All Forum Posts by: David K.
David K. has started 34 posts and replied 137 times.
Post: At what point do you replace heatings systems in rentals?
- Investor
- Attleboro, MA
- Posts 137
- Votes 51
Currently I have home serve, and they are pretty good at keeping things running. Sounds like my best bet may be keeping what I have!
Post: At what point do you replace heatings systems in rentals?
- Investor
- Attleboro, MA
- Posts 137
- Votes 51
Now i'm starting to rethink my original position...ha
Post: At what point do you replace heatings systems in rentals?
- Investor
- Attleboro, MA
- Posts 137
- Votes 51
I've got a quite a few units. All have older 25+ year old gas boilers. (gas baseboard) I plan to keep them long term. At what point do I start replacing the boilers, albeit before they actually break and have to be replaced? I got a quote to do 2 of these units in one house for $14,000. (Third unit is electric, and all the thermostats etc were replaced two years ago). Was debating starting with this house, and then every year buying 1-3 systems. I have money set aside from a property I sold already for these 2 units. Just wondering should I do this or wait until they go in the middle of the winter sometime, where it will no doubt be more expensive.....thoughts for those who have experience with this?
Post: buy now or wait?
- Investor
- Attleboro, MA
- Posts 137
- Votes 51
If the numbers work buy. Market is def high. Multi family is great way to start, if you are somewhat handy. If not be willing to pay a lot for any sort of repairs. Contractors even second rate ones are getting big money
Post: Financing maintenance costs
- Investor
- Attleboro, MA
- Posts 137
- Votes 51
This is tricky. I recently refinanced a house and pulled cash back to re-do 2 units and roofs. I blew through my reserves very quickly, more than 10k. Sometimes things will come out of the blue. In 15 years of doing this I'd never had two long term tenants leave in the same month. Be proactive, and you can never have enough in reserves.
Post: Reserves for multiple units
- Investor
- Attleboro, MA
- Posts 137
- Votes 51
Originally posted by @Nathan Gesner:
Anywhere from $100 to $100,000.
Seriously, that number will depend on a ton of factors.
- Age, condition of the properties
- Rent rates
- Mortgage, taxes, insurance, and other expenses
- Vacancy rates
Those are just a few considerations. Then there are factors like your personal income. If you are living paycheck-to-paycheck, a reserve is very important. If you are a heart surgeon making $300,000 a year and carrying no debt, then a reserve is probably unnecessary because you could probably replace a roof or two without even dipping into a reserve.
It's not easy but you need to put pen to paper and figure out what kind of losses would be "worst case" and how much you would have to set aside to handle those situations.
Yeah its very tricky. I once had 25k set aside and nearly went through it when a roof went, then bad eviction. I think at this point if I can get all the roofs done, then my # can be less.
Post: Refi to pay for repairs but generate rent increases
- Investor
- Attleboro, MA
- Posts 137
- Votes 51
Originally posted by @Nathan Gesner:
If you put $40,000 into it and then increase rent $500 a month, that's a 15% return on your cash invested. I would renovate and stay put.
Looking like a cash out of 50k, will cost me $189 per month. Renovation cost is $10,000. Adding $250 per month in rent. Gives me another $40k to upgrade other units.
Post: Reserves for multiple units
- Investor
- Attleboro, MA
- Posts 137
- Votes 51
For those of you who own multiple units. Let's say you had 10 units, consisting of 4 properties. How much in reserves would you keep?
Post: What do you do to harden your rentals?
- Investor
- Attleboro, MA
- Posts 137
- Votes 51
Post: Refi to pay for repairs but generate rent increases
- Investor
- Attleboro, MA
- Posts 137
- Votes 51
Originally posted by @Michael Ablan:
@David K. - If they're sitting empty unless you do the repairs, then you do the repairs....or sell them. I'm constantly refinancing our equity to do upgrades to our existing portfolio. The idea is you do it once, do it right, with the higher quality materials and hopefully you shouldn't have to do it again until 15 years down the road. This is a long haul game. I can't make it through the long haul if my properties aren't rented
What general upgrades do you do that don't break the bank, where you feel the investment gets returned? My first thing is generally appliances. I can get brand new stove and fridges for about $1200. Instantly upgrades the unit.