All Forum Posts by: Andy Sabisch

Quote from @Charles Carillo:

@Andy Sabisch

I would focus on fixing up the unit and getting it rented to good tenants that you are able to thoroughly vet.

Sage advice . . . . this was a tenant that we inherited when we bought the property so we are only out one month and while the security deposit will not cover the repairs, throwing good money after bad really does not make sense when we are talking about less than $1,000 owed.  When we closed and introduced ourselves, they said they would not be paying rent until we put in new carpet and painted the walls . . . well, a great way to introduce yourself so we have them 30 days notice and then they opted to leave the two dogs in all 30 days (so we do need new flooring) and in general left the place in need of renovation.  We are almost done and will use our usual screening which has been effective to-date but I guess you can always get a winner.  But as you said, throwing more money into chasing smoke is not worth the effort.  Move on and collect the rent without issues from the next tenant.

Quote from @Edgar Sanabia:

that sounds like its going to screw over new home buyers. Making it harder to buy a house as well.

The thing is what caused the 2008 crisis is happening again .. . easier to get a new loan then rent in places and with no skin in the game, people simply walk away when the market prices adjust as they are doing in many areas.  People that are lucky to be able to change a light bulb buy a house and then fail to do even basic maintenance since they cant call the landlord results in property condition degrading and the value falling.  If the overall market drops, they are upside down and simply default.  Things will likely change as they did for a short time in the last crisis but it is needed . . . can't believe that even with low credit people can buy with little down (primary house) and then wonder why they default and lose it.

Congratulations . . .as they say the first step is the hardest and you hit a home run with two properties.  See you are a contractor so you have the inside track on the flip / reno work but remember not to over improve and eat up your profit.  As you go through the process, feel free to post any questions so the BP family can try and help you avoid some of the potholes most of us have found the hard way.  Best of luck!

OK, looking for some input on a situation.  Had a tenant behind on the rent and then had one excuse after another as to not paying and then flew off one night.  The security deposit won't cover the damages and we are out the rent.  We can file with the magistrate and go that route but one has to weigh the chance of getting blood from a stone even with a judgement . . .I know some states make it easy but PA is not one of them.

What we do want to do is to try and ensure the next landlord does not find out what great tenants they can be.  The question is can we file something with the credit bureaus or other organization to provide that as a red flag?  Does this require a judgement from the courts before you can file with them?  What actions would you take in this situation?  Thankfully this is the first time we have run into this hence the uncertainty of what can be done.

Thanks

As others have said, there are a FEW wholesalers that can bring you realistic deals but 99% will bring you deals that have overstated ARVs, underestimated rehabs and unrealistic reno periods.  I know if several investors that got burned going that route.  The vast majority of wholesalers do not know the business and after investing in one of the online courses that promise instant riches, you can imagine what type of deals you start to see being offered.  I have found that if you even so much as do a search on wholesalers, your Facebook and Google feeds will be jammed with wholesale programs that promise money with no effort. I have reached out to some of the bandit sign posters to see what they know and what they can bring me and have yet to find one that was not asking me for tips before the call ended.  There are some wholesalers that can bring you off market deals that work but if you do not know the market and what reno costs are, there are some better deals on Florida property east of Miami. Do you research and see if you have wholesalers in your area that can find the deals and re not greedy.  Check with your local REIG and see if they have wholesaler members you can meet with.

I just think that with the plethora of people selling the magic elixir of wholesaling on the Internet that there are way more bad ones than good ones anywhere.  Do your homework to find a good one or more than one but as I said, do one search and see how many "get rich quick" offers start popping up . . . get started with no money and no knowledge . . that says it all.

Without knowing what typical costs are in your area which by the very nature of SF Bay versus update Pennsylvania, I would say that the costs are quite high.  Almost $10K for demo and haul-away?  With a quote like that, unless you have used the contractor before and feel comfortable with the work and prices he provides, I would definitely get another quote.  Remember, that for some contractors that really do not want the job they will give you a quote that if you take it they will do it or sub it to another contractor.  Had a friend that was a contractor in Atlanta and that was what he told me was done for jobs they did not really want.  In fact he had received work at the higher quote that he did  just that - had another contractor sub to him and he pocketed the difference.  The quote sounds like that might be the case so get another estimate and see how it compares.

As far as a HML, having one that gives a straight answer when asked about a specific deal and not responding with "It depends". The terms dictate if the deal works and not getting firm numbers simply has me move on to a HML that will give me the numbers. On the same note, when I turn down the terms, I do not appreciate repeated calls to see what can be done to make the deal work. Give me the best terms and we can move forward - I for one do not play one against another and if it takes a rejection to come up with better terms, makes me wonder if I was getting a shaft even with the new terms.

Is this for two kitchens or one? There should be way more detail in terms of what is included in that price . . . I would never accept a quote like that.

Is the contractor doing the demo, removing the debris, installing cabinets, counter tops, appliances, backsplash, flooring???  Without specifics on what is being provided with a breakdown (unless you are giving him a very specific statement of work to get quoted on), you need to find another contractor as this one leaves you open for a blank check on the back end.

Quote from @Anthony Salazar:

I’m curious, are there inspections you would do when buying a multifamily property that you might otherwise not do on a single family? 

Things on a multi family property that might not be done on a single . . . .

1) Plumbing - ensure that the water is split if you are not planning on paying water and done to code
2) Electrical - same thing, are the meters split and is the wiring done to code (we had one where one tenant was tapped into another tenants power for the second floor

Quote from @Mike Dymski:

When I was in residential, I used a great inspector and just had them inspect the important stuff (roof, mechanicals, structure).  They paid for themselves many times over...not on every deal but over multiple acquisitions (including "as-is" listings).

Mike, Agree that a good inspection can save $1,000s but the vast majority of home inspectors pay for a training course, buy the software and start doing inspections with canned verbiage.  They usually say to get a professional to assess condition XXX which is why I skip that and get the professional I know already from previous projects to look it over since he / she will be the one doing the work.  My only comment was ask to see what type of things and inspector is looking for (ask for a sample report or two) and if it is a generalist, consider finding a specialist for better intel