All Forum Posts by: Josh C.

@Sophia Berry

Yes, 8-16 weeks is the new normal. It’s a huge bummer. Last year was 1-3 weeks. Lumber prices are up 100%. Sucks all around for material price increases.

@Nate Fleming

I agree with you that the cost would be high and his ROI may or may not be good. Unsure.

I’ll also agree that heat pumps don’t have that same “hot” feeling other furnaces have as the coolant doesn’t get super hot.

You may disagree on heat pumps heating cost, but it’s not true. Not even close. Do some YouTubing to dig deeper, but the days of heat pumps not working under 40 are long gone. Just don’t want to let the folks reading this to believe this. It’s huge delta. At least 2x in month electric bills. Also, heat pumps aren’t more efficient than normal AC during the summer. It’s the exactly the same. Same refrigerate cycle it’s always been. Heat pumps just allow the cycle to be reversed in the cold. Not to get to technical, but I used to be a mechanical engineer selling energy and network projects to big companies, now I run our construction department and install lots of HVAC, and can promise you heat pumps and electric baseboard are light years apart in monthly spend unless you live in Alaska or something. Jump on YouTube for 15 minutes for a good lesson on it. Actually pretty neat how they capture heat from 15 degree outdoor air and turn it into 80 degree indoor air.

@Austin Elm

No you don’t get to force sellers to give you the new and improved property at the agreed upon price for the original property. That’s pro level entitlement right there. Lol. Image you were on the selling side of this deal, is that what you’d want your buyer to expect?

Personally, I’d try to have the seller keep the check and get the property much cheaper and control the repairs myself. If the new value supported all the repair money. Then I’d know it was done right at least.

Great post! Thanks!

I will say though people (yourself or syndicate) that bought almost anything 5 years ago and sold in 2020 did very well. I like the control of owning it, plus borrowing against equity, it so nice, but I can also relate to all the copper thieves ruining your week so they can buy two hits of meth.

@Nate Fleming

Heat pumps cost roughly 30-40% of the monthly cost or running resistant heating. Yes they are both electric but one is like a hair dryer or toaster and other using pressurized a refrigerant and physics. It’s a HUGE different is operating cost. Resistance (electric furnaces and baseboard electric heaters are usually 2 or 3 times the cost to operate. That’s why people paid 10k for a heat pump system over a 6k electric furnace and AC system.

Not trying to call you out just didn’t want people to think that’s true and make decisions based in that.

In Indianapolis anyway tenant will just move out in January when their $600 electric bill come if they have an electric baseboard heating. I’ve personally seen an $800 bill for one month in a standard 3/1 rental.

To the OP heat pumps will save you money each minth, but getting the tenants to care is step one. I’d look into a bill back ASAP.

I personally own several and really like them. Good “house” feel for tenants but unlikely to have 100% vacancies. Plus is nice area you get get great rents. I have had several in the $1500 per unit range and they were awesome. I sold these high dollar ones recently as the market spiked in certain neighborhoods, but still own several.

But as Mike said if in a bad area it’s in a bad area. In good neighborhoods they can be great. Also, great house hacking situation.

@Anthony Lewis

No.

Or at least not alone. Combined investors money and possibly not your own if you have lots of experience. Or super rich uncle or you are already wealthy is an possible option leveraging current assets.

But for someone with limited experience and limited net worth that is blindly looking answer is a firm no.

Sorry just doesn’t work like that.

@Ryan Poske has lots of experience. As do I. It’s just going to be super hard to gut a 5 unit building for 100k. 20k/unit for all new electric, plumbing, HVAC and then close and finish is extremely cheap. The only way this would work if you and your team doing lots and lots of the work your self. Or using all unlicensed drug addicts.

Before you get super into be good to really firm numbers.

Good luck!

I’m a lot more hands on so haven’t looked into these much, but the numbers all seemed in line with reasonable except the exit cap rates.

If interest rates are much different or other factors in 5 years not sure 6 caps are guaranteed. That’s what’s worried me about the 5 year holds. If cap rates and interest rates go up could have some issues in 5 years with refi or selling is not a guaranteed.

@Elena Dubinski

Several banks will do a heloc. I’ve yet to see one that will do non-recourse. Those are typically only for very large loan amounts. Even the 2MM and under stuff I’ve seen it always personal guarantee. What is your issue with that specifically?