All Forum Posts by: Tarun Kapoor

I am working on changing doors and trims in my fourplex. The pre-pictures are here.
http://habitatgroupmn.com/pre.html

The rooms are small so to make it spacious and keep the old victorian character of the house, I want to paint the trim and doors whitish colors...

My tenants are going to be 25-30 year olds and rent will be around $1.5 per square feet. Its a nice part of the town.

I was wondering if its a good idea to have white color tones in the house ? I am afraid that the turnover will start showing blemishes on the trim quickly ?

Hi everyone,

We closed on our first four-plex on 4/15. And needless to say, we are nervous !!!

1 tenant has left and the other 3 are leaving in the next 1-2 months. The building is 100 years old, is structurally good, but needs some loving from inside. The area is full of old houses and new buildings so the rents vary quite a bit ($1/sq ft to $2.5/sq feet). Timing wise, i want to take care of things now than in the future...I want to fix up the place and be able to increase the rent by $100/unit..

This is how the place looks like
http://habitatgroupmn.com/pre.html

And this is how i want it to be
http://habitatgroupmn.com/post.html

List of things i need to take care of and the quote of material and labor that i am getting is http://habitatgroupmn.com/quote.html

I am good at tiling and painting. A couple of my friends are really good and tiling so i can ask their help. My budget per unit is $5,000. We would really appreciate the advise from the Masters of Rehabs that we are lucky to have on this forum on how we can get all this done in $5,000. We would not like to eliminate tasks but want cheaper alternatives or do them ourselves (something that we can do for all 4 units. that way we keep getting better at it and faster..)

Thanks so much in advance.

The content on my local MN REIA was terrible. I can learn 10 times more by spending a day on BP forums. The panel finds every opportunity to sell the business. Its such a negative marketing that i pretty much could not stand through the whole presentation.

As far as networking, most people in REIA want to network with you if you are a big investor i.e. will do multiple deals vs a few. REIA is not the place for people like me who are not full time real estate investors.

Brandon Turner, Hi Brandon, the info on this thread is confusing to me. From my understanding one is not supposed to pay SE taxes on rental income.

I am in the same boat as you. I am looking to form an LLC for managing my properties (and i will be doing the property management). Will i have to pay SE tax on income ? Can anyone please clarify ?

Jon Holdman
Paul Cordero

Thanks guys !

My mortgage broker is saying that the lender will require me to pay 15 months of insurance premium at the time of closing for escrow for my fourplex investment. I would rather pay only 6 months at the closing if i can (since its a significant amount). The broker is saying that its upto the lender to decide how many months they want.

Just wanted to check how many months of insurance are others paying at the time of closing?

I just bought a fourplex as an investment property for $300K and am looking to get RCV insurance on it. I got very different quotes from State Farm and American Fam

Statefarm came up with a replacement cost of $525K and an annual premium of $4,200. American family came up with a replacement cost of $400K and an annual premium of $3,500. For the sake of simplicity assume 0 deductible for both. I think Am Fam is better because of the following logic.

In case of partial loss, I will do the repairs and Am Fam will pay me whatever it costs me to repair.

In case of full loss, I would not rebuild a fourplex. I would build a SF which I can easily do in $400K and can sell it for $400K.

So, by this logic I feel like Am Fam is better in case of both total and partial loss but I am not 100% certain. Does the lower replacement cost estimate make Afm Fam worse?

Thanks a lot in advance.
TK

I think i am missing something here. Can anyone help me understand why would anyone want to take ACV insurance ?

Lets say a renter turns off the heat in winter and it breaks the pipes, floods the house, causing a repair bill of $25,000. I make a claim to insurance and based on depreciation calculation, i get a payout of $10,000 and have to give $15,000 out of pocket. This would be a terrible situation to be in. So, why is ACV worth considering ?

Thanks everyone for their answers..

Can anyone explain me why insuring for "actual cash value" is better than "replacement value". My agent told me that in his 25 yrs of career he has had to claim for a full loss only once. Mostly, its partial loss. And in situations of partial loss, insuring for ACV vs RCV is not a good idea.

So he is saying that lets say you insure for 300K when the replacement value is 600K, then the insurance company knows you insured 50 cents on the dollar. So when there is a partial damage and the assessor determine that it will cost $100K to replace the damages, they will pay me $50K.

HI Kelly,

Thanks for your quick response. Can you tell me which insurance company did you use when you convinced them to insure it for your cost instead of the replacement cost?

Thanks!
Tarun