All Forum Posts by: Tim Rostro

This just happened in time for Christmas.  I just closed on my recent property, a duplex, in Pittsburgh, PA.  This is another out of state property for me but this one has already given me problems compared to my others and this has no tenants yet.  After a review of the property, the contractors from the PM inspected the place and came up with close to $10,000 worth of repairs.  The home inspector, although he did his job, failed to put into his report the minor stuff which eventually add up.  These repairs, deficiencies that were fixed by the previous owner, passed but with the most minimum of standards.  It's rentable right now but I'm sure problems will come up if they don't get addressed immediately.

I was initially expecting $2000-$4000 worth of work to be done but not $10,000.  I was blown away at first, rolled my eyes, and muttered to myself, "Merry  Christmas."  After the initial shock, it was time to roll up the sleeves, pucker up, and get this place livable.  This is a buy and hold property I'm keeping for a long time.  I also consider the first year or year and a half of any new property lost time and income due to deferred repairs from the previous regime that I had to correct.  This is nothing new.  

Plan Of Action:  

I had to shift money around several accounts in order to free up the cash for the repairs as well as the first mortgage payment due in Jan 2020.  I prioritized the most urgent repairs to be done first this month and next month.  With this being the holidays, most work won't begin until the beginning of the year.  If possible, the contractors can at least get one unit ready to go at the end of Jan.  

The next set of repairs follow the next month and the least essential ones a month after that.  Hopefully, everything will be done by mid February/March, with maybe a tenant already in one of the units.  I figure, by the Spring or early Summer, this place will be up and renting out, with all repairs and issues addressed.   

As Real Estate Investors, we are in a position that most people will never be in. To be able to hold multiple properties in our name, shrug off thousands of dollars in repair costs as if you're buying something from the McDonald's Dollar Menu, and preparing for the next deal that comes along.    

Merry Christmas and Happy Holidays to the BP Community!  And here's to a great 2020! (after the repairs are done)

Congrats!!  I'm halfway to my ten which will probably take another 5-7 years for me at the slow *** rate I'm going.  Of course, not many people are in this enviable position as we are.  Here's to another 10 more for you!  

@Bekkah Vidal

I’ll be happy to help out. Please message me.

@T B Smith

It surprises me how people live like this. Like, what are you? Human or a GD animal? I can only imagine if a zombie apocalypse or major event happens and people have to rely on their own skills to survive.

@Dennis M.

Shout out to you for your replies, both humorous and instructive.

@Jesse Smith

This happened to me two different times in two properties. One just left the keys at the PM’s office and hauled ***. The rent was minimal and I got another tenant within 2 months. Another tenant was too far behind in rent and finally was evicted or “voluntarily left.” PM said that the amount of effort to go after this person and the legal fees associated with it would have exceeded the rental amount owed. Better to cut your losses and move on and find a tenant who can pay on time. I believe tenants who skip town have a judgement against them on record for 5-7 years which makes it difficult fo them to find housing. This is according to my PM.

When it rains, it pours.  2019 was a nightmare.  Tenant finally got evicted in my duplex (I'm never going to get that back rent) and the next week, the furnace dies.  It needed replacing as it was old.  Wiped out for the summer.  Other side is just paying off the mortgage and I haven't received anything, profit wise.  I think I may end up getting a small profit next month but I'm not counting on it.  I got a new tenant who's able to pay now.

 This month, A/C in another duplex goes out and that needed replacing.  After two estimates, it was $2600 which pretty much wiped out Nov and Dec rents.  As my tax preparer told me as he was looking over my stuff, "You're not making any profit at all, you're at a loss."  No shiite?  

Save for a rainy day?  Yes, absolutely.  Save for multiple rainy days and have a war chest.  I also ask my PM just subtract the amount from my rental income every month and negotiate paying off repairs on a monthly plan instead of one single payment.  

2020 will be a better year.  Happy Thanksgiving to all!  

Hell no.  A poster here already mentioned about the stuff people waste their money on: booze, cigarettes, lottery tickets.  How much is a pack of cigarettes these days? $5-$7 a pack?  How much do people smoke a day? 1 pack?  30 days x $5 a pack=$150 a month.  That's for cigarettes.  Cable TV? $100 a month?  Cell phone service?  $100 a month?  As an owner, I'm only asking for a $30-$50 monthly rent increase.  Are you fuc@#ing kidding, a grown *** person can't work an extra 4 hours a month or cut back on a small amount of spending to cover the rent increase?  People need to look at their spending habits and ask themselves where all their money went.  

@Ron McGriff

They were in the Copperas Cove/Killeen area. A 4-plex I saved on Zillow back in 2017 was back in the market this year for double the price. My SFH, a starter home in Cove, appreciated 35% but, again, I'm not selling. The newer, nicer homes are doing pretty well too. There's a new HEB that opened in 2013, Whataburger, new stores, etc. I didn't recognize the area after returning there briefly for just a few days. That area is growing. But that's the military community from Fort Hood that's creating this expansion.

I've got 2 properties in Copperas Cove, the town next door to Killeen and Fort Hood.  It's more quieter and doesn't have the craziness of Killeen.  Fort Hood was my first duty station in the Army back in 1997 and I've spent 10 of my 20 years here at the "Great Place" (ugh.....).  I have seen the growth of this area, the nearby towns, and Austin first hand.  I know a lot of Soldiers who stay in the area once they retire or transition out of the service.  

Fort Hood isn't going away anytime soon and Texas politicians will fight tooth and nail to ensure that the world's largest Army base will not disappear from their state. You will have no problem finding renters but be prepared for a high turnover as military personnel come and go. I'm not too concerned with appreciation as my SFH and duplex are buy and hold properties.

However, I've noticed that prices have gone up for the nicer units and multi-units.  I've kept an Excel spreadsheet of potential properties from that area from 2017.  A couple of weeks ago, I came across that same spreadsheet and decided for ***** and giggles to look them up.  The property values doubled in two years!  Dam!  I should have bought them back then but hesitated, thinking that they were too expensive at the time.  Austin doesn't have to influence the Killeen/Fort Hood real estate market, it's its own unique market.