All Forum Posts by: Joseph R. Smith

I'm refinishing the hardwood floors myself on a large duplex built in 1865. It's 9 rooms totaling 1400 sf need redone. It's a 2 week project for 1 person. My take is: 1) Especially with these older houses, the ARV to be gained is in restoring them to they're original beauty. Also, I always take the original baseboards and wood work ALL the way down, even if it means threw 20 layers and 100 years of paint. 2) There are a couple sites on fb to the names of "our old house" with hundreds of thousands of members who would all cringe at the idea of doing otherwise with the floors. Please, please do not use these cheap modern laminate materials or substitutes. In the properties I'm currently working on they were used over the hardwood floors in the bathrooms. I know those materials will be worthless in 2 years once water hits them. Use two coats of stain, 3 coats of ploy so that tenants cannot redamage them very easily. Painstakingly do them properly, no shortcuts. 3) The last house I hired the job out for about $2000. They did a horrendous job. I realize on this house I'd probably be looking at least $6000 for professionals to do properly. I have since my last couple properties fired all rehab help and taken it all upon myself. My cost on this job is $800. I'm not sure how rich some people are here, but an extra $5000 for two weeks of my time I thought was a lot of money to the average person. I purchased this property for $20,000. My budget for rehab is $14,000, the ARV is $275,000. Timeframe 2 months. Sure after a few more of those or over $1m/yr and I'd reconsider my expense budget to hire out again. There is no shame in doing it yourself. The contractors tips are spot on to redo the floors. I realize Im sharing a contrary opinion to most of the comments here. Most people tend to think I'm a little lost.

https://www.housingwire.com/ar...

I owned a coin operated laundromat in Ohio for several years. I think in any business, it's simply a matter of checking local competitors prices. In a college area, I'm sure there are several. Some will vary depending on age of machines and ect. Simply charge a quarter less or the same price since tenants will have the convince of not having to go out. A couple coin operated machines can be very lucrative for any landlord. In an eight unit building, it equates to about the same as an additional units rent. Know that laundromat s run on about 25 percent of gross sales in utility expenses. 

I started with mobile homes in Ohio and Indiana, when I was a teen. My first real estate mentor owned 80 of them, and taught me a lot. 

1) Yes the ROI is ridiculous. You are correct. In the rural Midwest, One can buy a mobile home for $2000 or less, and rent it out for $400 month easy
(not including lot rent of $300). Plus that, repairs can run less than another $1000, for an ARV of $10-$20,000 easy. In fact, IF you have the land, many that must be moved for a cost of $2,000 or so, are given away free.

2) Here is the greatest risk my mentor taught me: Its a tremendous one: He owned the land. IF you do not own the land, a landlord may seek out to evict you threw unscrupulous methods. Put yourself in his shoes: He is likely to have every motivation to do such. Could just make up that he received repeated complaints about loud music or whatever from lot # 42 and 44, while your on lot #43, even to police (which mobile home park owners are usually well in kahotz with).  Thats the worst case. Especially if he knows that you do not have the funds to move your property to your own property, the funds to have your own land, or are not in that primary business. The same lesser scenario is that mobile home park owners are typically always in the process of updating the homes on their land. In other words, they look to regularly replace that 1960 10x50 with a 1990 14x70. (Thats why many are given away free "must be moved"). Point is, if you are in rehab, then you are likely buying the older ones the park owner would prefer to move out and replace. Park owner has authority to change park rules on say subletting, at a moments notice.  And know they will scrutinize every decision you make, tenant selection per se-all will have greater scrutiny. Such risk is so great I followed his advice and quickly moved onto single family homes. 

3) A) Some other downsides: There is an inverse relationship between ROI and tenant turnover, vacancy rates, eviction rates, ect. You'd be surprised how many beginners engage in illegal civil issues with tenants.

B) upkeep can be a real pain with these. I've done it: frozen pipes in particularly. Especially in a place like Maine. Crawling under trailers in pools of spiders and creepy crawlers and stuff. Days I dont miss. And parts are not typically very standardized. Because each manufacturer used a different material over different time periods.  

C) Setting up a park on vacant land carries huge fixed costs. If you figure, $2000 moving each one in, $2000 for the slab, $2000 utility hook ups for each lot, ect. Its $100,000 easy to develop vacant land into a 10 unit park. Of course some economies of scale come in , the larger the park. 

D)  Some of the development can require supurb working relationships with the city. (Will the streets in the park be city streets or your own property to maintain: As in snow plowing, as in garbage removal, as in separate utilities or not, etc.). 
Now here's where another greater risk comes in: The city often will not appreciate the tenants of the park: As in constant police intervention called among tenants they learn to know by name, etc. So cities often have incentives to shut the park down, or at least make new zoning rules etc. Another risk to be aware of. 

E) Like vehicles, mobiles depreciate (at a rate of about 1.5% per year to be exact), rather than appreciate like homes. Of course that doesn't matter if you are in the business of rehabbing them. Lending rates for them are much higher than homes (again comparable to rates on vehicle loans). 

But you are absolutely correct, if all the above is handle able. It takes a special C and D property class landlord. Yes, mobile homes including lot rent rent for about the same as a single family home. 

   

I started with mobile homes in Ohio and Indiana, when I was a teen. My first real estate mentor owned 80 of them, and taught me a lot. 

1) Yes the ROI is ridiculous. You are correct. In the rural midwest, One can buy a mobile home for $2000 or less, and rent it out for $400 month easy
(not including lot rent of $300). Plus that, repairs can run less than another $1000, for an ARV of $10-$20,000 easy. In fact, IF you have the land, many that must be moved for a cost of $2,000 or so, are given away free.

2) Here is the greatest risk my mentor taught me: Its a tremendous one: He owned the land. IF you do not own the land, a landlord may seek out to evict you threw unscrupulous methods. Put yourself in his shoes: He is likely to have every motivation to do such. Could just make up that he received repeated complaints about loud music or whatever from lot # 42 and 44, while your on lot #43, even to police (which mobile home park owners are usually well in kahotz with).  Thats the worst case. Especially if he knows that you do not have the funds to move your property to your own property, the funds to have your own land, or are not in that primary business. The same lesser scenario is that mobile home park owners are typically always in the process of updating the homes on their land. In other words, they look to regularly replace that 1960 10x50 with a 1990 14x70. (Thats why many are given away free "must be moved"). Point is, if you are in rehab, then you are likely buying the older ones the park owner would prefer to move out and replace. Park owner has authority to change park rules on say subletting, at a moments notice. Such risk is so great I followed his advice and quickly moved onto single family homes. 

3) A) Some other downsides: There is an inverse relationship between ROI and tenant turnover, vacancy rates, eviction rates, ect. You'd be suprised how many beginners engage in illegal civil issues with tenants.

B) upkeep can be a real pain with these. I've done it: frozen pipes in particularily. Especially in a place like Maine. Crawling under trailers in pools of spidars and creepy crawlers and stuff. Days I dont miss. And parts are not typically very standardized. Because each manufacturer used a different material over different time periods.  

C) Setting up a park on vacent land carries huge fixed costs. If you figure, $2000 moving each one in, $2000 for the slab, $2000 utility hook ups for each lot, ect. Its $100,000 easy to develop vacant land into a 10 unit park. Of course some economies of scale come in , the larger the park. 

D)  Some of the development can require supurb working relationships with the city. (Will the streets in the park be city streets or your own property to maintain: As in snow plowing, as in garbage removal, as in seperate utilities or not, etc.). 
Now here's where another greater risk comes in: The city often will not appreciate the tenants of the park: As in constant police intervention called among tenants they learn to know by name, etc. So cities often have incentives to shut the park down, or at least make new zoning rules etc. Another risk to be aware of. 

But you are absolutely correct, if all the above is handleable. It takes a special C and D property class landlord. 

       

Keep it simple. Sticky window paper. $10 fix: 

Hands down, the 1/2 bath is more valuable to renters. And more valuable to the investor, hands down. The half bath adds to property value, and adds to the market rent in either the 3bdrm or 2 bdrm case.  Moreover, I would NEVER convert an existing additional bdrm into a more open floor plan. I just did the opposite on a property. Converting an open floor plan into an additional bdrm. A single wall costing a few hundred dollars to put in increases the value of, just say a $100K 2 bdrm property by 15K making it 3 bdrm, and commands an additional 20% or $300 per month in rental income. I believe the rule of thumb is 15% value added by a 3rd bdrm vs. 2. I do not know the % increase in value of having the 2nd 1/2 bath offhand. Less bdrms or bathrooms will also decrease your market for tenants. Many tenants who could get by with a 3 bdrm 1.5 bath, could simply never even look at a 2 bdrm 1 bath. 

1) It is a very important distinction to determine if he is a sex offender in the aweful most often thought of sense, OR did he per se get caught making out with his gf in the back seat of a car parked behind a bar in public. MANY so-called sex offense crimes are only of this 2nd nature. Do find that out threw legal researching methods. 2) In managing mobile homes, I am very strict on few things. But IF god forbid his crime was of the first nature, mobile home parks house many children and families thus can be prone to predators that we MUST screen out. :/  

The law of diminishing returns does not apply to education until a very extreme threshold. We can agree that in most fields, including yours of sosc or pysch, a 4 year degree is increasingly insignificant, whereas a 6 year is often required. Or that In my field of finance and economics, the average starting salary after 4 years of business school is $41K and $48K respectively, whereas the average starting salary with a 6 year MBA (only 2 more years of college) is 85K. I proceed to go on into several very 'narrow and deep' areas of finance in post graduate study. 1 of those I shall not name here carries with it an average starting salary of $290K. At meetings I hear those attending just for continuing education credits state that at age 45 or 55 that they are "sick and tired of more school.". Series this, series that-I cannot keep them all straight. But as for business school, the law of diminishing returns does not kick in until one has the delegation skills to partner with other individuals or separate post graduate designations or highly specific regulatory or otherwise certifications. I feel it is the same in sosc or psych. I talk to Drs for general things. Most affluent people do. But I would never let an LSW counsel me. I insist they have a Ph.D. And they have multiple multiple degrees from several highest tier colleges in the country. They may have went to school 15 years, but I know of no one in school 15 years who does not earn 7 figures.

I rent in C areas. I provide appliances including washer and dryer in single families. But 1) They are $100-200 appliances which I find used. 2) The gent that said repairs are the major issue is absolutely correct.  I specifically state that, "The property is rented without appliances. Any appliances are provided as a convenience , but landlord is not responsible for repairs to appliances. Nor are appliances ever to be removed from the property. They are property of the Landlord. "   In multiunits, buy a coin operated washer and dryer for around $900, and keep it well maintained . It will easily bring in an additional $200 per month.