All Forum Posts by: Rick Baggenstoss

@Jose Casanova. How severe are the unlevel floors?  Dangerously unlevel?  Will rents go up when you fix it? 1/2" down?  You really gotta get an understanding by looking at it.

Which story is settling? First floor kitchen?  Can you see it outside or just inside?  

By the way, I think settling is a catch all.  It implies that the ground underneath dropped because it wasn't compacted when the slab was built, but I doubt that's the case.  Do you have a drainage problem outside - near the settled area?  Water and/or vermin will tunnel under the slab to cause settlement.  Tree roots can do the same.  Your approach likely depends on the root cause.

There are a few of approaches to fixing a settled slab.  1.  Pick it up - e.g. concrete injection; 2. Pour over - leveling cement; 3. Tear out and fix.  

I wouldn't pick a path without understanding the cause.  I would also make sure I had a goal to fixing it -- reduce my liability and/or increase rents but not to fix things to perfect because that's the way I like 'em.

A structural engineer is overkill depending on the severity.  I'd start with some vendors  who will give you some outrageous quotes, but they'll help you understand the root cause and their approach to fixing it. 

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The list of nearly 30 vendors covers many of the areas you need on your team.  Come meet these vetted vendors, enjoy some beverages, and hors d'oeuvres.   Afterwards, we'll grab dinner and drinks at Taco Mac around the corner.

Uh, the cart is before the horse.  You said you've already signed a lease and a lease option with him.  

The lease should stand alone and so should the option -- two separate documents.  Credit from the lease towards the purchase ... sounds like a no-no.  My first bit of advice is to find an investor's closing attorney and have them help you with your paperwork.  

His option to buy your house sounds fuzzy.  However, it sounds clear that he never gave you the option fee.  He did feel like the option was still available and that you'd keep it available for some time.  Was he paying above market rent?  Was there a deal that he could pay the option fee later?

Terms matter a great deal --- not just equity.  It also matters that you're considering doing something subject to which requires trust and cooperation with both parties.  Doesn't sound like that's the case here or that it will be the case down the road.

@Jake Turner. You're probably imagining wholesalers sell properties for less so you can make money, right?  Think again.  Most of the time, this is not the case.  

I'd suggest you hook up with a reputable real estate agent (not an 'investor brokerage') and start evaluating opportunities with them --- pick an area of town and then narrow your agent to a few who have time for you.  Additionally, scour Redfin and Zillow for deals.  Remember, ask price doesn't mean sale price.  Practice making offers.

Last but not least, I don't know many investors who don't pick up a few properties they find for themselves.  These are, by far, the best.  You might want to start on this effort.

Good luck!

Try finding tenants through Zillow or similar first.  There are lots of people who are willing to rent, furnished, utilities included, for months at a time.  I set my furnished rate at 2x unfurnished, as a rule of thumb.

For payments, deposits, communication, leases, etc.  I used Apartments.com.  Zelle is ok if you have more turnover.

Airbnb/VRBO take a big chunk and you give up control over screening tenants, resolution of issues, etc.  It can be a big challenge, but they have a huge audience so if your house is going to bring in vacationers, then it's a must.

Tenant communication for bookings, pre-check-in, post check-in check up, pre-checkout reminders, etc. it's helpful to use software so these are automated.  I'd get things going before you launch it, but it's pretty cheap for what you get.

In the City of Decatur or outside?  It's two different permitting offices.  Definitely want an architect for the City.  They have a higher standard for energy efficiency you wouldn't be able to get without an architect.

If outside, you might get plans from someone like Liberty House Plans that fit your style, lot, etc.  It's a very long process.  A local architect might be helpful to reduce the iterations, but you really need a Structural Engineer to stamp your foundation and framing plans.  OR, you better have a good sense for what's required.

Good luck!

Insurance companies hate rentals.  Most will exclude theft/vandalism after 60 days vacancy.  Assuming you have coverage, after deductible, depreciation of the items like cabinets, etc., your recovery will be limited.  Definitely do the math.  

Loss of rents is based upon the time required to fix the repairs from their point of view.  Replace cabinets, paint, new locks, etc. might only be 5 days.

I'd hesitate to turn in a minor vandalism claim.  It's usually not worth the hassle including searching for new insurance.  We, investors, need to self insure against theft/vandalism as much as possible.  

if you're not moving walls, then just call an electrician and a plumber directly.  You need to be clearer about your scope, e.g. replace the knob and tube or properly label outlets not-grounded and wire smoke detectors.

Splitting the meter is probably not worth it.  You can charge tenants an additional 'water fee' per month.  You do run the risk of abuse.  

@Katlynn Teague. I would encourage you to hang your agent's license with another firm -- broaden your client base and work with more reputable buyers/brokers. 

I went to a meetup where the Atlanta Fed Bank was the speaker.  They weaved together compelling evidence that we were heading for a 10 - 20% drop from the peak in avg. house price.  Keep in mind, we're up 40% since start of pandemic.  

Longer term, I think we'll continue to see a lot of demand from population growth, job growth, and house formation.  Supply will be constrained in a year or so, but we're still seeing a lot of supply hit the market while demand is very low.

They didn't comment on rents.  I suspect rents will soften a little too in the short term but remain strong long term.  Specific zips around Atlanta will have wildly different results.