All Forum Posts by: John Christodoulakis

Just to give a little update to anyone interested. I had scheduled two different inspections with the owner for the property and both times he never showed up and left my guy high and dry. I have tried contacting him multiple times since and he's never responded back once. Safe to say he was being a big BS'er about wanting to sell the property and wanted to waste my time. Probably a more common occurrence for most of us but on to the next!

My assumption of what the cost to rehab this building I think is more than I wrote into my original numbers. The entire exterior of the property needs work to be done to it. Plus the flooring of each unit is not flat, it uneven and the stairs are crooked a bit I noticed. Everything will probably have to be ripped out on the inside of each of the units and once that starts to happen there’s always more items you notice that need to get fixed. 

You’re not wrong. My only worry is that this is in a really prime location and he’s mentioned how he just had a deal that fell through. I have other properties that can help cover some of the costs until this one is set up. I know that isn’t the most ideal situation but this will cash flow after I were to Brrrr it. 

 The price they have in mind isn’t really the worst. I will still be able to cash flow with renovations and increase in rents as well as property appreciation. This would just be the largest deal I would ever do and that scares me. Rents currently are low (500-600) but with the units fixed up rents could be 1100-1200 a month and there’s a possibility to rent one as a str. Ideally I’d like the asking price to come down but as I mentioned before the owner is just stubborn. Says he knows what the value of the building if it were fixed up to its best. 

Hi everyone, I am in a little bit of a creative block for lack of a better word. I am in the process of negotiating on a investment building that needs some work and the owner knows it. The problem is that he is pretty stubborn in his price and thinks its priced well with the renovations in mind. Normally in my area I have been buying units for around 50k-65k. This deal is about 54/55k a unit. It’s not awful but I am worried because it needs a lot of work to be done. The entire exterior of the building needs work to be done to it in siding, soffit, facia, gutters, windows, and roof. The building is about 5,000sq ft so I’m guessing work for that will be around 70-90k. The interior flooring is not even at all as well. It has to be torn up to see what problems are inside of there. 

I have thought about telling the owner that we can bring a contractor in or an inspector to look at all the issues and figure out a price on what it would cost to get done. Is that stupid or even worth my time? Any suggestions or ideas are appreciated! 

I would consult a lawyer about it in general. That seems like a very complicated situation and I wouldn’t want to do something incorrect that would possibly jeopardize the deal later on. Nathan is right in saying be weary of eviction laws. I think most states or municipalities would put the home in foreclosure over that amount of taxes due. I recently bought a property that went into tax sale and the taxes due on that one was a few thousand. I used a lawyer for that process to protect my investment and I think that would be the best situation for you as well. 

If they are good tenants and it seems like they want to stay then I would lock them into another year long lease. At the very least you can figure out if they will be leaving or not. I have leased in the winter before and not had any problems, but it all depends on your area. If you had success in the summer months then It’s better to find out sooner than later. 

If I had to give advice to my younger self or to any other young kid right now, it would be to take in as much information as you can. You will never know everything, but that should never stop you from learning so many different "tools" like how David says in the podcast. Another big thig I would say is that the flashy items will come with time. Don't put yourself in a rut just to live a lifestyle that you think will "impress" people. I know to many people who work themselves to death in order to buy things that they can't even enjoy. 

@Bruce Hanson

Welcome Bruce! I’m a local agent and investor in the Porter & Laporte county area! If you have any questions or concerns at all I would be more than happy to help you!