All Forum Posts by: Steve Bruza

Thanks for all the comments.  I wanted to update this conversation for future reference.

I spoke with two people from the state environmental office.  They did have some files on record and explained the confusion regarding the 2 BR / 3 BR designation.  I also spoke with a reputable septic vendor who explained to me their process for inspecting the system as well as the drain field.  Each informed me of the need for a permit for any repairs, upgrades or modifications which would be then bring the record current and re-classify the property as a 3 BR.  The property sits on 1/2 acre lot so there is room to improve the drain field as needed.  

In the days since I posted this conversation I have secured a contract to purchase.  I have a good idea of the investment that will be needed to bring the property up to my standard and still be profitable.  I do employ a buy and hold strategy with all of my properties.  This house is older (1958), but the current owners cannot make upgrades or repairs so I was able to negotiate a price that works for me.

I will update again with any news of the septic system.

That is where some of the discrepancy comes in.  I have seen some of the records from 1987 that show it as a 3 BR system.  But the local field office has told me that they are ignoring that older statement and are deeming it a 2 BR.  Sounds a little strange to me, but I am hoping to get more information from an independent inspection.

Thanks for the response.  I am going to speak with that office to get further details.

I have found a house that I am considering purchasing as a Buy and Hold.  We are still in negotiations and I have a pretty good idea of my costs and what I want to invest in the property to update and rehab it.

My question is about the septic system.  The house is being sold as a 2 / 1, when it has a third bedroom.  There seem to be some questions regarding the septic system and whether or not it is rated as a two or three bedroom "system".  I am not familiar with this perspective and would like to know if anyone has encountered this before.  The septic system did have some work on the "paddlebox" about 15 years ago.  The house is 60 years old, but is in generally good shape.  I was provided a form from the "environmental office" and they are stating it is only a two bedroom house.  I have never seen this entity decide how a house can be designated.  

I usually perform my own inspections, but I was thinking of getting a septic inspection performed.  Does anyone know what kind of cost I can expect for an inspection?  Or what kind of costs I may be looking at to improve or replace the system?  Thank you for your input.

Thanks for all of the input everyone.  I met will the seller and we have worked out a deal.  I am in the process of looking for a lender as seller options were not available on this one.  The numbers work compared to my other properties.  

The unit is move in ready, might need to paint, so repairs or upgrades are not an issue on this one.  I like the idea of owning both units in the building.  Now I don't have to worry about dealing with another owner when it comes to repair or maintenance that affects both units.

Matt,

Thanks for the response, again great comments.  I have spoken to him and we are meeting on Sunday to discuss.  I am making a list of questions to ask to get a better idea of what will work.  I have to admit, I am intrigued by the idea of owning both sides and property.  If anyone has any suggestions for good questions, I am open.

As far as other deals go, I don't have anything else pending. This one has been kind of sitting on the back burner as I own the other side. As soon as I purchased my side and made his acquaintance, he was letting me know he is looking to sell and move. I am on the HOA board for a community of townhomes. I have sent communications out to those homeowners looking for deals, especially on those of the duplex variety.

I do plan to hold my properties as long as I can.  My end goal is to establish as much retirement income as I can.  I have had the same thought as you with regard to holding a property long term to ease or minimize risk of "over-investing".

Thanks guys, good information.  The seller is looking to purchase another house and would like to use the proceeds from the sale of this one.  Once I get some additional details and make a decision I will post the results.  Thanks.

I live in Nashville, Tennessee and currently have seven rental properties including two duplexes. They provide a nice monthly rental income, but I have never purchased using the 70% rule. My approach has been to focus more on the monthly expense and mortgage rather than the sale price. My Cap Rates have ranged from 12-20%, but I always look for a 2:1 income to expense ratio (including PITI). I do like to renovate my properties to bring them up to date. I feel this brings in a better tenant and higher rent. I do yearly leases and most of my tenants renew.

After becoming a member of BP, I have begun to question what I am doing.  I enjoy using the calculators and reading about the many strategies other investors use.  I am a "buy and hold" investor, but I do see the cash flow advantage of flipping.

So here is my question, I have an opportunity to purchase the other side of a zero lot line property of which I already own one side.  The seller is motivated, but our market right now is insane.  The seller knows what he can get.  He hasn't hired an agent yet and is willing to discuss the sale with me.  If he is intent on getting 80-90-100% of the market value, is that a bad thing?  It doesn't need much work (if any) and I know what I can get for rent.  I have the down payment for a loan if it goes that way.  A cash purchase would just about break the bank.  Am I not thinking like an investor?  What am I missing with this line of thought?  I appreciate any input.