All Forum Posts by: Jeremy Bartlett

Investment Info:

Single-family residence buy & hold investment in Eagle River.

Purchase price: $308,000
Cash invested: $39,000

Single Family Fixer-Upper. Needed new roof, interior/exterior paint throughout, new flooring throughout, new trim throughout, repair work to deck, and new banister. Sits in a great neighborhood. Most houses in area go for around $360K+. Negotiated $10K from seller and invested $10K for total remodel. Planning on living in it for a year or two and turning into an AirBnB as a mountain lodge feel in AK.

@Ralph R. I agree with you, but he did say rent was still coming in. As long as they’re paying, I’d let it ride until he can minimize the loss when getting replacement tenants in is easier. 

The damage is done already, why accrue additional expenses by vacating a source of income now? If renovations have to get done either way, wait until you’re in a position to handle it more effectively. How they are living in their unit has no impact on you now. Just be sure to keep their security deposit and work that into your operating budget. 

@Anthony Dooley just saw your reply too! I’ve definitely been walking through with the plumbers from the home warranty company as they’ve been coming out. I pick their brains and ask questions - gotten some great advice. Just feel like I’m still getting bit regardless of how much I’m learning and preventative measures I’m taking... sounds like I just have to stay patient though and keep learning!

@Sean H. it’s a grey area for sure but ultimately the person doing the work is responsible for the outcome of that work. More seasoned guys will be more understanding typically, but still will want a solution that doesn’t come out of their pockets... in this case the seller paid up and stopped using that contractor. 

@Chris S. we definitely have a home warranty - $1399 for the 4plex - worth every penny. Has saved us even more than I’ve paid out in insurance deductibles. We have one through HSA - but read the fine print - they only contribute up to $1500 towards a new boiler system, which will help, but still leave $10K+ for you to pay out... of you have one with a different company that does pay the whole thing I’d love to know about it!

@Billy Linn thanks for the encouragement. I think more than anything I’m frustrated with the amount of time I’ve had to put into fixing these things. Had I been able to save what I’ve had to payout and the time invested, I’d be close to another whole property by now! Just gotta stay the course though... I know you’re right.

Chris thanks for the reply!

The baseboard trim was installed by a general contractor being used by the guy we bought it from - we’ve had to clean up several of his messes. The seller did feel poorly and did pay for the first claim because it happened less than a month after we closed. 

We get our boiler inspected yearly  I just had it service by AK PowerVac and talked to AK plumbing services about its condition. Unfortunately it’s so old they told me they wouldn’t do much other than clean it, so we are waiting for it to fail and hoping we can recover to have the $13K necessary to replace it when that happens.

I do require renters insurance from my tenants, however I think only one of four have an active policy. I haven’t dealt with it enough to know how to advocate for it when explaining to new tenants. 

We also preach an open communication channel with our tenants  we also installed wireless water detectors under every sink, the washer, and the boiler room which have been worth their weight in gold because they are super obnoxious which forces tenants to deal with it right away, and it notifies us on our phones when one goes off so we can text directly to open the conversation.

Investment Info:

Single-family residence buy & hold investment in Eagle River.

Purchase price: $308,000
Cash invested: $41,000

Single Family Fixer-Upper. Needed new roof, interior/exterior paint throughout, new flooring throughout, new trim throughout, repair work to deck, and new banister in a great neighborhood. Most houses in area go for around $360K+. Negotiated $10K from seller and invested $10K for total remodel. Planning on living in it for a year or two and turning into an AirBnB as a mountain lodge feel in AK.

What made you interested in investing in this type of deal?

Quality of life increase for short amount of time from living in apartment, long/short term rental potential

How did you find this deal and how did you negotiate it?

Sniped deal off MLS - house on market only 3 days... Negotiated with out of state seller, wife was our realtor. Negotiated based on him being in a hurry to sell and us being willing to take on projects in exchange for concessions for repairs.

How did you finance this deal?

5% down conventional

How did you add value to the deal?

Sped up process for him (it was vacant and he was going through divorce), and we took burden off his plate

What was the outcome?

Living in Fixer upper. New worth ~$350-$360K.

Lessons learned? Challenges?

Ex-wife held up transaction a solid two weeks as she worked sellers car and other concessions from him before closing to avoid any claim to the proceeds. Be cautious of reasons for selling.
Rushed process a little and had home inspection, but no HVAC inspection... led to $1500 repair for bringing mechanical room up to code that was not covered by home warranty or anything else.
Over confident in timeline to deal with contractors to get work done while getting moved in. Led to a lot of stress.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Wife did a great job as the realtor and negotiating with seller going through a hard time to find a win/win for everyone!
Alyssa Bartlett with Keller Williams Alaska Group
Sveta Cross did a great job with First Rate Financial! Seamless transaction!
Christina Collins did a great job with Yukon Title!

All:

I have a 4plex up in Anchorage, AK. I've owned it since Aug of 2018 and in the last year I have had 4 separate claims filed for various water leaks that have cost thousands each... First one was trim nails driven into baseboard heating pipes that sprung a leak and flooded two rooms, 

next was a leaking main water valve in the boiler room that flooded the same unit... 

Then a bathroom sink backing up and flooding a different unit on the ground level, 

and now we are working through a leaking bathtub that flooded the ceiling of the downstairs unit below it... also had a few leaks from the washer drain valve and small leaks in the boiler room that haven't failed yet, but at this point I feel like its only a matter of time. 

Does anyone have any advice of what steps I can take to fix these repeated claims? It is to the point that every text I get my mind jumps to a tenant notifying me of another leak and my stomach drops until I read it... I filed the first two claims, which drove up my insurance costs $150/mo... and handled the third one myself - which I am also doing with my newest water damage claim out of fear of increased insurance costs again... in addition to a $2000 deductible for each occurrence, it has been draining my reserves pretty quickly and we just got into another property so things are tight for a little while.

Any advice is most welcome! How do I mitigate these risks and get it to operate smoothly!?

Damian:

Glad to have you on the site and to see another military investor in the Anchorage area. I am active duty AF stationed at JBER - we own/occupy a 4plex and are just about to buy a duplex in June sometime. Send me a PM and we can connect and talk game plan sometime!

Cody:

We just moved up here in June and we are house hacking a 4plex in NE Anchorage off of Muldoon. Currently have everything filled with tenants paying rents $300-$400 above the rest of my street because we updated all cosmetics. Moving into our next property sometime in Sept we expect this 4plex to cash-flow somewhere between $1200-$1500/mo.

You really have to buy right up here, which is the challenge. The majority of residential properties up here are way overpriced and undervalued with rents for it to cash-flow well unless you structure the deal appropriately. I pay utilities for my tenants minus electricity. Last few months gas has been ~$400, water ~$145, Internet ~$175 (I provide it as another measure of control and a way to justify a gross lease structure and charge more), Trash ~$155 every three months, lawn care/snow removal can cost ~$300/mo if you are going to outsource that, and electricity has been ~$115 for my unit and the common area I pay for. Once I move and hire a manager I expect cash flow to decrease to ~$800-$900/mo.

We survived the earthquake with no real damage. We are having a structural engineer come out next month to do an assessment to provide a written report just for peace of mind and to ease buyer's minds when we look to sell in 10-20 years. Rental market is very stable - and its not hard to set yourself apart from the other renters in the area if you put simple touches on your property to stand out (include a TV, pay for internet, electronic fireplace, etc.). All said and done, even with high utility payments listed above, I am still living for free for what I charge in rents, and will still be making an awesome profit once I move.