All Forum Posts by: Steven Maduro

I had two properties that were going vacant at the same time
one was a dead beat tenant that I had to evict after she only paid two months rent.
the other was on a house that I basically just put someone in to keep a person in the house to make sure it was occupied and wouldnt be vandalized.

I have a dedicated contractor who will do good work for cheap but he was unavailable and i was cash poor.
it looked like I may have had to just let the properties sit until I could come up with more money.

then I got an idea rent the place as is
take off the money I would have paid my contractor to do some of the work and get a handyman or licensed trade skill type guy. t rent it.

I ended up getting a skilled tradesman in each house.
one guy is an actual house builder that hit bad times during the recession the other guy works with his father installing and remodeling bathrooms and kitchens.

both these guys came signed the lease
on the first tenant I allowed him to move in with security plus 200.00
the difference was the paint and drywall repair and cabinets stained and house cleaned. that I would have paid someone else to do out of pocket which I didnt have.

gettting that money allowed me to take care of a 350 plumbing problem and a furnace issue that came up

the other house
the guy moved in for security plus 300 for the first two months less than half the actual rent because he is going to do all the painting and the bathroom remodel
some drywall repair and hang ceiling fans.

he is working alongside my contractor and my contractor has now gotten a new partner and he has okayed this guy to do the work
all things worked out.

and now my two houses have some capable people in them
who wont come crying everytime there is a minor problem

I know this isnt the ideal way to do business
but I sort of started out over extended.

I wont resort to this tact all the time I just was on hard times and needed a solution

and this seems to have paid off just thought I would share.

:0

@k

you misunderstood my assessment is not the top bubble price I said the price before the bubble started.

I look at realistic prices for my model to be mid 1990's 1994-1998

if I cant find a prior sale in the nineties

I use one third of the full price of the home in the mid 2000 2003-2007
so if a house sold for 200k in 2004
I figure a realistic estimate of its current value after renovation to be
about 60k so I purchase accordingly. because I am holding I am not concerned with that sort of immediate return I am more concerned with the cash flow right now.

I am not doing gross rents that high(1300) I don't think the neighborhood will support it. I think I have a habit of underselling I did the same thing when I was selling cars.

perhaps I don't have enough confidence to ask for so much.

1300 would be 650 it is possible I could probably go to 550 we will see in a year or so for now I am comfortable

as far as safety the neighborhood doesent have that sort of crime (mugging and the like) it has its issues but not that sort of thing.

very fair and well said J. Scott.

I hope this clears things up a little.

I am a church musician I get paid very little weekly just barely enough to make ends meet.
having five rentals allows me to save money and build a retirement

while still being able to have time to practice and do my ministry

I live on my church money and i save the rental income (I may use little for things here and there) but the idea is to save as much as possible.

I dont pay mortgage or rent so my overhead is low.

as far as return on investment my thoughts were as follows

I buy properties based on what they were worth prior to the housing boom. so for example if a property sold for 98,000 in 1990
and I can buy it on foreclosure for 20k I feel I have a flippable house
but since I am renting it I consider it a flipable rental,

I consider my R.O.I to be what I will be able to sell the property for
10 years from now.
the money I get now is helping me generate more capital to purchase.
other properties later.

I am originally from NYC so I have grown up watching people be landlords turning single homes into two families or basement apartments I have grown up crunching numbers in my head watching basements apartments being built spending the nights in them
and calculating the costs of doing a business like this.

This is now my second job my church job being the first
I work at church 5 hours a week the rest I can devote to this.

the purchases were all great deals so I am already ahead in terms of what they are worth versus what was spent. after the renovations I could flip them now and walk away with a profit even in this market

but I am not ready to flip , rather buy and hold
flipable rentals and livable flips (which is where I live in the house I am intending to flip)

I am a newbie and my plan came out of necessity
I was in the car business and lost a lot of money
I needed something to do with my money and I began buying houses
the market was not ripe for flipping but I figured if I can get four or five houses and rent three i could lower my overhead while at the same time begin paying off my student loans, and save for retirement.

so that is the whole sordid tale

I only tell all of this because you two remind me of big brothers and sisters there is a hint of caring mixed in with the pinching

The smileys make it so much more warm.

I see what you mean I havent payed more than 20k on any property

wow go easy on me

J Scott K. Marie Poe

i save quite a bit of money because my contractor pays me as his laborer so in addition he doesent nickel and dime every item
plus I can do some things myself

second I dont spend tons of money on everything I bought all the paint at the oops counter so I saved tremendously on that

my faucets maybe cost 30 0r 40 more big deal

besides I dont hold any paper on my properties
so 100% of the rent goes to me not a bank

therefore I dont have to count as hard as someone who is holding paper. I always believe in passing on the savings to the consumer

Pavel S.
congratulations

I have to get one for my own place now

my tenants have better digs than I do

I imagine somewhere along the line I need to start thinking about return on investment.

for now I am thinking about providing quality of life.
Then again I am a rookie in my first year of landlording
and I have much to learn

well if as you say as time goes by a faucet breaks I will buy a new one.
if a floating vanity falls apart I will have my carpenter build a new cabinet

life is full of mishaps and surprises.

nothing I purchased was so expensive as to render it hard to replace.

FyI
both places rented it took 7 days to rent both units
both tenants seem really cool so far.

time will tell

I wanted to clarify a couple of things

First
I spent a little more on things but not a ton
for example I found a water fall faucet for the bathroom for 49.00
I found one of those tall kitchen faucets where the sprayer is built into the faucet and pulls out from the faucet housing itself
I purchased one for 70.00 from a close out place
and the other for 131 with soap dispenser and plate
it was a 300 dollar faucet that was open box returned

the floating vanity cost 313 but came with a medicine cabinet
and it looks great i think a regular vanity was about 99 and medicine cab for 40 so I spent twice the amount of rental grade

I decided to put my focus on the bathroom and kitchen
I used bead board backsplash in one unit but splurged on glass in the other
both look pretty great and look way better than blank walls

I put in vinyl plank flooring looks like oak and has a great look cost 40.00 for the whole bathroom

I did a two color paint scheme in the bathroom that is very eye catching
but the paint I used was oops paint so it cost me 5.00 a gallon
and everyone loves the way the colors balance off each other
it overall
my cost in the bathroom and kitchen was \
in fact my total paint cost for both units was 160 for 10 gallons plus three gallons so 113

I dont think I spent that much extra
but the look of pleasure on my tenants faces when they see the apartment and what they are getting

I saved money on the laminate floor over capeting
I payed 79c sqft
by buying clearance flooring

my contractor charged me 640 to install 1000 sqft with my help

I added the washer dryer closet so they dont have to walk to the laundromat That was my biggest expense

now the question is will I get more for the units

I dont know my goal was not to get more but to get exactly the tenants I want without waiitng

I dont want vacancies and I dont want tenants who will tear my stuff up
which is what I see a lot of in this neighborhood

sometimes its not just what you bring in
it is what you dont have to spend out

if I can minimize vacancies over a five year period
and minimize repair costs
that is fair compensation. in my humble opinion