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All Forum Posts by: Steve K.

Steve K. has started 29 posts and replied 2754 times.

Post: California to make "Solar "mandatory for new Homes!!!!!!

Steve K.#3 Real Estate Horror Stories ContributorPosted
  • Realtor
  • Boulder, CO
  • Posts 2,857
  • Votes 5,075

@Account Closed Batteries are rarely included in modern solar installations. Instead net metering is used. Net metering is when your billing meter is replaced with a bi-directional meter, which spins backwards during the day when the sun supplies a surplus of electricity, and then spins forward at night like a normal meter would. The surplus kilowatt hours produced during the day are credited to your account in what is called your "solar bank". Solar installations are designed to match a buildings usage as closely as possible so that the surplus energy produced during the day offsets the energy consumed during times when the sun is not shining. Essentially the energy is stored in the grid much like a battery, but without the need to install actual batteries. Net metering policies vary by utility but most are calculated annually so that the surplus produced during summer months offsets winter months when days are shorter and panels are covered in snow, etc.  

Battery backup systems are used primarily for remote locations when it is less expensive to include batteries than it would be to get access to utility power, for example a remote cabin where running overhead lines in and possibly adding a transformer will cost a lot of money, solar with batteries may be cheaper. Also some people desire battery backup for reasons like critical power loads that can not be without power for even a fraction of a second such as life support systems/ important electrical equipment, or "preppers"/survivalists that desire full energy autonomy for peace of mind, or locations prone to power outages where people work from home and require reliable power, etc. But batteries are not common. 

A local installer that specializes in off grid/ battery backup systems would be able to provide you with a detailed quote for a solar electric system coupled with a battery bank sized specifically to meet your energy loads. Prices vary dramatically depending on what loads you're trying to back up, quality of equipment used etc. but a ballpark estimate is $250-300 per battery and each battery provides 3-4kWh of backup power. How long it takes to recharge them depends on the size of the solar array the batteries are coupled with and how sunny it is that day. 

Most solar installers don't even offer battery backup as an option because these systems are very rare and the batteries add a lot of unnecessary expense and complication. Additionally batteries only last 8-10 years whether they're being used or not and add significantly to the embodied energy in the system (batteries are not "green" technology like solar panels are). A normal solar installation will replace the energy it took to produce the equipment in 1-4 years, but when batteries are added the energy payback period is stretched out considerably. For backup power a simple generator remains a more cost effective solution than batteries in most applications. 

Post: California to make "Solar "mandatory for new Homes!!!!!!

Steve K.#3 Real Estate Horror Stories ContributorPosted
  • Realtor
  • Boulder, CO
  • Posts 2,857
  • Votes 5,075

Important notes about the CA mandate: 

The California Energy Commission (CEC) worked closely with the California Building Industry Association (CBIA) on this since 2008. 

Applies to new homes and MF buildings of 3 stories and fewer.

Also applies to major remodels.

Approved by CA Energy Commission 5 votes for, 0 against.

Approved by CBIA.

Includes flexibility for building designs/locations unsuitable for solar.

Solar panels do not have to be on the roof, if builders do not want to include rooftop solar in they can choose to access a nearby central community solar array. Community solar arrays are already widespread and available in CA, so shares can be purchased to virtually offset consumption just like one would buy energy from a coal, nuclear, or hydro power plant. 

Arguments for:

Reduction in green house gasses

Improves home owner’s cash flow position by lowering energy bills (estimated average of $80/month in savings)

Solar already widespread and cost effective in CA

Important part of overall effort for CA to get 100% of it's energy from carbon free sources by 2045

Arguments against:

Raises housing prices (expected to raise mortgage payments by ~$40/month on average)

Raises barrier to entry for home ownership

Will double the amount of solar on the grid by 2025, which will be problematic for utilities to manage

Info from the California Energy Commission Website:

http://www.energy.ca.gov/releases/2018_releases/20...

FAQ’s:

http://www.energy.ca.gov/title24/2019standards/doc...

Infographic:

http://www.energy.ca.gov/title24/2019standards/doc...

Post: Best paint to use to paint kitchen cabinets

Steve K.#3 Real Estate Horror Stories ContributorPosted
  • Realtor
  • Boulder, CO
  • Posts 2,857
  • Votes 5,075

@Michael Watts I have a great painter who uses Benjamin Moore ADVANCE. It takes a long time to fully cure, like a month, but once that time period is over it’s a very solid paint, almost like a lacquer. Tenants can cause some damage if not careful while it cures, so keep a quart on hand for touch ups. Very happy with this paint overall.

Post: I'm feeling like a bad person.

Steve K.#3 Real Estate Horror Stories ContributorPosted
  • Realtor
  • Boulder, CO
  • Posts 2,857
  • Votes 5,075

@Chris Hanisco

 Just think of it like this: the situation with the soon-to-be previous tenants will blow over relatively quickly, while your investment is long term.  In a few months when your building is rehabbed and stabilized with quality tenants paying market rent, you'll look back at this as a minor blip. It will blend in with all the other minor blips you'll have dealt with by then.

In the meantime, it may difficult to get your son to understand. I'd definitely get ahead of that, and explain how you're under contract, and that the contract stipulates the building be delivered empty. You need to rehab the building and raise rent in order to make enough money to pay the bank each month, and that's it. 

One piece of advice separate from this tenant situation: don't overdo the renovation. Classic newbie mistake (maybe even the most common one, and I'm in this club so don't be like me) is spending too much on rehab. It's tempting to go overboard making the unit really nice. But keep in mind that you may be redoing much of that work again sooner than you think, like during your next turnover even. So don't go full remodel, just do the minimal amount you need to get your targeted rent, using durable, cost-effective materials. Looking back I wish I had done less unnecessary remodeling, and definitely less worrying about tenant drama. 

You'll still be there leveraging your asset in the wisest way possible long after this drama is ancient history. You're making the right decision, even though it is the hard decision.  

@Chris Hanisco

Post: Seller will not provide bank statements in due diligence

Steve K.#3 Real Estate Horror Stories ContributorPosted
  • Realtor
  • Boulder, CO
  • Posts 2,857
  • Votes 5,075

The commercial lenders I work with do not require bank statements or taxes from the seller. We have to show our bank statements, taxes, and demonstrate that we have adequate reserves to our lender as borrowers of course. But all we need to get from the seller for underwriting is lease agreements/rent roll, estoppels, receipts for any recent capital expenditures and operating statements. I could see how getting bank statements/taxes to help verify the history of the building would be helpful, and it probably doesn't hurt to ask, but in my experience (4 plexes as well as small commercial 5-24 units) it is not a lender requirement nor is it customary.

 I personally wouldn't push the issue. I'm mostly concerned with getting a really good inspection, during which I'm on site the whole time going through crawl spaces, talking to tenants and collecting as much info as I can. Pro-forma rents are based on market data/how much updating I plan to do. Also I just always assume that one of the tenants is Mr. or Mrs. Murphy of Murphy's Law infamy, and have adequate reserves going in to account for that unavoidable fact. @Kyle Mitchell

Post: Thoughts on Murder house?

Steve K.#3 Real Estate Horror Stories ContributorPosted
  • Realtor
  • Boulder, CO
  • Posts 2,857
  • Votes 5,075

@Phil K. There’s a famous “murder house” here in Boulder, the JonBenet Ramsey house. It has not had a great track record in terms of being a liquid asset. The current owner lowered the price below $2M while comps with no murder were all over $3M. but still couldn’t offload it. It’s a beautiful house in a fantastic location too. The owner even had the address officially changed, which I though was a pretty good idea. Still no sale though, last I heard it was sitting vacant.

Post: Seller will not provide bank statements in due diligence

Steve K.#3 Real Estate Horror Stories ContributorPosted
  • Realtor
  • Boulder, CO
  • Posts 2,857
  • Votes 5,075

@Kyle Mitchell Profit and Loss (P&L) statements, Trailing 12 (T12), and Estoppels are common, sometimes Schedule E. Never heard of bank statements myself, and not sure I'd be comfortable with that as a seller. I only really like to show P&L/T12 and estoppels, because if the president doesn't have to show his, I don't want to show mine either.

Post: Im 19 years old with $160k. How do I invest?

Steve K.#3 Real Estate Horror Stories ContributorPosted
  • Realtor
  • Boulder, CO
  • Posts 2,857
  • Votes 5,075

@Gregory L. Nobody has mentioned this idea yet so here goes: but yourself a primary residence. I always wished I had the means to buy myself a house during my college years instead of renting. Part of this is because my college town had ridiculous appreciation. I would have doubled my money during the 5 years I lived there, instead of spending $30k on rent. This may or may not be the case for you regarding appreciation, probably not, but at the very least you can rent rooms to friends and make money instead of renting/living in the dorms (barf). Buying a primary is most people’s starting point, and probably makes more sense than buying a mobile home park that is priced too good to be true (major red flag in a high risk sector of real estate). As a homeowner you’ll get to learn all about the joys of taking care of a property and managing a college rental at the same time lol. Depending on what town you’re in, you might be able to just pay cash (but I wouldn’t spend any more than maybe $120k so you have adequate reserves especially considering you may not have steady income), or perhaps your parents would co-sign on a loan. Not enough info in your post to know if any of this actually makes sense for you or not, obviously you’d want to be sure the area has appreciation potential, and maybe you’re not even planning on staying at that school 4 years in which case don’t buy, but just a thought as it’s something I would do myself if I could go back in time and had that money at 19. Finally, whatever you did with your first business, do that again as many times as possible, sounds like that’s a much better gig than real estate!

Post: New Landlord advise.. Evict? Or wait it out...

Steve K.#3 Real Estate Horror Stories ContributorPosted
  • Realtor
  • Boulder, CO
  • Posts 2,857
  • Votes 5,075

@Jeremy Mattson you’ll want to check your local quidelines for specifics on your jurisdiction. I’m only familiar with my own state. In CO, posting on the door (in addition to mailing it), serving in person or sending via certified mail are all legit methods. The certified mail receipt is proof you served the notice, or at least made every effort to, and since she paid the late fees on the ones you posted to her door, that probably qualifies as a acknowledgment of receipt. When serving in person, I have the tenant sign the bottom of my copy and their copy, and I sign too in acknowledgment of it having been served on that date. It can also be served to anyone at the property of suitable age so you could serve her kids if they’re 18. That’s weird the certified mail couldn’t be delivered, not sure what happened there, maybe she refused it or something. Since she’s your neighbor I’d just post on the front door as well as any other doors, make it unavoidable to see, and drop a copy in her mailbox or wherever she gets mail too. Being her neighbor you will probably know if she’s seen the notice. Any judge should accept that if you’re certain she saw it and you made every effort possible to deliver it. If you’re in doubt you could have a professional serve it. Again, check your local laws, just read everything in your local tenant-landlord handbook regarding evictions as well as the Nolo website for your state. Having a record of when she paid rent and/or late fees should be enough documentation to establish chronic later rent payments but definitely follow protocol according to your local guidelines.

Post: New Landlord advise.. Evict? Or wait it out...

Steve K.#3 Real Estate Horror Stories ContributorPosted
  • Realtor
  • Boulder, CO
  • Posts 2,857
  • Votes 5,075

@Jeremy Mattson Well that makes it as easy as possible for you psychologically; you shouldn't feel bad about evicting someone who has already exceeded the limits of charity from their church and even their mother. My case was the same in that way: she even had a grant program for single women willing to pay her rent, she just never filled out the paperwork. I attempted an amicable split, offered to waive the late rent plus late fees and even offered her a week more free rent to get out if she went peacefully and didn't damage the property on her way out. I reminded her that if I had to evict, having that on her record plus garnished wages and ruined credit would make it impossible for her to get another apartment. But she didn't take my offer. Maybe she thought, "I'm a single mother, they won't just kick me and my kid's butts out in the street." I included all late fees, court fees, lease violation fees, and damages in the Notice to Pay or Quit. Surprisingly she actually showed up in court. I stuck to the facts and kept it extremely simple: she was chronically late on rent, hadn't paid her utility bills, and I wanted her out so I could replace her with a more responsible tenant (I didn't even get into the lease violations, as I didn't want to). When it was time for her side of the story, she launched into a litany of excuses. The judge literally cut her off mid sentence, Judge Judy style, and simply asked, "Can you be out tomorrow on your own, or do I have to get the sheriff to forcibly move you out?", and that was that. 

Maybe this is the rock bottom moment your tenant needs to get her act together. Anyway, not your problem. The eviction will be over before you know it, you'll learn how to do it, and you'll feel so much better after it's done with the unit rehabbed and a quality tenant in place. Sounds like you're bootstrapping so you probably don't want to pay a lawyer. Just look up the process on your court jurisdiction's website. It's not that hard in my experience and all the forms are right there. With unpaid utilities, lease violations, and chronic late rent that you've served notices on and documented, it's a pretty cut and dry case. Just follow the process exactly as your jurisdiction requires, don't deviate at all or you may have to start all over.  

My main take away from my first eviction was realizing the importance of serving notices to pay or quit and charging late fees immediately every time rent is late beyond the grace period. I'm not rude about it, I usually don't even talk to the tenant but if I do I just say "Company policy. We need you to pay on time so we can pay our own bills including the mortgage for this building on time. Banks don't tolerate late payments so neither do we." If the tenant pays, great, I halt the eviction process. Late fees equal more revenue plus I've got documentation of the late payment that I can use if I need to evict down the road. If they don't pay, the eviction process has already begun so lost revenue is minimized. As far as lease violations go, they just get the one written warning along with a hefty fine. Failure to cure or subsequent violation results in automatic eviction. It's so much easier to just serve notices than it is to track people down, listen to excuses, haggle over details, etc. I don't do any of that anymore. It's simply business. It sounds like you're already on the right path since you mentioned you served her notices, so you're off to a solid start. Good luck!