All Forum Posts by: Bill Bockwoldt

We just completed a garage renovation to a full 1BR / 1BA apartment in December 2014. Our house happened to lend itself well to this because we had a downstairs hallway with a full bath and bedroom going right out to the garage. We don't put our cars in the garage and it was full of stuff we never used anyway. We estimated 4 weeks which turned into almost 9 months for a variety of reasons - however it turned out great and the rent pays our mortgage. It cost more than we budgeted (partially our fault, but not fully) but it was a great experience. If I could find a house in the area with the same layout I would do it again but it's tough where we live. I think the posters above covered most of the things you need to look out for. We always opt to go with higher-end finishes and designs than competitive offerings in all our rentals and we get great tenants and fill them quickly (it pays off in the long run). This one took less than 24 hrs. to rent and so far the tenants are ideal.

Where we live it is $350/sq. ft. to build so it's not cheap to renovate either. I have no idea what it costs in Florida but you should be able to find that pretty easily. One mistake we made was to contract out some of the work, and do some ourselves. That slowed things down and messed up coordination in some cases (we are busy and travel, etc.). 

Some things we did that worked out well:

Upgraded our in-line hot water heater. Separated the electrical for the rental and installed radiant heaters (super efficient and cost-effective for tenants ), no need for A/C as it stays at about 68 in the unit all the time w/o heat. Used higher-grade sheetrock for sound isolation, It's a bit more expensive but worth it. Upgraded appliances, fixtures, flooring, etc. We asked for absolute top-of-market rent (higher than many 2 BR units) and got it right away - housing is really tight here so that may not apply in Florida.

Good luck and based on our experience we do it again in a heartbeat.

Uhg sorry for the 3-peat. BP page load errors I swear!  :-)

See number 2 below. I think most people on BP would suggest you not accept negative cashflow in the hopes of future appreciation of rents and/or values. Especially when you can buy properties elsewhere that start with positive cashflow AND built-in equity. I'm not suggesting Denver property values won't climb, but it always seems the value of investments can't ever fall - until they do. Investing is also about risk management, that's the other side of the coin that many investors don't want to turn over.

speculation

noun

1. 1.

   the forming of a theory or conjecture without firm evidence.

   "there has been widespread speculation that he plans to quit"

2. 2.

   investment in stocks, property, or other ventures in the hope of gain but with the risk of loss.

   "the company's move into property speculation"

See number 2 below. I think most people on BP would suggest you not accept negative cashflow in the hopes of future appreciation of rents and/or values. Especially when you can buy properties elsewhere that start with positive cashflow AND built-in equity. I'm not suggesting Denver property values won't climb, but it always seems the value of investments can't ever fall - until they do. Investing is also about risk management, that's the other side of the coin that many investors don't want to turn over.

speculation

?speky??l?SH(?)n/

noun

1. 1.

   the forming of a theory or conjecture without firm evidence.

   "there has been widespread speculation that he plans to quit"

2. 2.

   investment in stocks, property, or other ventures in the hope of gain but with the risk of loss.

   "the company's move into property speculation"

See number 2 below. I think most people on BP would suggest you not accept negative cashflow in the hopes of future appreciation of rents and/or values. Especially when you can buy properties elsewhere that start with positive cashflow AND built-in equity. I'm not suggesting Denver property values won't climb, but it always seems the value of investments can't ever fall - until they do. Investing is also about risk management, that's the other side of the coin that many investors don't want to turn over.

speculation

?speky??l?SH(?)n/

noun

1. 1. the forming of a theory or conjecture without firm evidence.

   "there has been widespread speculation that he plans to quit"

2. 2. investment in stocks, property, or other ventures in the hope of gain but with the risk of loss.

   "the company's move into property speculation"

A sign that says "Open used refrigerators left behind at your own risk!"

Below is a link to a support page describing how to set up a property management company in Quickbooks. I am not suggesting you do this, but if you read through it you will have a much better understanding of how to set up and classify things in Quickbooks. It is useful because it covers both sides (property managers are in the middle between the tenants and property owners). I found it helpful for understanding how to set things up the "Quickbooks" way.

http://support.quickbooks.intuit.com/support/articles/HOW13259 

Brie,

Great idea and I think your site is off to a great start! I looked over the site and one idea stood out for me. It would be great if when looking at a property listed for sale if you could see a checklist of WHAT was re-habbed. Things such as wiring, plumbing, furnace, water heater, roof, etc. I think we can all assume that flooring/carpet have been done but most interested investors want to know more details about the state of the mechanical systems. I don't know if your site is just scraping the MLS or what, but that kind of checklist would provide a lot of value before contacting the company directly. It could even be a custom checklist that each listing has to complete, just a thought.

I look forward to seeing the site more populated as it grows. Thanks again for all the effort!

I have two policies:

$280 that provides $2M over my home/auto coverage with Encompass and one rental in CA. (Married, no kids).

$267 that provides $1M over my 5 out-of-state rentals using RLI Insurance.

I live just up the road from the Tiny Homes office and demonstration area where they have several models. These were done by Jay Shafer who has http://www.fourlightshouses.com/ and http://www.tumbleweedhouses.com/.

This is what we learned on our last visit checking out their models:

1. In Sonoma county (Northern CA), these are considered RV's and can not have permanent utility connections - with the exception of as an assisted living unit where home healthcare workers may visit (so you could put one in your backyard for Grandma if you were taking care of her there and leave the utilities permanently connected). If someone reports you, they will come out and verify you have disconnected the utilities and then come at random intervals to check on you. The office manager told us they have exhausted the market for people who will set up technically "illegal" housing in their back yard.

2. Regulation can be local/county/state specific but generally in CA RV's can't become stationary, and tiny homes are classified as RVs (at least in CA). The minimum sq. ft. for a permanent structure (e.g. granny unit) is 640 sq. ft. in our county. They continue to petition the State of CA to try to get tiny homes reclassified, and no local politician wants to remove the ordinance banning stationary RVs (we all know where that might lead).

3. They said Jay Shafer has sold the Tiny House business to Champion Homes (large producer of manufactured homes) and he now focuses on designing/building structures around 800 sq. ft. (supplied by Champion) because they are considered manufactured homes (e.g. fancier mobile homes). We toured an 840 sq. ft. 2br/1ba home that cost $60k (base) and came in at around $90k as constructed. It had stainless appliances/tile/concrete countertops and was mostly bare wood (aesthetic) or sheetrock, and had a minimalist/vacation home feel to it. It also had a nice front deck bolted on (we were considering something like that for a vacation home on a bare lot near the coast). You can custom-order them with whatever features/configuration/materials you can think up and they prepare a custom quote. The permits run about $9k where we live, and they will level the ground and bring utilities from the lot line to the structure for $15k. The price of the home includes delivery/assembly.

The overwhelming concern, as pointed out by many in this thread, is zoning and costs in your area. They don't make sense in the town where we live, but if you can build them yourself and have raw/cheap land with access to utilities then they might be more interesting as an investment.