All Forum Posts by: Jerry W.

@D'Andre Byers, welcome to BP.  There are a lot of threads on this topic, I have been in many of them.  My wife was against buying any real estate other than our primary home.  We started off in a trailer house in a trailer park, sold that and b ought a piece of land and put a trailer house on that.  Moved out of that and finally bought a house while keeping the trailer and rented it.  The renting was a disaster, but we kept it for several years and got most of the rent.  When the rental sold the check paid off our entire mortgage.  I now own close to 30 doors, and my wife has been against buying everyone of them.  Some we have argued over, but not many.  It is great to agree, but may never happen.  My wife is a very talented musician, but there is not much money in it.  She is a dam good secretary and book keeper.  She does play piano for the church and local high school choir, but makes very little at it.  I explained to her that I have never ever stood in the way of her dream to play beautiful music, even though we actually lose money on it.  I hope she would not stand in the way of my dream to build a solid real estate company.  It is my hope that my company will eventually make a LOT of money.  Can she live with you having a dream that is not hers?  Does she have to control that part of your life?  However you need to understand her position.  She may have a genuine FEAR of losing it all in real estate like her dad did.  Seek to understand before you seek to be understood.  You need to understand why she doesn't want to do this.  If she will not share that with you, it won't work.

My wife and I compromised, all of the rental houses are in my name only, and some of the assets are in her name only, and our house and other big real estate items are in both names as tenants by the entireties.  Since she is not involved in running the real estate business any risk is mine alone.  After doing real estate for nearly 25 years, I recently lost my regular day job that had a pretty nice paycheck, great benefits, like health insurance, retirement, etc.  I of course had a private business I ran that I can ramp up to make a living off of, but it was scary to my wife.  When I sat down and showed her our net worth, my real estate was worth nearly double all of our other assets that we acquired from our 38 years of marriage.  It was an eye opener for her.  She complains that she never sees any benefit from our real estate, but it truly has given us financial security.  It is my hope that it will someday give us financial freedom.  Life is great if you can pursue a dream together, that might not be possible, but if her requirement for being married is that you give up your dream, it won't work.  Good luck bud.  Just remember that her fear is real, and you have to understand where she is coming from, and she has to understand how important real estate is to your dream.

Good job bud.

@Frank Rolfe, I don't want to hijack this thread, but I had a guy call me today to see if I wanted to buy his 9 lot trailer park in Worland WY.  It has 7 trailer on it and the park owns them all.  The idea actually scared me when he explained the deal, as the newest trailer was early 1970s.  I have bought 2 trailer houses this year, a 16 foot wide and a double wide, both on 2 city lots and in very good shape.  I also bought 3 houses this year, but resold 2 of them.  So buying houses doesn't scare me, but the amount of work and drama of owning a tiny trailer park in Worland WY in a declining market seriously scared me.  Your post however at least gave me a rudimentary base of knowledge to use to look at the deal a little more intelligently.  Thank you for the quick education.  Thank you for sharing your knowledge with us.

@Tim Y., you need to load votes on this guys posts, he gave you amazingly good advice and information.

@Michele Velazquez, first where do you live?  Next why don't you start looking at places you would like to live and then check all of the air B&B and VRBO sites and see how much they charge and how full they are booked?  That will hopefully get you started.  Asking us to tell you where to invest in for the entire US is a little bit broad of a question.  How much do you have to invest?  Some houses start at $50K some start at $500K some are a lot more.  You also might tell us about your plans and why you picked STRs.

@Tashina Taylor, you have to make the deal fit your abilities.  Right now Gillette is probably the best place in Wyoming to buy real estate in.  It has been hit dam hard by the coal mines closing and cutting back.  There are lots and lots of places you could probably just take over payments on.  One big problem, there is no retail market as so many folks are leaving.  Gillette has always been boom bust, but is heavy into the bust cycle now.  It may not fully recover.  I believe that coal is still viable, but it will never have the demand it used to have.  Even the rental market is bad there right now due to so many folks leaving and there being an over abundance of houses.  I am sure Gillette has more foreclosures than any place in Wyoming.  The good news is that there are still some good paying jobs there.  Get to work and start saving some money up.If I were moving to Wyoming to get into real estate right now I would probably pick Casper.  Prices are down a bit, but it has a pretty strong economy, it will come back.  Cheyenne is nice, but way more expensive.  You and your spouse need good jobs to be able to afford to buy real estate, and to build up a nest egg.  There are good deals out there.  The places with the slowest economies will be cheapest, the ones with booming economies will be the most expensive and least likely to find a deal in.  I have bought 2 houses this year for $35K each.  They were obviously in pretty bad shape.  I mowed the yard, fixed water and sewer lines, put a new roof on one, hauled countless loads of junk off, put some paint on, and was able to sell one for a $10K profit after only 2 months.  I worked a day job during that time.  It can be done.  Build up a nest egg of savings.  Watch the local facebook sale pages for deals.  Watch craigslist, and even the newspaper for sale by owner adds.  Some one will be behind on their payments and want a few thousand to move to a new place.  The first $35K deal I paid the guy about $7K cash over what the mortgage was.  There was only $27K left on the mortgage but he was about 5 payments behind, I caught them up.  I did the work, and I sold it.  Every penny of that profit went back into another real estate deal.  Start learning the market, start calling folks selling their own houses.  Even if you don't buy it, you can practice asking questions on how much are you behind, how much is left on the mortgage, why do you want to sale it, etc.  Learn to empathize with them, yes, the mine closing was horrible, etc.  Good luck.

@Terry Tosh, Wyoming does not have an income tax.

Wyoming is a very landlord friendly state.  We did pass a law a few years ago that requires a landlord to provide running water if it was originally provided in the rental when it started.  Evictions usually take 3 to 12 days.

Interesting, Thanks @Steve Vaughan for the heads up.  Hopefully it is fixed now.

@Rebecca Helm, I don't have a lot to add, as a lot has been covered already.  First you really have to know if this is a good deal from market value standpoint.  Is it $50K above or below market values?  My guess would be it is above.  Folks rarely start off with a price that is below market.  That leaves room for negotiation.  Even if the value is good will it make you money or lose money.  This deal does not leave any room for positive cash flow.  To make matters worse I do not see an allowance for vacancy.  I always put an 8% variance to account for vacancy.  This makes your bad cash flow numbers even worse.  You would have to get some significant price considerations in order to make this cash flow.

On July 1, 2019 an extremely bad hail storm hit the town I live in.  Every roof I own is damaged, some roofs are badly hit, some siding is ruined on one or 2 sides, many windows are broken, and there is broken glass inside some houses, even rain gutters are beat up.

Here is the deal, I have 24 buildings spread across 5 insurance policies, and even 1 or 2 buildings with no insurance.  I have met with several adjusters, I have talked with numerous insurance representatives, multiple contractors, and the information I am receiving varies wildly.  the town is flooded with storm chasing contractors who are literally going door to door to get contracts signed.

I would like input from folks on how to handle these claims, what can be challenged, what can not be challenged successfully and how it works.  I plan to chronicle the events on here to perhaps help others be ready and more prepared to handle something like this.  Keep in mind that no one probably keeps an emergency repair fund large enough to pay to replace every roof in their rental stable.

Areas that I will try to address as I get answers:

1. ) Do insurance companies pay the entire cost of a new roof or do they only pay for the depreciated value.  There appears to be recaptured and unrecaptured depreciation.  This may vary between policies and coverage and insurance companies.

1. a.)  What if your roof has 3 layers of shingles?  Will they only pay for stripping off 1 layer?  If it has asphalt over shake shingles what will they pay?  and finally If your roof does not have drip edge or ice guard on it will they they pay to have it installed on your new roof?

2. ) If your siding is damaged and the type of siding is discontinued will they pay to replace the entire house siding, or only the side that is damaged?  This appears to vary by state.  The adjuster who looked at my siding said they will only pay for the side that is damaged.  He said that is the rule for this state.

3. )  What if the price the insurance gives you for doing the roof is lower than the bids you get from contractors?  Ie, they pay $350 a square to replace roofing, but your bids are $400 or $450 per square?

4. ) If your house had paint knocked off of it on one side will they pay to paint the entire house if you cannot find matching paint?

It appears that some of these answers may be decided by the state insurance commissioner, clearly others are based upon your policy.

Here is what I have been told by one insurance company.  We only pay for the side where the siding was damaged regardless of if you cannot match it.  We will pay to strip off all layers of shingles, but will not pay for new decking unless the hail was what damaged the sheathing.  In my case it is asphalt over shake shingles, and the shake shingles are on 1 inch by 4 inch boards with a 4 inch gap inbetween them, so all new sheathing is required.  One insurance company said their deductible for hail is different than any other claim so the $1K deductible for say a fire, is now a 2% deductible of the total value of the house insured amount.  So my deductible on a $100K house is now $2K, plus they take out the depreciation of the old shingles.  A 20 year old roof with 30 year shingles that costs $6k in shingles is depreciated by 2/3s, so you only get $2K for shingle costs, and then take out the deductible.  The good news is that where both windows were broken out they pay to replace the carpet, not just clean it.  There is no depreciation on labor costs.

Any feedback from others who have weathered this storm (pun intended) is welcomed.  I will post my experiences as I learn, in hopes of helping others. 

P.S. My insurance agents did not know the answers to these questions, so ask yours now.