All Forum Posts by: Troy Parker

Quote from @Brooke Williamson:

Quote from @Adam Bartomeo:

@Brooke Williamson 

I apologize, i thought that i was clear:

"Our experience has been that when this happens (we have had this situation at least 4 times) it always plays out the same way, there is some sort of clerical error and we usually have it resolved in 1 -2 months AND they pay the back rent."

Than you for your clarity. So you have never had to actually take section 8 to court for back rent.  My question is have you ever taken section 8 to court for back rent? Since you haven't then do you know anyone that has? I think after 10 months of trying to get through to someone at section 8 to resolve the issue is more than enough time. I'm now thinking that I will be forced to go to court to sue for the back rent due.

Your question seems to be a legal one. I would try to find an attorney that specializes in real estate disputes. Looking for a "Board Certified Attorney" related to real estate would be your best bet. If there is not a Board Certified Attorney in that area of law, I would get free consultations from real estate attorneys. The attorneys would be in the best position to help you on evaluating the merit of getting back rent on a section 8 property.

Hello BiggerPockets community.

I bought my first home about two months ago. I purchased a 1500sqft 3/2 wood home about two months ago. The property was REO. I purchased the property with 5% down at 225k and it appraised at 240k. I budgeted about 45k in cash to renovate the master bathroom, kitchen, guest bathroom, and painting the interior. With my down payment, closing costs, and renovations, I will have put down around 70k (down payment and renovations). I expect the home to be worth 300-315k after renovations. The home is in a B class neighborhood inside of a good school district. One of the major draws was that the property appeals to small families and is in a better area.

The home is in a great neighborhood, and I expect it to appreciate greatly based on new development and being centrally located within the town. I am not factoring appreciation in my cash flow analysis, but it was a major thought when I purchased the property. I could not have normally afforded to buy in this neighborhood without purchasing a distressed property.

My plan was to house hack one room for a year. After the tenant’s year lease is up, I plan to move out and rent the entire building. I was planning to rent the room for around $800 and after I move out, rent the entire home out for $2,500 monthly.

My current monthly payment is about $2,300. I have taken steps to reduce the mortgage payment that may take time to go into effect: filed homestead, I plan to reappraise the property after renovations are complete to eliminate my monthly $66 paid towards PMI, and I am currently negotiating different insurance policies. Due to the initial condition of the home, I had to get a construction insurance policy, pay a larger amount up front in an escrow account, and insurance is pulling monthly from that escrow account. My agent told me once the renovations are complete, I can get a different policy and use the remainder in escrow towards the next policy.

Assuming I can get my mortgage payment to around 2,150, there is almost no cash flow after I calculate for vacancies, property management, cap ex, etc. I do plan to self manage since its in my hometown; however, I am planning for property management as an expense in the event I move to a bigger city for better employment.

Questions for the community:

• Did I make a mistake in my purchase?
• Should I consider a 1031 after one year to “cut my losses”?
• How should I determine what to charge rent for a guest bedroom?
• How can I make sure that I do not rent the home out under market value?

Hello BiggerPockets community,

I am currently in the process of remodeling a 3/2 1500 sqft wood home built in 1979. I have almost finished the kitchen remodel as well as the master bathroom remodel. I plan to move forward repainting the entire interior. I will live in the home for 1 year and then reevaluate whether to make it a cash flowing rental or simply flip it. I signed an addendum so I must live there at least 1 year.

I plan to get the property reappraised after renovations to eliminate PMI. The master bath and kitchen absolutely needed to be redone; however, I am not sure about the guest bathroom. The guest bathroom has an ugly green tub with green fiberglass along the wall, green paint, white tiles with green accent tiles.

The rest of the remodel has been focused on bringing the home to a more modern look. I am worried that if I do not completely remodel the guest bathroom, it’s going to date the entire home and be an eye sore (mainly the abundance of green).

Options:

• - Should I completely gut the bathroom, replace the tub, flooring, toilet, tile, paint, and vanity?
• - Should I do a partial remodel, replace the vanity, toilet, floor, and put a tub cover? Paint the tiles and paint the fiberglass where the tub is.
• - Do a minimal remodel, replace toilet and vanity.

Note: I am trying to get the best ROI. I can personally live with the bathroom, but it definitely needs a new toilet and vanity at minimum. If I do minimal repairs, I can probably replace the garage door or paint the exterior. If I do a complete remodel the garage door will likely have to wait.

Quote from @Bob Stevens:

Quote from @Troy Parker:

Hello BiggerPockets community!

I recently received a quote to paint the entire interior of my recently purchased home. The home is 1500 sq ft, 3 bedrooms, 2 bathrooms, and was built in 1979 with a wood frame. The quote was $5352.00 ($3,650 for labor and $1,702 for materials). The painter does exceptional work, but the price is a little higher than I expected.

My appraisal was only for the interior, but the painter said that we could discuss painting the exterior based on my budget. The painter mentioned that reattaching/replacing some panels and applying a new coat of paint on the exterior would prolong the life of the home.

I bought the home for 5% down and I am renovating the property with the intention of getting it reappraised to eliminate PMI. I am in the process of remodeling the kitchen and both bathrooms. I will live there for a year (It was an REO and I signed an addendum that I have to live there at least a year) while I complete the remodel and then rent the property out to establish cashflow.

I have a few questions I would like feedback on from the community.

• 1) How much does a well-done paint job add to the appraisal of a home vs doing it yourself with little to no experience?
• 2) How important is it to have a variety of colors throughout the home? Would it be insane to paint everything a neutral white?
• 3) Should I seek out other painters?

Separate considerations:

• a) My friend works for this painter and I have been trying to pay her on the side to do the work under the table.
• b) I am trying to get the kitchen painted by June 2nd because I am having the cabinets installed and the kitchen is already demoed.
• c) I currently have a contractor working on the bathroom and she agreed to paint the kitchen but she has been very slow.

Thank you for all the advice!

 Price is about right; the appraiser does not care about the paint.

You need to hire a GC and stay out of their way. Is this an investment prop for a rental? If so, I would love to see the numbers, 

I do plan on posting the numbers under my profile in the investments tabs, but I am still figuring out my total expenses. Once I get the reno complete I will list everything. I am new to BiggerPockets, but my previous posts related to my struggles in purchasing my first home, dealing with an REO property, and being my own realtor if you wanted more info about my story.

Quote from @Gregory Schwartz:

I usually pay $2500 ish for my 1000 sqft apartments, the painter is good not great but they are affordable rentals. 

$5k seems about right to have a good paint job done. 

Personally, I try to DIY as little as possible. It always seems to take longer, cost more and cause more stress than I plan 

 Does that include materials and labor?

Quote from @Lynn McGeein:

@Troy Parker if you’ll be living there for a year, anyway, why not take a room and paint it yourself, see what kind of painter you are and if you like it enough to do it. Then decide whether or not to pay a professional. I personally found I’m good at it if it’s a simple job, normal easy walls, but hire out if its 2-story height, painting cabinetry, wood windows etc as they are a all a big pain.

I have thought about that, but most of the rooms have a few drywall spots that I do not have experience making repairs on. I also keep a 9-5 that often runs later than 5. I thought I would have more time when I purchased the home, but recently accepted a promotion. I'm getting paid more, but I have a lot less time. Also, I was under a time crunch to get the kitchen painted before cabinets are installed.

Quote from @Jennifer Wong:

I have a 3 bedroom, 2 bath unit built in 1975 about 1200 sq feet and just finished remodeling the 2 baths. I had the entire unit painted Whisper White from Sherwin Williams from baseboard to ceiling.  The labor for the painting was $5150.  The windows are original aluminum and the sills were cracked and paint peeling. They were able to repair, caulk and now look great. The French doors were painted, so this was also labor-intensive. I am voting you consider hiring a professional.  Although I will not be moving in, this professional paint job has added value to my rental.

 Did this include the exterior or only interior?

Hello BiggerPockets community!

I recently received a quote to paint the entire interior of my recently purchased home. The home is 1500 sq ft, 3 bedrooms, 2 bathrooms, and was built in 1979 with a wood frame. The quote was $5352.00 ($3,650 for labor and $1,702 for materials). The painter does exceptional work, but the price is a little higher than I expected.

My appraisal was only for the interior, but the painter said that we could discuss painting the exterior based on my budget. The painter mentioned that reattaching/replacing some panels and applying a new coat of paint on the exterior would prolong the life of the home.

I bought the home for 5% down and I am renovating the property with the intention of getting it reappraised to eliminate PMI. I am in the process of remodeling the kitchen and both bathrooms. I will live there for a year (It was an REO and I signed an addendum that I have to live there at least a year) while I complete the remodel and then rent the property out to establish cashflow.

I have a few questions I would like feedback on from the community.

• 1) How much does a well-done paint job add to the appraisal of a home vs doing it yourself with little to no experience?
• 2) How important is it to have a variety of colors throughout the home? Would it be insane to paint everything a neutral white?
• 3) Should I seek out other painters?

Separate considerations:

• a) My friend works for this painter and I have been trying to pay her on the side to do the work under the table.
• b) I am trying to get the kitchen painted by June 2nd because I am having the cabinets installed and the kitchen is already demoed.
• c) I currently have a contractor working on the bathroom and she agreed to paint the kitchen but she has been very slow.

Thank you for all the advice!

Hello BiggerPockets community,

As a first-time homeowner in Florida, I've encountered some unique challenges, including the need to pay for an insurance policy upfront for a year in escrow due to the home's initial condition. While this initial policy allowed me to secure conventional financing, I'm now in the process of planning and executing renovations to enhance the value and appeal of my home, with the goal of switching to a different insurance policy after completing the remodel and being refunded the unused portion of the escrow. I'm wondering: can renovations actually help reduce insurance costs?

Why Renovate?

I'm committed to making strategic renovations to improve the home's structural integrity, safety features, and overall condition. By investing in quality renovations, I hope to enhance the value and appeal of my home, as well as potentially lower my insurance costs.

Strategic Renovations to Consider

1. Addressing Four-Point Issues: I've addressed the issues that needed to be rectified before obtaining conventional financing. By improving the overall condition and safety of the home, I'm laying the groundwork for potential insurance savings.
2. Quality Renovations: I'm focusing on making renovations that will improve the home's structural integrity, safety features, and overall condition. I'm working with a reliable contractor and investing in quality materials for the master bathroom, kitchen, and guest bathroom renovations, which I hope will position the home for potential insurance discounts.

Benefits of Lower Insurance Costs

By strategically planning and executing renovations during the remodeling process, I'm hoping to lower my insurance costs and save money in the long run. After completing the remodel, I plan to switch to a different insurance policy and be refunded the unused portion of the escrow, making this approach a win-win for improving my home and saving money on insurance.

Additionally, by paying 5% down and planning to reach 22% equity in the property to eliminate PMI, I'm taking proactive steps to reduce my monthly expenses and make homeownership more affordable and sustainable in the long term.

Conclusion

I'm curious to hear from the BiggerPockets community: have you found that renovations can help reduce insurance costs? Are there specific renovations or improvements that have proven to be more effective in lowering insurance premiums? As I continue my renovation journey and explore ways to enhance my home's value and appeal while saving money on insurance costs, I would appreciate any insights, tips, or advice you have to share.

Thank you for joining me on this journey, and I look forward to hearing your thoughts and experiences as I continue to navigate the world of homeownership and real estate investing in Florida.

Chronology of my first property purchase.

• November 2023 – Preapproved for 250k. Began scanning MLS everyday to find a deal (I am my own realtor and this is my first transaction).
• January 2024 – After searching deals daily, I saw a property listed that day for 219,500 two blocks from my parents home and promptly made an offer that day for 222,222.
• Listing realtor kept the bidding open for a week and asked for a counter based on competing bids (in hindsight I don't think there were actually other bids). I countered: 224,444. My offer was accepted and we were put under contract for a bank owned home that was recently foreclosed.
• The four point discovered errors that needed to be rectified prior to obtaining conventional financing. Luckily bank agreed to make repairs needed to pass four point.
• I had to get a renovation loan insurance policy where I paid for a year up front in escrow and they would pull $400 a month till renovations were completed and then I could find a new insurance policy and the remaining escrow would be transferred to the new policy.
• Paid $540 for an appraisal. Property appraised for 245k; however, it was classified as a c5 which prevented most lenders from issuing conventional financing.
• I contested the appraisal and the appraiser held their ground, but their supervisor told me that if I slapped a coat of paint on the cabinets (these needed to be replaced due to wood rot) it would be an easy c4.
• I paid $520 for a new appraisal, contacted all my family and friends, deep cleaned the home and put a fresh coat of paint on the rotted cabinets and over the doors. Second appraisal came in as a c4 and at 240k value (woohoo 15k equity gain).
• After two extensions, a litany of repairs, issues with the four point and appraisal, I finally closed on the home 3/29/24.
• I put 5% down, expecting to get an additional 2.5% back from my realtors commission. I planned to put in money out of pocket towards renovations to force appreciation, get to the 78/22 debt to value, and eliminate PMI.
• I got quotes from 4 different contractors. 2 didn’t work out, 1 was very expensive, but number 4 was perfect. A little unreliable with timing but I wasn’t in a hurry and the price was right. I was going to continue living with my parents until the renovations were completed.
  
• I hired contractor 4, put a lock box on the property and starting purchasing materials and placing them in the garage for the contractor to get started. The scope of repairs include: complete renovation of master bathroom, kitchen, and guest bathroom.
• I spent about $1,700 on materials for the master bathroom (vanity, lighting, tile, grout, 2 medicine cabinets, cement, drywall, etc.). Contractor quoted me 4k for the labor. Total $5,700 for bathroom remodel.
• I have begun starting to look for cabinets now that I have completely budgeted for the master bathroom and the contractor quoted me about 2k to install the cabinets. My budget for cabinets is 8-12k.
• I am hoping to remodel the guest bathroom for around $4,000.
• Being conservative, I expect to spend around 25k in renovations for the master bath, kitchen, and guest bathroom. I expect the property to appraise for 300k after renovations.
• After renovations, I plan to find a roommate and rent one room for $800 a month and split utilities or $900 flat. I signed an addendum that I have to live in the property for one year as a primary residence.
• After year one, I am torn on whether I should flip the property (it's a wood home built in 79 in a flood zone) and expect around a 30k return. Or after I find a new insurance policy and eliminate PMI I expect my monthly expenses to be around 2k and I expect the property could rent for at least $2350 and potentially 2,500. I would definitely hire a management company if I plan to rent the property.
• Back up plan is to stay there two years, sell the property and avoid paying taxes.

Fellow BiggerPockets community, I would love some advice on evaluating whether I should flip the property to reinvest in a bigger home or multifamily unit or rent the property with a management company?