All Forum Posts by: Stephen Shelton

Branching from what Izabella said, consider getting a cheap tool or one from Harbor Freight when you don't know what you want and renting is unfeasible. 

I didn't know what I didn't know about tile saws until I bought a basic unit and kept running into problems from things it wasn't designed to handle. I upgraded and sold the basic unit on Craigslist. 

But eventually you're going to need to cut out an "L" or cut a slice that's too thin for a tile cutter.

They are clever tools, though, for what is the most common tile cut.

I mentioned a single-LLC setup but he said that that would leave my houses just as vulnerable since they exist in the same corporate entity. He stated that with the costs of the LLC setups (especially the multi-LLC setup) that it would have it's own costs as you stated and extra costs with managing the accounting. He stated that an umbrella policy would be cheaper and easier... but it never occurred to me that the insurance company would find a way to wiggle out of it.

I think I misunderstood my accountant back then. I have another at the firm now and he had no idea what that could possibly be: the accountant that had told me this a few years ago was in his office meeting a client, so we couldn't ask. I ended up doing some phone tag with him to get some clarification, but honestly I forgot about it until reading your response.  Apparently it was nothing and I must have misunderstood him.

An amusing sidenote. My prospective HELOC lender is apparently doing a deep dive on my assets, and the lender to one unrelated property has sent me a text, 2 emails, and a voicemail that basically covers to "OMG don't divorce me!" because they think I'm trying to refinance this loan. The other unrelated property I have is like the proverbial honeybadger who doesn't give a *achew* because I haven't heard a peep from them.

The funny thing is that this in no way affects the business I have with them!

I ended up going with Space Coast Credit Union and am now deep in the process of getting it. The property has no mortgage, has a Zillow value of $135,000, and I have a 807 FICO score but could only get $74,000

The appraisal will cost roughly $450 and the terms are a fixed 4.50% for 3 years and then a variable 1/4 point below prime after that.  They had a similar one with 1.99% fixed for 1 year, but the one I chose seemed safer since I expect to use it for short-term purposes.

Obviously this is on the low side, but my loan originator from my previous properties has a new mortgage product that is designed for property investors where the projected rent is used in calculating your approval.

Details:

* Cited they want 15%-20% down (hence the value in getting the HELOC)

* Distressed properties can be bought but you must put funds into an escrow account for a little more than the expected cost of repairs. So if the house needs a new $10,000 roof you'd have to put $11,500 our so in. HELOC can supply that)

* He ballpark-figured a fixed APR in the upper 5s.

I contacted him to see if it was ok to broadcast his info.  He is Nate Morris at Waterstone Mortgage in central Florida.

Website: 

https://winterpark-fl.waterstonemortgage.com/NathanMorris.html

Well, my HELOC pursuit has not been very productive. One source approved me for $53K, and the next approved me for $50K but that one is going to see if there's any way to get that increased. Either way it seems like it won't be enough to accomplish what I would need to buy another property.

The house I chose to use for equity is valued at $135K online and has no mortgage on it. I have a personal loan by family on it, but whenever I tell the lenders about it they act like they couldn't care less. I suppose that's because, legally, they'd be first in line if I need to sell the property. It looks like ~40% is the most I can get out of it 

My real estate agent has another idea that I'm going to try next.

My AC expert tenant in Property #2 came to Property #1 for routine AC maintenance, and he showed off his new gadget a FLIR camera tool that connected to his iPhone.

BTW: A FLIR camera sees the world based on the temperature of the surface. Warmer areas are yellow and red while cooler areas are blue and black.

This tool is amazing. My houses use concrete block walls with furring strips nailed to then that then have the drywall applied on top of that. Between the firing strips is a piece of foam insulation. Due to the way materials transfer heat, the furring strips show up plain as day, and we even found a section where the original builders failed to apply ant insulation at all.

Another cool thing is that you can look at the ceiling and quick find places that lack adequate insulation without having to fumble around the attic.

You can even pour hot water down the sink and "see" the hot water flowing through the pipes.

Of course if you had a recent water leak the water is absorbing heat in order to evaporate and this process is also visible.

It's such a cool tool! $400; that's a lot less than a decade ago but still on the pricier side for a tool.

1) Tiling. Learn to tile floors and either buy a wet saw or learn where you can rent one locally. Of course this is regional; I'm aware that people hate tile floor in cold regions because the floor is so cold when it's 20 below outside.

2) Drywall. Learn how to install and repair drywall, learn when other materials would be better (durarock, hardie, etc) and how to finish. I bought a simple Wagner texture sprayer that works great, but you have to thin joint compound to the point of it being as loose as a thick paint for it to spray well.

3) Basic electrical. Nothing crazy, but learn how to replace outlets, light switches, GFCIs, and how to install lights and ceiling fans. In my 3 house I replaced all of the outlets with new "safety" outlets (they prevent kids from sticking an object in an outlet and zapping themselves), and light switches with the big fancier Decora style switches.  Buy the little tools to "sniff" if the wires are hot.

Other easy stuff:

* I run 2 complete coax cables into each bedroom and living room and 1 into the kitchen and other rooms. With the right tools working with coax is relatively easy. I rip out what is usually a spaghetti mess of wires and splitters in the attic with this method and then all wires run to a common point.

* Baseboards. There's no need to hire a carpenter. Just get a nice miter saw and use quality material.

* Landscaping. It's virtually impossible to screw this up yet investors frequently pay professionals. Visit a local Mom-n-Pop nursery and ask what will work in your area and do it. Sometimes the big box places stock plants not suitable for the store's region. Also do the minimal. If you're flipping the buyers may want to landscape themselves, and the juvenile micro-plants you planted were a waste of money.

* Replacing toilets. It's actually pretty easy. Also toilets are virtually indestructible so consider saving the toilet and replacing its guts. I cleaned hideous toilets back to virtually new in a few minutes using pool acid. I've replaced a lot of the guts in a toilet and the next time I renovate I'm going to fully rebuild a toilet with stainless steel: the only metal truly suitable for water exposure.

* Painting: unless you are so busy you literally don't have time to do this or you hate it with an absolute and irrational passion then you love throwing money away.

I've definitely got my why, but I've always noticed that virtually every single person with success in real estate cites travel as one of their primary goals. At first I thought it was symbolic because it's a very effective way to cite that you aren't tied to a 9-to-5 and have plenty of free cash. For me, travel is a burden that I really don't like even though I have had a lot of fun on trips. 

It also strikes me as odd due to the frequency of investors citing that they don't want to get hands on with their properties because they state their time would be better spent finding deals, but then they go on trips all the time. I spent last weekend tiling the porch of one of my properties in the diagonal/tile style as a challenge and that's something, to me, that is fun and rewarding.

The reason I posted this in "Off Topic" is because this is a bit tongue-in-cheek and a bit serious too!

PS by favorite quote right now is "Shut up Wesley!" and that isn't really useful outside of living on a starship.