All Forum Posts by: Justin Loveland

My insurance companies also inspect my properties and tell me I need to remove trees, fix gutters, they called out a roof for having lichen on it, hand railing in the middle of an open walkway that we needed to install (nothing there before). We do everything they ask us to because it ends up reducing your liability. We end up going over budget on house flips as well, so now I add $20k to whatever I think it's going to cost and at times that's still too low. You need to have good margins otherwise it's not worth investing in the deal. 

 I see this in my town all the time. Pay $1.5 million, tear it down, spend $3 million to build a brand new monster. The pricing on multi families around our area are being priced for owner occupied landlords now. 

 The local rules and regulations for building in our area is what is keeping the volume of building low. Towns are not wanting Density or Sprawl. Good for values, not good for housing availability. 

As far as the rentals, we've rented everything out again with quality tenants. I'm just really happy to see young people making smart decisions. 

 Had 3 different tenants in 3 different units purchase homes this year. They're buying in up and coming areas, very smart. The amount of homes we need to keep up with normal demand on the construction end is staggering. We need 2.2 million homes built and we're on pace for 1.2-1.3 million this year across the country. This doesn't include the 14 years we've underbuilt for normal demand. On the rental end where we live, there's more people needing rental housing than housing available and I just saw that with 7 applications on 1 unit. We can't build as much in the northeast, so as long as there's demand on a Micro scale in the northeast values will hold and young people should be purchasing a long term fixed payment asset. 

Personally I thought about this whole thing differently. I have a fulltime job and so does my wife. We would like to retire early. I looked at the cash we put down on properties and the return on that cash as the determining factor when buying whatever the property was. If the net return on the rental income came in higher than 8% of the cash I put into the deal I would buy it. For us this is something we'd like to give to my kids one day. I can tell you we spent all of last years earnings rehabbing properties this year, so if you're trying to replace your income make sure you're making a significant amount more than what your actual income is to offset unexpected expenses like a flood, or vacancies for extended periods of time. This is a great way to supplement your retirement income from 401k, pensions, etc. 

The only Flip I've ever done was supposed to be a Long-Term SFR rental. We got into the thing and ended up gutting it. About $80k later we had a nice house. We found books from the early 1900's. We did pretty well on that one, but I wish I still had it because rents kept going higher where it would have brought in a good return long term.

I wouldn't think so. If a studio is getting $1,500 per month and the room you're renting is $800 per month you're helping someone out by saving them $$. If the rental market comes down which it rarely does the room you're renting is still a value. On the flip side of that, someone else is lowering your cost of housing, it's a mutually beneficial situation.  

 What is Limited Land to Hold Value?

Michael, not sure if you bought this property at $832k but I live down the street. You could get $4,500 per week for this property for 10 weeks. The value on the Nubble is very stabile, no issue on appreciation over the years. The winter rental is tough, but at $2,200 per month for 8 months you'll find some people to rent it. We rent our own house over the summer for the 8 weeks the kids are out of school and live in a small cottage in wells for 2 months. My wife's family used to rent their properties in OGT for 3 decades and recently sold them. If you need any help with property management I can send you some management companies local to York.  

So the plan is to sell 2 properties

1 is the one we gutted and are rehabbing. It’s a condo with short term rental income. 

1 is the cottage we move into when we rent the house we live in for 2 months over the summer when the kids are out of school. 

This will bring cash reserves to over $200k which is more than we typically keep. 

The past 3 months were a very humbling experience and thankfully we had the ability to solve the problems without borrowing funds. I couldn’t imagine owning 30 or 40 properties. That exposure would be crazy.