, planning to rent it out furnished. Then, my neighbor’s retired dad asked if he could rent it—but he wanted to bring his own furniture. I hesitated at first, but then I realised this extra set of furniture could be my solution. 

The Solution: Turning the Columbia Property into a Mid-Term Rental 

I decided to turn the Columbia house into a mid-term furnished rental with the furniture from the DADU. I reached out to local companies that house project workers coming in for 6+ months. Within four days, I had a tenant for $2,500 a month. The property went from cash flow negative as a long-term rental to bringing in $600 a month in cash flow, and I had hit the 1% rule. Despite the big headaches, it all worked out in the end, and I've learned a ton...

Key Takeaways: 📚

1. 1) Always be ready for the unexpected: This deal taught me to expect the worst—and still keep pushing forward. You can find a solution 💪
2. 2) Change the locks ASAP: As soon as you take over a property, don’t wait to change the locks. 🗝️
3. 3) Don’t rush a buy: Bring in experts for plumbing, electrical, etc., to do your due diligence. 🔍
4. 5) Be flexible and adjust your strategy: When things go sideways, don’t be afraid to pivot. I switched from long-term rental to furnished mid-term rental, and it paid off.  🔄
5. 6) Always have multiple exit strategies: Things can go completely sideways, so be prepared. 🛣️
6. 7) Expect rehabs to cost more than planned: Have a buffer in your budget—trust me, you’ll need it! 💵

 Would you be responsible for the utilities or would the tenant be?

 Hi Joe, It depends. Many midterm rental landlords have utilities included (me including) others make the tenants pay if they are staying more than 6 months. I pay for mine tenants utilities with a cap - meaning if they go above a certain amount I have their credit card on file and charge. But until now that has not been necessary to do. Best Sarah 

 As long as you have a cap for utilities, that would help the renter to be more thoughtful when it comes to usage. What kind of cap do you have? 

 I just googled "average usage of electricity and water for X persons (in my area)", and then I entered that cap amount in the lease:-) Easy peasy. Most midterm renters are hardly home so they use way less than what I used doing the rehab and none have so far exceeded the cap. 

Quote from @Alex Hileman:

Good for you for adjusting so many times and not getting discouraged. That's a lot of bad surprises but you made the most of it!

I am curious about the local companies that you found that house project workers. How did you find them, and what did you look for?

I did several different things: I drove by new construction sites in the area, approached the workers, and asked for their foreman to inquire about housing needs. During the rehab process, I worked with various subcontractors, so I followed up with those companies as well. Additionally, I connected with a local real estate investor who rents furnished rooms exclusively to traveling female nurses. We agreed to refer clients to each other if they didn’t fit our respective criteria. We have an absolutely awful extended-stay motel here in Columbia, so I also visited it in the evening, looking for trucks with company logos. My plan was to call the companies directly to see if they needed housing.Interestingly, my first renter came through a contractor’s wife I met outside the motel. Frustrated with the conditions at the motel (she visited him every weekend), she took my contact information and pictures of the property, and by the next day, her husband’s company called to request the rental:-) 

Quote from @Joe S.:

Quote from @Sarah Hammeken:

Hi all, 

So, I had been looking for a good deal in Columbia, TN for months, but everything I found just didn’t work on paper. Then, at a REIN meeting, I met a wholesaler who told me about a property in the area I was looking at that had tons of potential. The catch? The showing was the next day, and it was the last chance to put in offers—plus, there were a lot of other investors interested. 

The Showing: A Quick Decision with My Contractor 

I decided to go for it and showed up early with my contractor to check out the house. It was a 3-bed, 2-bath with a new roof, updated plumbing, electrical, and HVAC—basically all the expensive stuff was done. But the cosmetic work? It was terrible. Walls were uneven, the floors had gaps, and everything was super shoddy. Another investor had tried to flip it at $280k, but after a few price drops, it wasn’t selling. Now, it was rented out, with the tenant promised to vacate once it sold.

The Offer: Bidding War and a Slight Overbid 

The wholesaler wanted $180k for it. After talking it over with my contractor, I figured with about $19k in cosmetic work, I could push the ARV to around $250k. But there were other investors at the showing, so I had to go in a bit higher to beat them. I landed it at $181k—feeling good, right? Yeah, that didn't last long. My plan was to rent it out long-term, with plan B being to flip it. Either way, I felt good about taking on the house with multiple exit strategies.

The Tenant’s Exit: A Costly Move 

The tenant left as agreed—but not without causing some damage. They took all the appliances (goodbye stove and fridge) and left the place a total disaster. On top of that, they decided to sabotage the plumbing by dumping gallons of cat litter in the tub drain. I called the wholesaler’s company for help, but my rep had left the company (I was his last client). They claimed they didn’t have the tenant’s info and couldn’t help. Now I was stuck with the bill for the stolen appliances and plumbing issues, which cost me an extra $3,000. But I was still determined to make it work.

Surprises in the Rehab: Foundation, Plumbing, and Electrical Issues 

Things really started going sideways once the contractor began replacing the floors. We discovered structural issues that needed an engineer and $10,000 worth of foundational work to fix. Then we found plumbing problems that set me back another $5,000. And just when I thought it couldn’t get worse, tearing out the poor drywall that had been installed revealed illegal electrical wiring that needed to be completely redone. Another $10,000 down the drain.

Setbacks: Flood Damage Adds to the Costs 

By this point, I was into the property for $19,000 plus the additional $28,000 in repairs, and things were starting to look pretty good, and the house was almost finished (yay). But then my contractor took a couple of weeks off to help another client because he was behind schedule from my lengthy rehab. When he came back, the house was completely flooded. Someone managed to flood the back of the house by turning on the water. I never figured out who did it—maybe an angry neighbor that were tired of months of construction noise, or maybe the old tenant—but either way, we had to replace the brand-new floors. It cost me an extra $6,000 in damage and 10 days to wait for floor materials that were out of stock (of course). All in all, the rehab cost me $60,000 including the looong holding costs instead of $19,000. 

A New Strategy: Mid-Term Rental and Furnished Setup 

With all my backup plans shot, I had to come up with something else. Just before all this, I had furnished a DADU at my house, planning to rent it out furnished. Then, my neighbor’s retired dad asked if he could rent it—but he wanted to bring his own furniture. I hesitated at first, but then I realised this extra set of furniture could be my solution. 

The Solution: Turning the Columbia Property into a Mid-Term Rental 

I decided to turn the Columbia house into a mid-term furnished rental with the furniture from the DADU. I reached out to local companies that house project workers coming in for 6+ months. Within four days, I had a tenant for $2,500 a month. The property went from cash flow negative as a long-term rental to bringing in $600 a month in cash flow, and I had hit the 1% rule. Despite the big headaches, it all worked out in the end, and I've learned a ton...

Key Takeaways: 📚

1. 1) Always be ready for the unexpected: This deal taught me to expect the worst—and still keep pushing forward. You can find a solution 💪
2. 2) Change the locks ASAP: As soon as you take over a property, don’t wait to change the locks. 🗝️
3. 3) Don’t rush a buy: Bring in experts for plumbing, electrical, etc., to do your due diligence. 🔍
4. 5) Be flexible and adjust your strategy: When things go sideways, don’t be afraid to pivot. I switched from long-term rental to furnished mid-term rental, and it paid off.  🔄
5. 6) Always have multiple exit strategies: Things can go completely sideways, so be prepared. 🛣️
6. 7) Expect rehabs to cost more than planned: Have a buffer in your budget—trust me, you’ll need it! 💵

 Would you be responsible for the utilities or would the tenant be?

 Hi Joe, It depends. Many midterm rental landlords have utilities included (me including) others make the tenants pay if they are staying more than 6 months. I pay for mine tenants utilities with a cap - meaning if they go above a certain amount I have their credit card on file and charge. But until now that has not been necessary to do. Best Sarah 

Hi Meir, 

Thank you! I'm self-managing this MTR and another one of mine.  Let me know if you have any questions to that. It's fairly simple once you have it figured out:-) 

Best 

Sarah 

I guess it depends on your risk tolerance and your ability to find a better deal than the one you already have with the equity you are pulling out. You say you are new to flipping so maybe consider teaming up with someone more experienced for your first flip to increase your success rate?  Also you have locked in to a low rate and currently have a decent cash flow. So another solution is to save up for another deal with your cashflow + savings, and pull money out when/if the interest rate gets lower? I know its a longer play, but that would I consider if I was you:-)  

Thanks @Warren Powers I felt like a complete failure going through all of this but I'm grateful for everything I've learned. Good luck to you too:-) 

Hi all, 

So, I had been looking for a good deal in Columbia, TN for months, but everything I found just didn’t work on paper. Then, at a REIN meeting, I met a wholesaler who told me about a property in the area I was looking at that had tons of potential. The catch? The showing was the next day, and it was the last chance to put in offers—plus, there were a lot of other investors interested. 

The Showing: A Quick Decision with My Contractor 

I decided to go for it and showed up early with my contractor to check out the house. It was a 3-bed, 2-bath with a new roof, updated plumbing, electrical, and HVAC—basically all the expensive stuff was done. But the cosmetic work? It was terrible. Walls were uneven, the floors had gaps, and everything was super shoddy. Another investor had tried to flip it at $280k, but after a few price drops, it wasn’t selling. Now, it was rented out, with the tenant promised to vacate once it sold.

The Offer: Bidding War and a Slight Overbid 

The wholesaler wanted $180k for it. After talking it over with my contractor, I figured with about $19k in cosmetic work, I could push the ARV to around $250k. But there were other investors at the showing, so I had to go in a bit higher to beat them. I landed it at $181k—feeling good, right? Yeah, that didn't last long. My plan was to rent it out long-term, with plan B being to flip it. Either way, I felt good about taking on the house with multiple exit strategies.

The Tenant’s Exit: A Costly Move 

The tenant left as agreed—but not without causing some damage. They took all the appliances (goodbye stove and fridge) and left the place a total disaster. On top of that, they decided to sabotage the plumbing by dumping gallons of cat litter in the tub drain. I called the wholesaler’s company for help, but my rep had left the company (I was his last client). They claimed they didn’t have the tenant’s info and couldn’t help. Now I was stuck with the bill for the stolen appliances and plumbing issues, which cost me an extra $3,000. But I was still determined to make it work.

Surprises in the Rehab: Foundation, Plumbing, and Electrical Issues 

Things really started going sideways once the contractor began replacing the floors. We discovered structural issues that needed an engineer and $10,000 worth of foundational work to fix. Then we found plumbing problems that set me back another $5,000. And just when I thought it couldn’t get worse, tearing out the poor drywall that had been installed revealed illegal electrical wiring that needed to be completely redone. Another $10,000 down the drain.

Setbacks: Flood Damage Adds to the Costs 

By this point, I was into the property for $19,000 plus the additional $28,000 in repairs, and things were starting to look pretty good, and the house was almost finished (yay). But then my contractor took a couple of weeks off to help another client because he was behind schedule from my lengthy rehab. When he came back, the house was completely flooded. Someone managed to flood the back of the house by turning on the water. I never figured out who did it—maybe an angry neighbor that were tired of months of construction noise, or maybe the old tenant—but either way, we had to replace the brand-new floors. It cost me an extra $6,000 in damage and 10 days to wait for floor materials that were out of stock (of course). All in all, the rehab cost me $60,000 including the looong holding costs instead of $19,000. 

A New Strategy: Mid-Term Rental and Furnished Setup 

With all my backup plans shot, I had to come up with something else. Just before all this, I had furnished a DADU at my house, planning to rent it out furnished. Then, my neighbor’s retired dad asked if he could rent it—but he wanted to bring his own furniture. I hesitated at first, but then I realised this extra set of furniture could be my solution. 

The Solution: Turning the Columbia Property into a Mid-Term Rental 

I decided to turn the Columbia house into a mid-term furnished rental with the furniture from the DADU. I reached out to local companies that house project workers coming in for 6+ months. Within four days, I had a tenant for $2,500 a month. The property went from cash flow negative as a long-term rental to bringing in $600 a month in cash flow, and I had hit the 1% rule. Despite the big headaches, it all worked out in the end, and I've learned a ton...

Key Takeaways: 📚

1. 1) Always be ready for the unexpected: This deal taught me to expect the worst—and still keep pushing forward. You can find a solution 💪
2. 2) Change the locks ASAP: As soon as you take over a property, don’t wait to change the locks. 🗝️
3. 3) Don’t rush a buy: Bring in experts for plumbing, electrical, etc., to do your due diligence. 🔍
4. 5) Be flexible and adjust your strategy: When things go sideways, don’t be afraid to pivot. I switched from long-term rental to furnished mid-term rental, and it paid off.  🔄
5. 6) Always have multiple exit strategies: Things can go completely sideways, so be prepared. 🛣️
6. 7) Expect rehabs to cost more than planned: Have a buffer in your budget—trust me, you’ll need it! 💵

Hi Jordan, great! How can I get in touch with him/her? 

Br

Sarah

Hi,

We are a Danish couple living in Denmark. We own and rent out a house in Detroit, MI and have an american salary. 

We are looking in to buying more houses.  

BUT before we need a (individual) CPA ASAP that can support us with the tax (from the real estate and the US salary).

I hope someone can help with a referral. 

Would be greatly appreciated. 

Br, 

Sarah