All Forum Posts by: Frank Woodin

Great Job on the building, it looks fantastic.  It is not wonder you are not having any problems with selling the units!

Also thank you for the narrative, it has been great to follow along all this time with your project.  I appreciate you taking the time to do it.

Your father can always appeal his taxes through the tax assessor.  Every assessor is different in how helpful they will be on walking you through the process if you want to do it yourself.  I know several realtors that will give you comps to use in your appeal for free because they hope that you will use them for a purchase or sale in the future.    The other option would be to get a lawyer do the appeal for you. My lawyer almost always wins and I only pay him half of one year's worth of reduction in tax bill.  So if he his able to reduce my bill from $7200 to $6200 then I would owe him $500.

Most people don't appeal their taxes and if they knew the actual value they are being assessed at they would probably freak out.

I would go with option two as well, the advantage of option two is that if you were to find a property that had below market income you could potentially raise rents, install laundry, rent out garage space etc. and thus increase the value of the property since it is a 5+ unit complex.  You could much more easily justify the increased value of the property and pull cash out and use that money to invest in your next place.  The key would be to find the right place that would be either undervalued and/or less income that it should be generating and you can rectify that problem and reap the rewards.  Just my two cents....

I would suggest you talk to a CPA first but....

When I buy a place my goal is to defray most of the income with depreciation and other deductions.  I also want to make sure that the price of the property is as high as it can be but I do take the above example as repairs, the cost of a property (without the land) is depreciated over 27.5 years.  Depending on the "repairs" you can depreciate those on an accelerated schedule (consult your CPA).

Your CPA would better give you the exact numbers for short term and long term ramifications of your decisions.

1.  Get a Job (in the RE field if you can)so you have some income and can show steady income

2.  Find a Real Estate mentor near you that you can work with for Free, you can learn from him/her while you gain knowledge and experience and they get your labor for free so it's a Win/Win for both.

3.  Pick up the Book on Low and No Money down written by

@Brandon Turner

Those three things should get you moving in the right direction quickly

Good Luck, I wish BP was around when I was 18!

You could have an HVAC guy come out and take a look at the units.  I once had an AC that looked like it was on its last leg and had a guy come out, once he got done checking it he said I was good for another 5 years in his opinion.  Some of the older HVAC units were actually built relatively well as long as they were not abused they will last a while.  

When I buy an HVAC unit you have to take into consideration the cost of unit and the possible rebates.  If I am not the ones paying the bills I don't put in a high efficiency model and I have never had a renter ask or make mention of it.

I usually source my HVAC units from an independent HVAC installer since I can bargain with him more and he gives me a good deal because he knows he will get more business from me because of the amount I use him, which is much more than a regular home owner. You can buy them from a wholesaler online but I have been told that if you do that and it is installed they may not honor the warranty because it wasn't done by one of their installers.

The other thing you have to consider is that if you raise the rent by $200.00 and then don't rent it out and your rent is $2400.00 you will have lost all your increased profit ($200.00 X 12 months) in one more month of the property being vacant.  I once tried to get an extra $100.00 of rent on a place and should have just lowered it down to what I thought would be a good number based on the market and would have netted out an extra $200.00 over the year (the rent was $1000.00 at the time).  The key is see what the market says and I agree with posts previously about a good number of the people who call or reply won't be up to the standards you will want to rent at.

I agree with what is said, sounds like this could be a guy who could be a mentor.

I will tell you that even through the person is a mentor to start it can evolve from there.  My first mentor was just going to "show me the ropes" on his next deal and once he saw how eager, how hard I was going to work for it, and what I had already known about rehabbing he brought me on as a partner with another investor and we still are going strong 9 years later.  

Most real estate investors usually are open to helping people out because that is probably how they started.  I say you approach it that way and then build the rapport and see where it leads you.

Typically no but it all depends on how your structured your deal and the clauses you have in the contract that will allow you to get out of the contract.  If you put earnest money down to secure the property from the owner and then decide not to follow through on the contract without a viable out that was written into the agreed upon purchase contract you would then forfeit the earnest money.

I agree with all of the above of what everyone one posted.  I would also add that you might want to look at when your "new" lease will end if they sign a new lease.  I made the mistake a while ago of having one expire in November and it took until February to fill it. So instead of putting myself in that problem again I now will make a 15 month or 16 month lease to get me back to an April move out date because the weather is better and people are more likely to move then.  Since you are in Connecticut this might be an idea, since I am in Illinois this seems to work really well.