All Forum Posts by: Andy Sabisch

Jon

What is the ft2 of the house . . . to have a new roof put on (and include decking from what you said) with permits in CA, the estimate you have seems low - we pay more here in NE Pennsylvania.  

The $7000 estimate for HVAC may be a tad low depending on the size of the house and size of the unit you are installing.  Once you have the ft2, call a few HVAC people and get a ballpark . . . again, we paid $9,000 for one in an 1800 ft2 house a few months back here.  

The garage conversion could be a can of worms . . . can always add that to the offer as a contingency to verify that the conversion was permitted.  

As far as flooring, what do comps in the area have for flooring?  We usually use LVP or actual hardwood for higher finish homes . . . not sure what $482K buys in your area and the finishes it demands (around here that would get you a 4,000 ft2 on an acre lakefront lot). 

Again, check the buying and selling costs . . . we closed on a $210K house yesterday and our closing costs with just the buyers agent commission were just over $10,400.  

As far as bids, realize that GCs need to make money so spending time giving estimates on the hope you buy the property and then use them is often a non-starter.  Get ballparks from them and when you buy a property and the GC you use does a good job, stick with him on future jobs - we have found we get bumped up when we need him.  

Finally, yup, permitting can suck and you really have to keep your cool which is extremely difficult at times dealing with some of the people in power.

A few points to reflect on . . . 

1) How old is the property?  

2) How old is the roof? Does it need to be replaced?  How old are the utilities (electrical, plumbing, HVAC)?

3) Was the previous work permitted (enclosing the garage and making it living space)?

4) Several areas are low estimates (landscaping, windows (we have spent more than that for 3 windows installed), flooring (looks shot), insulation ($400 is nothing), $800 for a carpenter (not sure how much you need done by that is not much work

5) Not sure I would rip out the kitchen with the granite counters, back splash and the cabinets.  I would look at refacing rather than replacing.

6) Purchase costs - $2011 seems really low - no agent? Check these costs with a title company. Same for Sales costs of $1,500 . . . 

7) Misc or contingency is low as $2,500 will be eaten up in a flash . . . hope for the best and plan for the worst is a rule to live by

8) You have a GC listed . . . have you touched base with one (or three) to get their input based on your local market?

9) The 3 month holding time is unrealistic.  This needs to include reno, listing, contract and reaching the closing table.  Permits can kill your timeline - we have been on hold on a project for 4 weeks this Friday waiting on a permit.

Good luck in your flip . . . remember, you make your money on the buy so be sure you do not underestimate reno costs and find yourself underwater.

I know this will probably generate some heated responses but our experience in more than 20 years of buying & selling is that the vast majority of home inspectors add little to the deal and in many cases derail them especially when there is a newbie involved.  Home inspectors can get training and canned software for reports online from multiple sources.  Ever wonder how they can produce a 60+ page report within an hour after leaving a property?

What we do is contact trades people we have come to depend on for repairs such as HVAC, plumbing, roofing and electrical.  If we look at a property, we can see most of what is required.  If we have questions on the big ticket areas, we call the professionals who know if we buy it they will get the work.  If you look at inspection reports, they always say "Recommend contacted a licensed professional for an assessment" . . . . so why not go to that source initially and if you have done work with them, their assessment is usually free.

Some people have said getting an inspection done when you sell the property which you can give to the buyer is an option but often they will still get their own done . . . 

One perspective that has worked for us

Most of the properties we have purchased in the past few years have come off the MLS. There are deals out there often due to a poor listing by an agent that should probably be flipping burgers, properties that are a cosmetic train wreck and the photos are no plus or priced too high. Like an off market property, see what the spread between buy and sell is and make an offer - the worst thing they can say is no. We recently found an MLS property that was a bank property and the listing was terrible. My wife has no problem offering a low ball offer and in this case it was accepted - looks like a minimum of $75K left at the closing table when we sell. It had been on the MLS for over 45 days and we did wonder why it had not been snapped up. The deals are there - use the tools here on BP and work a few deals to see what to offer.

We have gone with the double hung vinyl windows that tilt in for cleaning (both halves). They will help energy-wise and are a plus when renting the property.

Good to see you are getting multiple quotes as we have found that that vary considerably (have one installer we use now for all window work).

You will find that going with the cheapest is not always the best especially for rentals.  I would rather fix things once and not get call backs from tenants than the other way around.

Without knowing where you are, hard to give specific recommendations.  Have you checked with Lowe's or Home Depot?  You might be surprised at the cost and they stand behind the work.  I would call a few window / glass shops and see who they might recommend.

As others have said, either the paint was oil based and you used latex based paint over it but in any case, remove the old paint and use oil based primer (we swear by Red Kilz) to seal it and then paint over it with a latex flat ceiling paint . . . you should be fine.

If the ceiling is drywall, make sure it is not wet indicating a leak from above (either the roof or from something above it)

Original paint was not done correctly or there was moisture that allowed the paint to pull free.

Appreciate the feedback . . . confirms what we thought and while personal issues derailed us from renewing earlier, we are where we are.  We let the buyer know that the lease expires at the end of July and wanted to let him decide if we should renew and if so, at what terms.  We will let the tenant know by the end of June so they are not jammed up if a move is in the cards.

Once again, great input from the BP family!

We have a property that is under contract to sell by 07/09/2025 and has a tenant that has been there for several years and is a solid tenant.  Their lease expires at the end of July 2025.  We provided leases to the buyer for both units (the other side's lease runs until April 2026).

Question - would you renew the lease (we usually renew the month before) as the tenants want to stay of allow the new owner to determine if a rent increase is desired?

Thanks . . . 

This is a good example of the pitfalls of remote investing . . . not trying to rub salt into your wounds.  Permits are always an unknown and a few calls to local investors or REIGs beforehand might have identified what the typical time frame was (hate to rely on contractors as they will often use that Money Pit movie line . . . 2 weeks!)  

As far as options, do you know that Atlanta has implemented restrictions on STR and MTR properties with additional licensing and requirements? If you have not looked into them, you may find more headaches than you had bargained for. Add the TRUE cost of the STR / MTR game being remote and your net may disappear like smoke especially in a market that is regulated and saturated in many parts.

You may want to reach out to a local REIG member and see if they could work with you for some percentage to take it to the finish line and sell the property (Atlanta Real Estate Investor Group | Facebook).

With the volatility of the market today and trying to do this remote, investors winding up in this situation will become more common.  Hopefully you can get the property finished and marketed so you come out relatively unscathed but smarter for the next one.