All Forum Posts by: Edward Burns

If you like the look of the laminate stairway, then try matching the color with minwax. Add pure quartz sand to the minwax (sand is available in the paint dept of the box stores and I imagine paint stores). Scuff the laminate surface with very fine steel wool and apply the minwax/sand mixture. The sand should provide enough texture to reduce slipping but not enough to cause abrasions in case of a fall.

It basically comes down to this, If I lived in Denver would I use this brokerage for a real estate transaction. Providing the service level is the same or at least close. Yes, I probably would or at least I would consider it.

Now, if I was asked to invest in the company, then no because the business model has not been proven successful. If I was a real estate agent would I join this company, I do not know as other factors come into play.

@Charlene Blandon

Buying a rental property at using the 70% ARV rule is a good idea if the rent justifies the investment because it gives you another option for usage of the property (i.e. if adequate final financing can not be obtained you can sell it and still come out with your shirt).

For major items (roofs, HW heaters, HVAC) look at the normal warrantee of the item. Most HW heaters have warrantees for 6-8 years, and many HW heaters need replacing at 7 - 10 years. Most asphalt shingles have a warrantee of 20 years, and many roofs need to be replaced in 20-25 years. Manufacturers have it down as the life expectancy of their products. Yes, it is possible the house was shingled with 40 year shingles but that is difficult to tell so go with the normal number.

As far as reading, yes I agree beginning with the book recommended above.

@Charlene Blandon

I think you are confusing flippers with buy and hold landlords.

Flippers look for deals where their cost (property, carrying, improvements, etc.) will be less than 70% of ARV (repaired value) to allow a profit when selling.

Buy and Hold Landlords look for return on investment.

A house for sale at $120K which needs $10K in repairs to be worth $200 K , would interest a flipper. But if the same house could only rent for $1K/month a Landlord might not be interested. On the otherhand, a $60K that needs $5K in repairs and would be worth $70K when complete would not interest a flipper, but if it could rent for $1K/month a landlord might be interested.

The 50% formula builds in many items but is intended to allow a quick analysis of whether a deal has decent profit potential. It makes assumptions about taxes, insurance, vacancies etc. and it does not give you a detail analysis of a particular property.

In you case, it may be that you have yet to face replacing any major systems, but as a rule figure on a new roof ($8K) every 20 years (or $400/yr), HW heater every 6 years ($100/yr), HVAC systems and other big ticket items that have long term lifespans. If you have not had to replace these yet, then yes your apparent cash flow will higher right now. But if you do not budget for them and saved money towards them, you can run into financial difficulties when they occur. I know you will think, oh well, when things get old I will just sell and let someone else worry about it, but if you note, experience investors here frequently indicate that a potential buyer check on the remaining lifespans and adjust their price accordingly.

Besides the above, high rent property and low rent property do not fit the model as well as mid-range rentals.

@Bill S.

While source of income may or may not be a protected class, there is no doubt that discriminating because of a handicap is illegal. Almost everyone legitamently receiving disability (whether SSI or privately) is handicapped in some way. That opens a big grey area, that I would not like to defend myself against.

I agree the police department is a good starting point, but please use their non-emergency number. 911 is intended for emergencies only, and locating buildings with code violations is not an emergency.

Contact the local chamber of commerce(s), they can provide that information or knows who has it. This information is routinely provided to businesses (particularly those looking to move into the area), investors and others that have an interest in the area.

At first glance with the numbers provided it looks a little tight. But probably worth investigating a little further to get better numbers.

Monthly rent (1710) - expenses (50% or $855) = ~$855 - 600(PITI) = $255 profit per month. If rents can be raised some (3-5%) or purchase price lowered it might be a good purchase. With the building being 50 years old, I would make sure the Heating system(s) are checked thoroughly.