All Forum Posts by: Alan Pederson

In my house we were paying $300 electric bills. We replaced our old drafty windows and spent around $6,000. Our electric bill went down about $50 a month. When we replaced our 30 year old a/c unit our bill went down another $100 a month.

At one of my rent houses the tenant was paying $300 a month for electric. The windows were in real good shape and the A/C unit was only 2 years old. They wanted me to put in more insulation. When I inspected the attic I could see places that had no insulation at all and other places where it was only a couple of inches deep. We added enough to bring it up to around 16" deep. The next month there electric bill dropped to around $150.

Your problem may not be as simple as just replacing the windows. Have you checked the A/C unit and insulation as well?

OMG!!! Time to get someone else to do the work I think. I would get a structural engineer in there to look at what is going on. Pretty sure you can't just double up 2x4's to correct floor. You could have used a steel beam instead of huge header. GC says he can just cut away half the beam... If he can cut away half the beam then why is the beam that big to start with? There's a lot going on here that doesn't look right.

I've bought some from Seconds and Surplus. If they don't have the cabinets you're looking for in stock they can do a semi custom cabinet that you can order for just a little more money then their regular price stuff.

NOI = Income-Costs. So the answer to your last question is yes because with a higher down payment you will have a smaller mortgage payment and your net income should be higher.

I have this provision written into my pet agreement.

(Any animal that causes or appears to be a threat to any person on the premises or any animal with a history of aggressive behavior will be considered a dangerous animal. Management retains the right to remove dangerous animals immediately.)

You do have options.

1. Remind them that this is a business and as much as you would like to help them, you have to pay the mortgage or the bank will come take the house. If they move quickly, it will be better for both of you. You get the house back so you can rent it out and they won't have an eviction on their record. If they have to be evicted, it will hurt their credit and their chances of getting anyone else to rent to them for a long time. I would post a pay or quit notice asap (send it registered mail return receipt) if they're not current on rent and start looking for an attorney.

2. Start formal eviction

3. Cash for keys

I like using the bank's money instead of my own when buying rentals. I'm sure you will get lots of responses about the pro's and con's on both sides of this argument.

Paying cash allows you to make more money per month and you don't have to worry about financing or the economy going down and how that might effect your investment.

Financing allows you to keep more of your own money but you're taking more risk. You won't make as much money per month on the rental but you do have the money to buy more then one rental. If the market keeps going up, you realize growth on 2 or more units at the same time.

Like I said, some people like the feeling of paying cash and not having the added stress of financing. For me, I can grow my portfolio faster by financing and taking more risk. Once I get to where I want to me, I will start working on paying off the properties early. It's not a marital issue! My wife was totally against us buying rental property to start with but I was the one that worked my rear off to save a ton of money. Once I finally convinced her to let me buy the first rental, she told me I was on my own. It has worked out really well and she doesn't get involved in financial matters because I manage things really good. I talk to her about things and show her all the numbers but she really doesn't want to get involved other then knowing when she can retire or how much she can spend when she plans our vacations.

I wouldn't count on prices or interest rates going down. I'm not sure what to tell you about whether to buy or not. How much total are you putting in to get the property? What would your ROI be? If you do buy it, move into the smaller unit and rent the larger one.

welcome

It's time to start once you have saved enough to comfortably put 20% down, have enough reserves that you can handle a major repair + 6 months house payment, have researched local landlord laws and rules, have a good idea about what paperwork you will need and have it ready (lease, move-in checklist, background check, etc...), and you've done your research so you know what a good deal looks like.

Then the hardest part! MOVE FORWARD AND BUY THAT HOUSE.

We are small time compared to some on here but the first house was the scariest. I was so nervous and excited at the same time. I wasn't sure if we would fail or not. So many people were betting against us. All the horror stories and they were lining up for the "I told you so". A couple of months after we bought the first one and things went very smooth, I was addicted. It was such a rush. We have 3 rentals now and we're about to buy the 4th. It has opened up doors to things I didn't even dream of just a few years ago. It also helps my cope with my boring regular job.