All Forum Posts by: Chris Sellers

Quinton,

Congratulations!  I like to do an hour or so online research to target some houses, make a plan before driving.  Then I always end up down some interesting unintended paths.  Just like fishing.

You're looking for deals, but also learning a ton during these drives.

Good Luck!

Chris

Jason,

I always want to leave well operating, high cost equipment in place where I can when selling.   We know that a mechanical component has a life cycle and we're tempted to replace them at the end of that cycle.  But, we also only seem to choose the visible ones (who replaces a 10 year old working well pump, attic fan or a sump pump).  I go by aesthetics of the unit.  If I've created a nice, modern rehab with an enormous, rusty relic outside HVAC unit that will turn off buyers, I replace it.  I've seen 15 year old units with low SEER values, but look great, and kept them.

Good Luck!

Chris

Gayle,

If I were you, I'd become an expert on this right away.  Try the city office that handles this.  Sometimes they have process instructions for these things, since they get asked so often.  If it seems complicated, get a real estate attorney who is experienced with this type of code violation and buy an hour of his/her time to advise you.  If it's simple, go solo.

My experience dealing with municipalities:  they are very process oriented.  Operate strictly by "if, then" rules.  You may find, for example, that complaints (your neighbor) must be received in writing on a certain form.  Then the office sends you a letter within 10 days, giving you 15 days to reply.  If you don't reply, they escalate (you don't want this).  If you reply asking for more time (again, probably a specific form), this could delay things significantly, giving you more time.  On and on.  No empathy, just following a prescribed process.

Learn that process, determine if you're compliant with the zoning ordinance.  If you are compliant, your attorney will probably advise you how to answer them properly to end it.  If you're not complaint, your attorney will advise you how to work within the system to buy as much time as allowed with the least penalty possible to become compliant.  

Good Luck!

Chris

Sara,

Most builders will offer a warranty on new construction, different periods of time for different things (maybe a year for appliances, 7 years for windows).

I haven't heard of rehab contractors doing this.  I definitely wouldn't want to either.

I'd suggest offering them a home warranty, explain that they bought a professionally remodeled 40 year old home.  Warranties are really just insurance, like what the guy at Best Buy tries to push on you when you get a tv.  Your buyer is benefiting from a smoking hot deal, not overpriced insurance.  

Good Luck!

Chris

J,

Congratulations on jumping into real estate investing!  It's a lot of fun.

The numbers work.  Most people's first deal is their least profitable in $ terms, but most profitable for knowledge.  You'll learn a ton from being a landlord.  I'd say make the offer and go for it.  Break thru that difficult barrier separating those preparing from those doing.

One thing you should try to do, but it's hard at first.  Make the offer and move on.  Start searching for the next deal, focus your mental energy there, not dwell on if they'll accept or if you should counter. 

Good Luck!

Chris

Craig,

I bet you are proud of that home run!  Great job, thanks for sharing.  Is that a lake in the backyard?

I'd love to hear more of the story, how you got the deal.

Thanks,

Chris

My funniest fail was during a rehab of an empty, vandalized duplex in a bad neighborhood in 2006.  It had bullet holes, no outside HVAC unit and the copper plumbing underneath had been liberated.  I replaced the windows, put up new siding, re did the interior, replaced the HVAC.  

I was ready to go and had the city cut the water back on.  Flood city.  I forgot to replace the missing plumbing :-)

Held me up a week; lesson learned.

John,

I'm a believer in selling. I'm in NC and buy at 2%, then sell if i can get 1% from other investors if I think the increase won't continue. In your market, however, it might keep rising. In that case, you might consider a LOC or refi to pull out the equity and invest elsewhere.

Good Luck!

Chris

Joshua,

Congratulations on your first deal!  Fun, isn't it?   Here are my first 5 investment property deals:

Duplex, $88k house hack, no rehab.  20% down, payment $616.  Rented $525 (lived in other side).  Moved out in year 4 (rent now $550 x 2).  Sold in year 5 for $104.5k.

Duplex, $83k + $3k rehab.  100% finance, don't remember payment.  Rented $1050.  Sold in year 3 for $104.5 (was package with first).

Duplex, $55k + $4k rehab.  Cash deal.  Rented $1050.  Sold in 2 years for $85k.

Duplex, $45k + $9k rehab.  Cash deal.  Rented $1050 (but with high vacancy, 30%).  Sold in 2 years for $90k.

SFH, $52k + $7k rehab. Cash deal. Rented $875. Sold in 4 years for $102,750.

Jeannie,

Welcome!  I've only been hear a few weeks myself, but have been real estate investing a while.

To keep it real simple, you want your dollars invested to be low compared to a higher rent.  This works better at a lower price point, since the rent curve is more flat than the purchase price curve.  For example, you could buy a $300k house that rents for $2k per month.  This ratio would be 150 (300K/2K).   Much better cash flow to buy 10- $30k houses that rent for $500 per month each with ratios of 60 (30k/500 or 300k/5k).  

I'd suggest reaching out to an active investor and asking if you can shadow him/her.  Offer a service (e.g. you drive and buy the food) while they check properties and run the numbers.  Just soak it all in, listen, watch.  A day of doing this will be much more valuable than reading posts or books.  I've been happy to do this with some newcomers.

Good Luck!

Chris