All Forum Posts by: Josh Sterling

Eric,
I have lowes $2 sq ft carpet with .80c pad in my own house. It is a little nicer than the cheap stuff but not too noticeable. Our rentals are in a lower-middle class neighborhood, however we do complete remodels (probably way too nice for most any market) I have never had a single complaint on the carpet. About ~60-65k ARV
Next time you are at lowes check out the rolls of carpet in the back of flooring. It's usually ~.95c before QSP discount

Jon,
I buy all my carpet at lowes. I also buy all my other rehab materials, so I use the QSP program (works for any order over $2500) I am typically paying .22c for pad and .80c per sq ft for carpet. I have in installed by a local guy who charges an avg of .40c per sq ft including stairs. I figure $1.50 sq ft for carpet installed (includes waste) and have yet to find a better deal.

As for the $97 install, those are for the stain master and higher end carpet and usually you will be into it for $2.25+ per sq ft just in material.

Hope that helps

@Brian,
I'm shifting to that strategy myself. We always start out with a 12 month minimum lease. After that I am letting it revert to month-to-month for the following reasons:
1) I have realized that a lease does little to "hold" a tenant in a property, if they want to leave they are going to. The lease locks the landlord into all kinds of terms, but I doubt there have been many cases where a landlord has been able to recover costs for a broken lease. If you start with a 12 month lease and they are good tenants then great, but if they are bad tenants you can terminate the tenancy with 30 days notice and be rid of the problem.
2) The President of our REIA firmly believes, and I agree, that each time you go sign a new lease it just reminds the tenant of how long they have been renting from you. my goal is to have as many long term tenants as possible, so I don't want to continuously remind them of how long they have been renting one of our properties.

Aren't you required to 1099 someone who worked for you as a contract employee? As opposed to having a W-2 employee?

I had a contractor do 10k plus worth of labor for me on several different properties. I sent him a 1099 as he is a sole proprietor. Is that correct?

Will B. I think you are talking about neat reciept. I'm thinking about trying it out, wodering if anyone here has any experience with it?

We haven't even mentioned it in any of our offers, that's the funny part

I was looking over a few of our recent HUD statements and noticed that about half the time the seller is paying the closing fee and the other half of the time we are. These are all REO properties. All cash purchases. Reference HUD line 1101, settlement or closing fee

Who normally pays this fee?

I thought prime was 3.25% right now?

We have a couple private money loans to our LLC currently. These are all from family/friends. They are not tied to any individual property, however we did give a personal guarantee. We make a loan for about 30k (enough to purchase a house in our market) and make the repairs with our own funds. We pay 8% on a 20yr. Term and allow the lender to call the loan due at any point with 12 months notice. They love this because it is like a 12 month CD to them, and we feel comfortable that we can generate the funds within 12 months if needed, either through cash flow or the sale of the property of our choosing. The key is to avoid getting too much financing with the same 12 month option, as to avoid a run on funds.

This year we purchased several bank owned properties requiring moderate rehabs. We spent 12-30k on each house to get it to an above market quality for rent. This rehab amount includes:
Contractor Labor, carpet, paint, doors, windows, appliances, tile, siding, driveways, etc.

I have logged all expenses in an excel spreadsheet, and came up with a total for each individual rehab.

My question is: Do I just get to add that total to my cost basis in the property and depreciate it over 27.5 yrs, or do I get to devide things into their specific recovery periods (5, 7, 15, 27.5 yrs) and depreciate them using their faster recovery periods?

Disclaimer- I will end up doing what our accountant advises, I'm just trying to do a little pre planning before we take our tax paperwork to him, and it's nice to get a discussion going to learn from everyone on BP :)

Thanks,

SR