All Forum Posts by: Jan Kutrzeba

@Tim Herman

Thanks Tim. Inspector said the roof has at least another 5y on it and his photos didn’t show any visible problems. Then we had the roofer go up there a couple of months later and there was a big hole in the chimney, a big hole by the edge near gutters, and a bunch of other visible problem areas. Do inspectors intentionally miss these not to kill a deal? I even spoke to an attorney about this thinking I’d sue but he said it’s not worth it as inspectors have solid disclaimers in their contracts.

I didn’t climb on the roof myself as it’s very high and I didn’t wanna risk my life having my wife pregnant with no life insurance.

We bought the property with our last savings (a big risk) and I had my toughest year as a real estate agent so far (made a lot less $ than the year before) so had nothing left for reserves. The management company fronted all the money for repairs and have now started to charge 10%/month in interest as a lot of their landlord clients were carrying high balance, they say.

@Joe Colasuonno

Thanks Joe that’s quite an impressive portfolio! My house counts 1332 SF.

The previous owner had tenants there at $1100/month. However they were months behind their rent and had to be evicted so I guess it doesn’t count. It took us a couple of months to get a tenant and had to go as low as $900 in rent as I desperately needed someone to start covering my mortgage ASAP.

@Joe Villeneuve

Thanks, Joe. Something inside me tells me I needed someone to spell it out for me.

@James Perdomo

Thank you! Let’s connect.

@Corby Goade

Thank you!

@David Taylor

Hey David sorry so sporadically here... decided to buy a SFR in Allentown PA for a 20% down 30y conventional.

Hi BP,

I need your advice on whether I should get rid of my problematic out of state SFR rental property or take a loan to gut it.

It's a 120-year old 4br 1ba SFR in a not-so-good part of Allentown, PA - very typical to the area. We bought it in May 2019 for $66k. The tenant pays $900/month and all utilities, my PITI is $517/month, I pay 10% to the management company to collect rent, do quarterly inspections, repairs, and evictions if need be. A generous cash flow of $290/month IF it weren't for something constantly breaking.

We bought it in May 2019 with bad tenants. The eviction took (all in all) about two months + a 3wk bed bug treatment $900). I had to put around $5k in junk removal and repairs (wall, gutters, electrical, stove...), while also putting a lot of sweat into it myself (cleaning, painting, caulking, minor repairs I knew how to do). We got a good tenant by mid-October. My cash flow has been murdered by repairs that keep adding up. The latest quarterly inspection showed

- sewage leak in basement

- door and window issues

- toilet sinking into the floor

- weak spot in the roof (leakage)

Estimated repairs possibly in the thousands (waiting for a quote). The problems seem never to stop. I’m already losing my sleep over this house. My wife doesn’t even want to hear about it anymore.

Now, what would you do? In my mind, my options are:

- sell asap and let someone else deal with the issues. Realtor says I’d get max $75k.

- take a loan, put some $30k into renovations and charge higher rent (max $1200 in this market)

- fix for some $30k and flip, which (per my local realtor) is not an option in this market

It's important to note that SFR is not a strategy I want to stick with. Owning +100 SFRs sounds like a nightmare to me. I want to move into multifamily investing. So from the strategy POV there's no point in me keeping this property. I never expected to make money off of it (certainly not get rich, obviously), but I also don't want to lose any. The main point for me with buying this property was to take the first step into REI, to take action, to pull the trigger, and to learn - the whole journey with this house has been a phenomenal learning experience (albeit painful). I guess the main reasons I'd want to keep the house are 1) ego - to be able to say "I own a rental property" and 2) hope for things to magically turn around and one day sell for profit (gambling...)

What would you do in my shoes?

@Ivailo Dimov

“Bad” is very subjective. I have a property in Atown that’s south of Tilghman and close to 8th St. 12% cap and beautiful cash flow with a great tenant with a near 800 credit score. No problems at all. I don’t think Atown has a bad neighborhood compared to Philly, for example. My prop mgr (big player in Lehigh Valley area) says the properties in these “bad” areas in Atown, Bethlehem, and Easton perform the best.

@Frank Patalano

Thanks, Frank! Really appreciate your encouragement!

@Fadwa Mufo

The whole Bigger Pockets curriculum ;)