All Forum Posts by: Derreck Wells

Originally posted by @Alex Jeffrey Steady:

Nice to hear from a fellow local! Is your specialty paint removal? If so what are your thoughts on lead paint?

 Hi Alex.

   I'm into lead paint removal up here in MA. Any questions I can answer for you?

Derreck

Lead-Safe Housing and Lead Hazards

(California Civil Code 1941.1; California Health & Safety Code 17961, 17980, 124130, 17920.10,105251 to 105257)                                                                                                                                                                         
Deems a building to be in violation of the State Housing Law if it contains lead hazards, and requires local enforcement agencies to enforce provisions related to lead hazards. Makes it a crime for a person to engage in specified acts related to lead hazard evaluation, abatement, and lead-related constructions courses, unless certified or accredited by the Department. Permits local enforcement agencies to order the abatement of lead hazards or issue a cease and desist order in response to lead hazards.

@John Santero

 MA laws require any property that is being rented to a family with a child under 7 to have a "Letter of Compliance", meaning the unit and common areas were deleaded and passed a re-inspection. Without the Letter of Compliance, you cannot get a section 8 tenant (or CTI, or any other Gov. funded program) regardless of if the paint is peeling or not.

The issue isn't just when you change out windows or doors, or sand woodwork. It's a LOT more complicated then that. "You" (a homeowner) cannot just "encapsulate it and it is just fine and if there is no flaking and pealing", in order to use an encapsulating paint over lead paint every surface needs to be tested individually and a form filled out for the EPA for each surface. 

I don't know the laws in Tenn as I'm licensed up here in MA, but I'd suggest you seriously look into them before you get yourself into trouble. There are Federal laws that you need to research as well. I know a landlord up here that has lost their building in a lawsuit over lead paint issues. The courts aren't playing around with it anymore. 

Hi Chris,  my question would be  how soon after  she bought the property  was the report listed in the database?  It is possible  that the  seller  at the time  had the inspection done  and didn't disclose it to her.  It can take some time for the inspections to get listed on the database. If you could get ahold of that report  you may have a shot  of figuring it out.  I don't know  if  a court would require her to pay for the deleading  or not. 

If any of the violations that were listed in that original report have been deleaded the building will get flagged for unauthorized deleading, making it impossible to get a certificate of compliance. You would then need to jump through some hoops to get a letter of Environmental Protection in order to get any sort of section 8 or state money.

@Michael Dunn I just skimmed through MS law and found this...

Can an individual perform lead-based paint activities in their own home? Persons who perform lead-based paint activities within residential dwellings they own and occupy are exempt from the regulations unless the residential dwelling is occupied by a person or persons other than the owner or owner's immediate family while these activities are being performed, or a child residing in the building has been identified as having an elevated blood lead level as determined by the United States Department of Health and Human Services; Centers for Disease Control and Prevention.

It was in these FAQs... Common Questions Concerning the Lead Based Paint Regulations

It looks like as long as you own it and "occupy" it, you're good to go. If, however, you're converting it into a "targeted" property (a rental where a kid will live), you need to get certified and follow RRP guidelines and lead abatement laws. (RRP and abatement are 2 different sets of laws) If you plan to live there and do the renovations, then decide to live elsewhere...........

Also, and this could be key for you, in MA where I'm licensed, if the house has never been inspected (there is a database to check) the homeowner is legally allowed to renovate the property as they see fit. They can't specifically delead the property, but if they're replacing old lead painted windows with vinyl replacements to improve the property, it's legal. If they're repainting the exterior because it looks horrible, not to get it to pass a lead inspection, it's legal. They do have to follow RRP rules, but everyone is supposed to anyway. 

You can find links to all the laws, both your state's and federal, here... Mississippi Lead Based Paint. It's a little confusing, but keep in mind that most of what they're talking about in terms of who has to get regulated are people that intend to get paid to do this to other people's properties, not the general homeowner.  

Cleanup is the key to making the property safe. IF you do the exterior work yourself, make sure all the windows are closed so the dust you create doesn't get in the house. When you're done, wash all the window sills and window wells with TSP (any hardware store will have it). Use a HEPA certified shop vac to clean up in your house. No, a HEPA filter in your old shop vac isn't good enough. You can probably rent one. If not you can get a cheap one for about $400 around here. You can also check Craigslist for a used one, a homeowner might have had to buy one to get out of a lead jam and only needed it the one time.

It might be cheaper to vinyl side the house then to have the house scraped and painted. It's the scraping part that's the issue. 

Popcorn works great in the snap traps. If you get the kind that the trip plate has holes in it like a piece of Swiss Cheese, you can wedge a tab of the popcorn into the hole. Peanut butter dries up, the popcorn just gets stale, but still attracts them. You can use it over and over. 

I lived in Lowell MA across from the Prince Spaghetti factory. When they closed that factory, the neighborhood got overrun with the mice that used to live in the factory eating the pasta. I was killing 12 mice a day with traps with popcorn. I finally moved out after a couple months of it. There was no stopping the invasion, I was considering the Pied Piper. :)

I've been looking for an investor a similar scenario. Here's the arrangement I came up with...

Investor funds the flip and rehab. I find the deal and rehab it and get it sold. Basically the investor only has to put up the money. I'll do the rest.

The house goes into both of our names with the clause that if I don't have the house rehabbed and sold in 6 months, my name comes off the deed (see below).

I draw a check for labor weekly, but the total paid to me during the rehab gets deducted from my half of the profits (see below). I have a family to support and can't go a month without getting a check. I'm a single dad with custody of 2 kids, they have to eat! If I'm not getting paid on this house, I'd have to be taking on other projects and speed and quality of the flip would suffer.

It looks like this (using round numbers of course)...

Acquisition: $100,000

Rehab (including my salary, let's say $6000): $50,000

Sale: $225,000

Investor gets $150,000 back (all out of pocket expenses). To continue using simplified round numbers, lets say $25,000 in holding costs (Realtor commissions, taxes, etc.) which leaves $50,000 profit. Investor gets $31,000 and I get $19,000. (My $25,000 of a 50/50 split, less the $6,000 I already got paid.) Investor actually makes a few thousand more then I do on the deal.

If I can't get it sold in the alloted time, yes, I still get paid for the work I did on the house (my kids still got to eat), but the investor still gets the finished product. By removing my name from the deed, the sale price can be immediately dropped by $19,000 and the investor won't lose a dime on the sale, they'll still make $31,000 profit!

So with all that being said, if there are any investors that would want to get in on it, I'm listening! :)

@Bill Struthers - It's not always that exactly. And that's kind of my point. Every situation is different, and there are multiple sets of laws at play with each. You have your Federal Laws (EPA), State Laws, and City Ordinances that all need to be followed. There's different types of inspections, there's different types of hazards, there's different types of deleaders, and there's different types of ways to deal with the hazards. There's a bunch of crazy laws in the mix written by politicians sitting in an office who never rehabbed a property in their life and should not have been writing laws on the subject. They even have laws on how thick the plastic drop-cloths and trash bags have to be. I'd be willing to bet that not many of you know that I'm required to vacuum off the outside of the full trash bags before I bring them out of the work area. All my tools have to be washed before I bring them out of the work area. The plastic drop-cloths have to sprayed down with water before I can fold them up, and they have to be folded a certain way before I throw them out. If I don't have my HEPA certified vacuum on site to vacuum off the bags, I will get a $32,500 fine. Some of the stuff is just absurd and all it does is add considerable time to the job, which in turn adds to the labor costs that the homeowner has to pay.

In MA, if you're getting a Post Compliance Inspection (which means that you already have a letter of compliance, now you're turning over a tenant and getting re-checked to make sure everything is STILL in compliance) the homeowner has 30 days to fix any issues themselves (or by hiring a handyman, etc.) without having to get certified. But that's because the big stuff has been done and the only real issue will probably be peeling paint or missing siding (low or moderate risk hazards). You would still need to follow the EPA RRP rules, but you can do it yourself. However, that's not true for every situation. 

The best thing an investor can do if they want to save money on lead paint issues is to get certified to remove it themselves. Then they learn the laws that apply to them and they won't get themselves in trouble. You would only be allowed to work on your own property, and you have to do the work yourself, unless you have your "agent" get certified (son, brother, father, friend you're going to pay to do the work, etc.) but you will save money. If you already do the maintenance on your properties yourself, then that's definitely the way to go. If you don't have the time to rollover the unit, then it's best to hire someone who's already licensed. Otherwise, you're risking breaking one, or several, laws doing the work which could seriously hurt the rent-ability of the property, which is what happened to the house in the original post of this thread.

@Tim Ryan, I misunderstood, I thought you were doing it yourself, which in some cases is legal. 

I don't cover baseboards or trim with luan either, looks too cheap. In my opinion, it hurts rentability, unless the owner is going for low income, I replace them. The owner on the one I just deleaded  said "Half the renovation is done! What a bonus!" Then he hired me to finish the reno. since I had already done half. 

I'd love to take a look at your next one. I've outbid competitors by several thousand dollars in the past. Maybe we can develop a working relationship beneficial to both of us. I usually come in $1000-$2000 cheaper per unit. I do that by not guaranteeing that the dust wipes will pass. If they fail, I charge to come clean again. From what I've learned talking to inspectors, most deleaders assume they're going to fail and put additional cleaning into their estimates. I assume I'm going to pass, so I don't think it's necessary to pad the bill to allow for recleaning. I haven't failed one yet.