All Forum Posts by: Joel Florek

If you want to hustle and get into real estate work your *** of with a property management company. Learn the game, you can make great money and get your agent/brokers license. Take your first step with more income to house hack a multi family and keep adding. Getting a loan needs an income from a W2 if you want the easiest option for property 1. Then good investments can start to multiply. 2 years into my house hack of a multi I am at 23 units, quit my full time job and only work part time to supplement my rental income. Potentially picking up 8 more units in the next month and a half if all goes well and I could leave my part time gig completely. $50k to $70k is a great place to start as a young single person wanting to get going in real estate. 

Looking for some quick help. 

I have an 8 unit under verbal contract. We are going to have the seller carry a 2nd position loan behind the bank. Seller financing will be for 10% of our purchase price, bank will lend the other 80% and I will bring the rest to the deal. Have both the seller and the bank ready to go. 

Only issue is the realtor is unsure of how to write up the contract. This is actually deal #2 like this for me. Only issue is the purchase agreement put together on my first deal wasn't actually correct in the language it used to describe this purchase so I cant use it as reference. 

If you have experience or can point me in the right direction for getting the correct language to go into a purchase agreement it would be a huge help! 

Thanks BP nation! 

@Gino Barbaro maybe you have a minute to chime in and help on this. Your advice and help has always been appreciated! 

@Pete Edmonson NOI and cap rates. Figure out your gross rents, vacancy and expenses(excluding finance charges) for the NOI. Then determine what the fair market cap rates are in your area and you will get your valuation of the property. Then its deciding whether your willing to pay that cap rate and whether you and the seller want to deviate from it to make it more favorable for either party.

Good luck and reach out if you want to chat through the deal! 

@Sarah Young Never let the tenant be in charge of your projects. Its seems like the easy route is working with your tenants to keep them happy but if you give them an inch most of them try to take a mile. I have many situations where tenants ask for upgrades. Certain things I say no on. Disposals are one of them(which people have asked for). If its a deal breaker in your market for your type of tenant well then you have to do it. But it sounds like your tenants agreed to a price and your home with no disposal so I would guess future tenants will agree to your leases without a disposal. That is an item that will cause maintenance and increased risk due to failure and causing water damage. I have walked through too many properties where the disposals leaked and ended up destroying the kitchen cabinet. 

For other improvements to the property that I want to make, sometimes I will tell them its not in the budget/plan this year, but if they pay for "x" portion we can get it done by a certain date. If you want to do the work yourself then great, if not hire it out and make sure "x" covers that labor and ideally a good chunk of the material. 

Its not being mean. You do this as a business. As business owners you and we need to make money. But if our customers request certain amenities that are not offered we need to adjust our pricing to account for that request. If they are not willing to pay extra for it then clearly the amenity they are requesting is a "nice to have" and not a "need to have." 

Yes.... I know the stove is awful. Its clean, it works, and it will be replaced next time the unit turns. With that said, the renovation. 

For those of you looking to update on the cheep for a BIG impact and extra dollars each month in rent I figured I would post up this recent project. This is one of my two single bed units in my portfolio of 20 doors. Overall the cabinets are in great shape, just outdated as they go back to the 70s. The wall paper and floors are also horrible. The rest of the unit has been updated but the kitchen/dinning area was always an eye sore and a big let down for tenants when showing the unit. Prior to the renovation I was getting $550 for the unit. 

My goal was simple. Spend 3 days (about 6 to 7 hours a day) on this renovation project to refinish the cabinets walls around the cabinets, and new floors. Given this is my 3rd unit in the building to refinish cabinets I have learned some dos and don'ts with this particular type of cabinet. 

Donts

- No need to sand cabinets. The paper just gets gunked up quickly and doesn't help. (If you want to argue to sand after stripping then read my next point)

- No need to waste time stripping the old finish off. It takes forever and doest make a difference in my experience. I have also found the stripping vs not stripping doesn't make a measurable impact in helping the paint stay through wear and tear with tenants. 

- Didn't see a difference between using a de-greaser vs just scraping. Dont make your life harder if you don't need to.

-Dont waste your money on super expensive paint. Mid grade BEHR($16 gallon) and 123($12 a gallon I think) primer was good enough

Do's

- Get the 5 in 1 and scrape down all the excessive gunk off of the doors and cabinets. There are spots where the old stain is clearly not into the wood and just filled on the surface. The scraper does a great job of getting this and any grease/food that stuck on the cabinets. If you don't do this it will show through primer and many many coats of paint. 

Step 1 I pull all hardware off and scrape the cabinets and doors to get the gunk off. This seems to be just fine to get the finish I desired and saved a dozen hours compared to using stain stripper and doing a light sanding. The handles I wanted to replace but the hinges are mostly hidden and look just fine if kept. This saves me money to keep them and I can reuse all the existing holes making mounting everything back super fast. 

Step 2 was a coat of 123 primer over everything. I let this dry overnight even though they say its good after an hour. 

Step 3 is two coats of paint. I used the i300 BEHR paint from Home Depot. This seemed to be good enough to get a clean finish and cover all the dark designs in the old wallpaper. I did these in the same day. 

Step 4 is hardware back on. I found handles at Menard's that look the same as the ones that are $5 each except these were $2 in the contractor packs. I put all the hardware on the same day as the two coats of paint. Ended up being about an 8 hour day total to get two coats and hardware on with all the doors mounted back on the cabinets. 

Step 5 was flooring. I have gotten a bit of experience with this particular type of laminate flooring from Home Depot. See type below. Overall to cut my doorways with the multitool, pop off trim, install the floors and nail all my trim and transition strips back in 150 square feet takes me about 5 hours with this stuff(includes setup and teardown of all my tools). Its a few more hours compared to linoleum floors but I like the look of these way better and so do my tenants!  This is the standard stuff I am putting in all my units living areas(Bedrooms get carpet, bathrooms get linoleum, and in most of my units right around the cabinets gets linoleum. I am trying these floors next to the cabinets/sink on this unit to see how it holds up over time). Its $0.99 a square foot. Underlayment for $0.25 a square foot is what I use with this. I like this type of laminate flooring because #1 it looks great when I show the units. The other reason is this particular type has the beveled edges. This means that overtime nothing can get caught on an edge and break off a small piece of the top finish later. I have seen so many apartments put in new laminate floating floors like this without a beveled edge and with any water the corners start to go bad instantly! Time will tell how the beveled edge in my units lasts but I am confident at this point. 

TrafficMASTER: Hand scraped Saratoga Hickory 7 mm Thick x 7-2/3 in. Wide x 50-5/8 in. Length Laminate Flooring (24.17 sq. ft. / case)

Overall the expenses are as follows(yes, I have rounded these for simplicity). 

Flooring: $150

Door Handles: $55

Paint: $35(Only used about $15 worth)

Taxes: $15

The best part of this project is the extra $50 a month I am getting for the unit. The 20 hours of work and $235 investment gives me $600 a year in extra cashflow. Since this is a multi family property, at a very conservative 10 cap the value of my property goes up $6,000. Not too bad in my eyes! 

Check out the photos and ask any questions you have. 

Go cash as it is likely an easy close. Counter back to see what else you can get from them to get the few extra bucks. FHA can fall through because of so much red tape. Best to avoid red tape as much as possible especially if you are talking about 3% lower cashflow.

Steve Matthews multi family! PM me to chat more. But that is some cash that allows you to buy properties with an NOI of $250k. Cashflow right away or shorten your amortization to maximize your net worth and make a decision in the fire on where to deploy your worth.

@Mark Brechtl

Spray vs. roll. 

I am getting into my first house flip and the whole house will need to be painted. This includes, ceilings, walls, and trim. To keep things simple I was planning on using the same white for everything. In renovating apartments and other house flips painting can be such a bear getting in all the edges with a brush then rolling (over and over again). 

Would you recommend spraying and what tips do you have?

Do you have someone roll after you spray? 

Would you recommend renting one of the big sprayers from Sherwin Williams or is there a sprayer under $250 you would recommend that can be used for big and small jobs? 

Recommendations on lower budget paint that does a good enough job for showing?

Looking forward to your reply and thanks in advance! 

Work for me! (Started in November and trying to keep it going for all of 2017)

Currently have a portfolio of multi family properties in northern Michigan but moved to Indiana to start a family. Looking at some opportunities to invest in Fort Wayne and would love to meet some other players in the market to learn insights from and build a network. Please reach out with a comment or reach out PM me.