All Forum Posts by: Jim D.

The house has to get uglier before it can get prettier :)  Once you've done it a few times, you can see through all the chaos and envision what it's going to look like in the end, but your first time it is stressful. My last couple steps are usually flooring and paint, and that's when it actually starts looking great. It sounds like you're on the right path... just stay the course!

I always budget an extra 25% budget for surprises, and almost always use the entire thing. I also take my best guess at how many weeks the rehab will take and then double that, which is usually about right on. Having that mindset going in will help reduce stress when surprises and delays inevitably happen. 

While they are hard to find, the first option would almost surely give you the best return. It's the same as #2 except the entire time you live there, you'll receive $12,000-18,000 a year in rental income from the other unit.

I'm a little confused; do you live in one of the units right now?

Definitely not a requirement for most renters here--I would say most would just view it as a great bonus if you have it. Most renters are used to putting up window AC units for the 2-3 months of the year it gets muggy. I think Ben is correct with around a $50 estimate for rent increase. 

It's not always that simple to add one on to existing furnace systems though; I recently got a quote on adding one and it was much higher than I expected.

A friend recently had a sewer line back up at his duplex on a Saturday night which resulted in about 4" of standing sewage in the unfinished basement. After the blockage was cleared, the basement drained out but was left with the very pleasant smell and residue of sewage all over. Wanting to get it cleaned up for the tenants as soon as possible, we decided just to go for it and clean it up ourselves. Ended up having a pretty good time since he's a really fun guy to hang out with and has a great attitude, and had it sparkling clean by midnight.

The next day we were playing some music and he started singing about the sewer cleanup. Thought our lyrics might be worth sharing here as many of you know the feeling of dreaming of your ROI while wading through crap (sometimes literally).

Sung to the tune of "Killing Me Softly"

Pushing the turds with my broomstick,
Spilling the bleach on my pants,
Throwing my shoes in the garbage,
But they're paying my mortgage, my mortgage,
Paying the whole thing, my mortgage, 'till it's gone...

It's been a short 12 hours,
Since I sat at the bar,
Explaining to my friends how
My rentals will take me far,
A distant memory as the
Clock rounds 12 and I'm still singing,

Pushing the turds with my broomstick,
Spilling the bleach on my pants,
Throwing my shoes in the garbage,
But they're paying my mortgage, my mortgage,
Paying the whole thing, my mortgage, 'till it's gone...

It's true, the first of each month,
I'm cashing checks at the bank,
It's true, from time to time that
The money's gonna stank.
I'd say this night is really
Putting the "a**" in passive income,

Pushing the turds with my broomstick,
Spilling the bleach on my pants,
Throwing my shoes in the garbage,
But they're paying my mortgage, my mortgage,
Paying the whole thing, my mortgage, 'till it's gone...

I use Ryan Wickstrom at River Valley Insurance for my flips. PM me if you’d like his contact info. 

Make sure to specify whether the house will be vacant as that changes the type of policy you need.

I house hacked three properties in Millcreek between 2013 and 2016; one regular single family and two with mother in law apartments. Highly recommend it, though I'm sure higher prices have made the numbers tougher now. Send me a PM if you'd like to chat!

Great work, and a lot learned. Way to go for it. 

I also think you're off on your profit calculation... looks like you're double counting something. Here's what I got:

Sale price: $217k
Purchase ($153k)
HML interest ($1k)
Rehab ($21k)
Holding costs ($3500)
Net profit: $38,500 

That's also assuming you had no closing costs and no agent commissions when you sold, though I'm assuming you probably had $2-4k in title transfer tax, title insurance, etc. plus likely a 3% commission to the buyer's agent which would be another $6500. I think if you check those your actual profit is around $30k (still great).

@Account Closed In general, 49504 and 49505, and 49503 would probably be a good fit for what you're describing. There are different pockets in there, but in general they're not too expensive and are kind of middle quality neighborhoods that are great for rentals. 

I wouldn't worry too much about finding a value add, though of course it's always nice. If I could continue buying turnkey rentals at market price using 3-5% down payment loans (with no value add), I'd do it all day. It's the highest ROI you can get due to the tiny amount of money you actually put in. (I do a lot of value add purchases as well, but low down payment turnkey is my favorite by far.)

In my case, I did three single family owner occupied in my name only (careful not to put my wife on the loans or titles). Then my wife in her name did a HomePossible conventional loan for first time homebuyers and bought a duplex, and then another owner occupied duplex that was a unique portfolio loan.