All Forum Posts by: Jeff G.

@Joe Fairless

 I just wanted to make cheap jabs at Detroit. :)

@Brandon Barnic in general when someone says a neighborhood is class A, B, C, D, etc. they're generally referring to one of a few things depending upon context:

• The general level of income of a neighborhood.
• Sometimes very specifically the average credit score of a neighborhood.
• The level of "hassle" an area is likely to give any landlord over things like collecting rent and respect for the property they occupy.

Others are welcome to let me know if I have this wrong. But, I think of them as follows:

• A neighborhood. The McMansion and country club crowd. Yes, some of these people are renters too. Doctors, Lawyers, and CPA's live here. Also very unlikely to miss a rental payment and they may have rentals of their own even if they rent themselves.
• B neighborhood. A well established middle class neighborhoods. Lots of 3-4 bed/2 bath homes with decent yards. Engineers, and highly skilled professionals live here. Unlikely to miss a rent payment unless someone is hit by a bus.
• C neighborhood. This area is distinguished by smaller "cookie cutter" homes, some under 1000 square feet with 2-3 beds/1 bath with few frills. You may have incidental delays in getting rent from this crowd. Some areas are better than others.
• D neighborhood. The low income part of town. "Unlicensed pharmacologists" live here, lots of them. Things "just break" around properties in these areas a lot. Get used to tenants trying to live for free on your dime.
• E neighborhood. Think of the most violent areas of Detroit. Yes, that kind of neighborhood.  And to think, Detroit was once the "Paris of the Midwest," really.

@Joe Fairless do would you consider the above a far characterization of neighborhood classes?

@Luis Capriles 

If this is your first investment property do your self a favor:

Talk to an insurance agent about renters insurance policies and what kinds of renters policies you can make claims against and under what conditions. You should consider making your tenants get a renters policy as a part of your lease. If they damage your property in excess of the security deposit potentially you have someone besides a tenant to extract monetary damages from.

@Paul Ortiz I think it will change how some people pay rent, mostly the unbanked. Consider the following case: 

You have a young family with sufficient income to make rental payments and bruised but adequate credit. However, a few years ago one of them wrote a bad check and this was reported in Chex so that person has difficulty opening a bank account. You decide to accept them as tenants if they can pay you electronically between the 1st and the 5th of the month like everyone else. They can't write you a check and you don't like to accept cash for safety reasons. What do you do?

You sign them up with a payment processor that accepts bitcoin and pays you in your choice of dollars or bitcoin. The processing fee is negligible: somewhat less than paying you by money order. Everybody wins.

I think low income tenants will eventually pay electronically in this way. I could be wrong.

@Noel Fleming Jones and @Chris T. 

You might also take a look at Rentalutions they handle rent and also online maintenance requests. Cozy requires the tenant have a bank account. Rentalutions has other electronic options, including the option to pay rent with Bitcoin which clear much faster than an ACH payment. If the tenant pays rent in BTC, you get paid in USD unless you specify otherwise.

Welcome to BP @Christopher O'Sullivan 

I have an IT background too and I am trying to get into the multifamily space as well. Though, I'm looking for 3-4 unit homes not commercial apartment buildings.

Good luck with your deal!

~Jeff

@NA Jones 

Well, the first thing that you should look for is to check your zoning regulations. There are some areas near me that are full of multifamily homes, many previously converted from large single family homes, that are now simply zoned "MULTI." That is, you can only build a multifamily in that area and you can't convert a multifamily into a non-conforming structure e.g., a single family home.

So, before you do anything double check that!

I've never personally rehabbed a home that old, but I love old buildings. So, I know a fair bit about them because of my love for them. :)

Here are common issues that other people have run into:

• Check to see if local ordinance forbids changes to the building's facade. Also check with a local real estate attorney on this point too. Lots of times certain characteristics of buildings that old have legal protections. 
• In general, you'll probably want to tear most rooms down to the studs. Why? You'll see.
• Prior to electrification, do you know how people lit their homes at night? Candles? Nope, not really. They lighted rooms with gas lamps during the Victorian period. So, be prepared to remove many meany yards of pipe that have nothing to do with plumbing!
• There have been many revisions to the electrical code since the house was built. Chances are different parts are frozen in time at different periods of electrification. (I've known some homes that old to only have 110 coming in instead of 220.)
• Further, lots and lots of handy men over the years have been told to "just fix" many plumbing an electrical issues. So, in addition to ancient wiring you're likely to find "non-standard" wiring in more than a few places.
• So, please just take as a given that the entire house will need to be re-wired from the basement fuse panel through to every wing of the house.
• I don't know what the roof is made of but if you happen to have a ceramic tile roof don't get rid of it. Repairs are rare (they last about 100 years between major repairs) but expensive. Major repair of a tile roof is about $30,000.
• Keep the old wood frame windows if you can. Using modern windows in a house that old never works out well. It just isn't in keeping with the character of the house. Properly glazed and sealed wood frame windows are extremely efficient. If they've been taken out, please put period style replacements back in!
• I don't know how the house is heated but be prepared to replace the heater(s.) If it's heated with oil, be prepared to convert it to natural gas. Typical heating oil to natural gas conversions run about $5,000 - $6,000.
• If there is original woodwork, go out of your way to keep it. This may mean spending lots of hours with paint stripper and a putty knife but it's worth it! Don't paint it, stain it.
• Floors: chances are your floors are hardwood. If you see other flooring material, peel it back. You might find yet more flooring material. Keep peeling until you reach hardwood or find sub-floor. Chances are you'll find hardwood. Sand it down and stain it. If the floor has pet stains, handle it Nicole Curtis style and stain it dark and the dark spots will just look like a variation in the stain.
• Check the sub-floor. Lots of times old rags were used as insulation. Over the course of 100 years these have probably bio-degraded to useless pulp.
• If any of the bathrooms still have their original subway tile they're going to be thicker than modern subway tile. Also, they may be adhered to the wall with concrete, yes, really.
• In homes that old servants typically lived in the attic and the basement and you might find features that reflect this. For example you may find small dumb waiters (or shafts for them) in places that don't make sense.
• Also some stairways might seem oddly placed until you realize that these are the "back stairways" for the servants to use and move around while staying mostly out of the main house.
• Check the foundation and footings in the basement. They may or may not be in good condition after 100 years. This will probably be one of the first things you want to check.
• Walk-in wine cellars make wonderful upgrades to homes this old. I'm just saying. :)
• In any event be prepared for more code enforcement related issues than usual. In general, "once you've touched it you have to bring it up to code."
• If you don't want to convert the house to forced air heating there is a wonderful option for cooling a house this old: ductless air-conditioning.

That's all I can think of at the moment. I hope that helped. I want to rehab my own Victorian home in the next few years. I really think I have the soul for it.

Good luck with your renovation and conversion. Please update this thread with your progress. I'm sure the entire community would love to hear how things go!

@Sam Sav I agree with @James Wise deduct the cost of the railing, and any miscellaneous material you need such as screws any touch-up paint, etc. In many jurisdictions you can also deduct a fair amount for your time.

• Go to the hardware store and buy what you need. Keep your receipts. Take a photograph of them and send them to Evernote if you must.
• Write yourself a work order describing the work to be done. Take before and after photographs of the work with a smartphone. Document the time it took you to do the work with date(s) and time(s), rounding to 15 minute increments. If the job takes you 1 hour or less charge one hour as any handyman you'd call to do the work would also have a minimum 1 hour charge even if the job took 15 minutes.

If the total amount of hassle costs you less than $100 for time and materials, honestly I'd forget about it and chalk it up to the cost of doing business--no need to be petty.

Going forward what you might want to do is to create a "fact sheet" that you hand out to each new lessee detailing common damages and repairs and how much you'll charge the tenant on move-out if they don't fix it before they leave. Try to make it as simple as reading a menu. In my part of CT it's common to have these as a lease addendum. 

@Jimmy S. charge them for the refill. If it's more than 50% empty they owe you that.

Also, it's about $5,000 - $6,000 to replace an oil heater with a natural gas heater. Consider upgrading before the next tenant moves in. It will make the unit more attractive to tenants, many of whom don't want the hassle that comes with oil heat. As a bonus, you'll never have this hassle again.

@Luis Capriles  go Google "flat rate eviction attorney Massachusetts" and find one in your area. They tend to be less expensive and they're "fire and forget." You just provide them with basic paperwork and they handle the entire process for one low fee. In my area this costs about $500. Your area will be different but probably in that same ballpark.

This really is the least stressful way to get evict a tenant.