All Forum Posts by: Alecia Loveless

I've come across a property that is dirt cheap. My contractor and I looked at it today and its down to the studs but some large projects have to be done. It needs a new roof, and to be jacked up and have a new foundation put in which is common where I am. There are holes in a wall where a chimney was ripped out and no one replaced the wood. The yard has to be regraded but contractor  felt while the foundation was being done the excavator could do this too for a few more hours work. After we parted ways with the realtor my contractor gave me a couple of figures for things  and since I have been working with him frequently I know what his subcontractors charge an hour. He gave me an all in figure to turn the building into a virtually new 2 family. I expect to pay $100,000 more for a 3 family in a few weeks that one unit has to be rehabbed in. 

I went home and using the BP calculator ran my own estimation of what I thought the rehab would cost based on the other projects we've been working on and came up with the same figure he had. Some of this is dependent on the foundation estimate. 

After all was said and done it would be a grand slam on cash flow and then depending on how much it was refinanced for it would still be a nice cash flowing deal.

The realtor didn't think we'd see the massive appreciation that's been going on in the area due to it's location, its on a somewhat busy road, but he felt that with the area's lack of nice clean new apartments there would be no problem renting it or selling it to another investor in the future. 

To those who Have tackled such a project would you do it again? Or would you recommend waiting for something that just needs mostly cosmetics in the future?

@Sam J. I have formed a great relationship with my plow guy who is also my handyman/general contractor. He coordinates all my projects for me and has electricians, plumbers, spray foam insulation people, foundation experts, everybody you could need for a project cheap.

When I go look at a property I call him up and either go pick him up or he meets me at the property and we do a walk through with the realtors and he immediately tells me yes or no and how much it’s going to cost to get it rent ready or flip ready. Then if I pursue it he comes on the building inspection because he’ll be the one getting the work on the inspection done.

After that I handle the business end and after closing we jump in together and get the work done.

If you can build your team you will create relationships like this with people who will want to see you succeed and will help you out every step of the way. Start networking. Talk with people you know ask who they use. Your accountant might know a good handyman. Ask the person who cuts your hair. You never know who will give you the best recommendation.

At the end of the day my contractors moonlight for me. I pay them 1/3 of what I’d pay them if I went through their day job companies and the work is just as good. Network, network, network.

@Stephen Jones How long has it been on the market? Can you negotiate the price at all or do you need to jump right in with a full price offer before someone else snaps it up? Will it appraised for that amount? If you offered $275,000 would you feel any better, and would your numbers work any better for you? Things like this all need to be considered.

Also will it appreciate in time? Can you value add in time? Do you have an idea how much the roof will cost ? Can you get someone out to estimate it for you before offering? If you can get the estimate maybe you can negotiate the price before or after the inspection based on that.

Just my 2 cents worth.

@Arthur Lyon

Hi! I’m in the White Mountains. Everything is smoking hot up here. Realtors are starting to bring me properties now pre-listing which is nice. However there’s more things you wouldn’t want to own than you would want to own that you have to weed through to find the good stuff. Even the junk that you’d never get your money back out of is jumping right under contract!

I’d recommend staying further south if you can, the lakes region or closer to the Massachusetts border as you mentioned. It will be more expensive to buy but the rents will be 2.5-3x higher than what I am getting. $775 for a nice 1br apartment and $825 for a nice 2br apartment.

If I had more experience I’d branch out where rents were closer to $1500+ down south of here.

@Justin Knighten We use a professional pest service. They do an annual contract and the initial visit was about $250 then quarterly about $125. I think after that annually each quarter about $125. Of course costs will vary from company to company and by location and service provided.

They put down bait boxes outside and feeder boxes inside where the mice are the most likely to come in. They will also treat for ants, wasps and bees, and other common household bugs. It is a good investment in my opinion.

@Jill F. Not sure about the moratorium but it needs to go! However bought a building 2 months ago and inherited “good” tenants and then had one not pay yesterday on the first. Sent her a polite reminder today as I was panicking about the non payment and within 2 minutes she was in touch saying she forgot she’d send it immediately let her know when I got it and within 10 minutes the electronic payment was in my possession. Yay!!!

@Gerardo Hernandez If you didn’t feel comfortable analyze the next one with the BP calculator and hopefully you’ll feel better.

Had a coworker tell me today she was planning to buy a 3br/2ba SFH for under $150,000. So I showed her a pocket listing that would make her a great house hack for $250,000 that my realtor sent me a bit earlier. I explained to her she'd never find a house like that in that price range in our area and suggested a multi family. I told her I'd help her analyze it. She insisted I didn't know what I was talking about!

You must be very vigilant to land the good deals constantly searching the MLS, sending letters to potential owners off market, thinking outside the box. I know you can do this! Don't let the first one get you down! Forget about this one and move on to the next. You've got this!!

@Nathan G. I bought a house in good shape last May. Due to personal reasons it is only now done being renovated. I realized a month ago it would take me 35 years of renting it to make what I can get flipping it. I plan to do a 1031 and buy a multi that will recover its value faster. It only makes sense to sell.

@Igor Fedulov I would love to know if I could convert my existing coin machines to an app.

@Khristopher Kyle Garay I read the original edition when it came out years ago because I loved Rich Dad Poor Dad and wanted to learn as much of his team’s knowledge as I could. At the time I had no real estate and no assets so it was just information. It was informative. I’m sure I’d have to get the new version after the changes to the tax code in 2017 for it to be of any use to me. I may get it. I have an excellent accountant but that doesn’t mean I might not be able to teach him something from an expert!