All Forum Posts by: Lesley Resnick

Tree Trimming. 

1 dead 

2 Trim 

$1500

It has made a huge difference in the curb appeal.  I work with a local guy and his prices are great and he will haul away the wood as well.  Tree people are a unique set.  Contractors talk about the tree people as characters! 

I watched a 51-year-old tree climber swing from one branch to the other.  It was like a circus trapeze act.  He is remarkable.  They did not bring the bucket truck to lift off limbs.  So they used their SUV and rope to "encourage" a branch to land in the designated spot as he cut it.  I had to walk away, I could not watch.  They swung from the trees with a 36-inch chain saw, use their SUV to pull branches and no one was hurt including the house.

QUICK TIP:  Ask for their insurance and actually call their broker to make sure it is still active.  Some of these guys get insurance and then let it lapse.  My guy was solid on the insurance.  

Waiting on the plumber and electrician.  I can not move forward until this gets resolved.

My contractor has outlined a 4-week plan to complete the house.  More and more, I am thinking I will sell this off.  The numbers have not come out where I wanted for rent.  I want to own in this neighborhood, but the numbers are taking me in another direction.  I will continue to document the process and publish my numbers. 

I may need to change the title of my post to FLIP #1 2019!  LOL

I picked up 2 more houses this week in the same general area as BRRRR#1. I am starting to run low on cash and will need to sell off this house to fund my other 3 renovations.

I am not sure why people think multi-family is intrinsically better or worse.  It is just numbers.  Each asset class has a profile and advantages and disadvantages. Both asset classes are available as active or passive.

In general smaller (SFH 1-4 units, Conventional) are more profitable, they lack the common fees, trash, lawn, utilities for common lights. The tenants are generally more stable. People will stay in a sfh with a yard and a driveway longer than a second floor walk up.

Multifamily offers scale.  It would be difficult to buy 100 sfh at a time.  Maintenance also benefits from being in one single location.  

For me personally, it is unlikely I will move into large scale multifamily. I like the control, profitability, and liquidity that SFH offers. I can sell off all my properties tomorrow if I need to. I can sell to owner-occupied or other investors. Multi-family has a limited market.

I do not have institutional money (that is generally who owns large scale multifamily) and I am not sure I would be better off if I did.  

We may slow a bit, but there is no catastrophic event on the horizon.  No one ever knows what is going to happen and if they tell you they know, they are selling you something.  it is hard enough to look around and know what is happening right now.  If you look back to before the election, all the news outlets were predicting a recession.  It is still coming?

Granted, if we get into a full-scale trade war with China, go to war with Mexico, leave the government closed for the next 6 months, then all bets are off.    

 Hoping for a recession so you can save a few bucks on a property is short-sighted.  There is an assumption that all will remain the same except the price of the property you want to buy will just drop.  This is not a zero-sum game.  For you to get a deal at 75% off someone needs to lose and lose badly.  The first thing to go in a crisis is liquidity.  If you have Scrudge Mc Duck piles of cash and do not need to depend on your business or job to pay your bills or credit to make deals...  If you need your tenants to pay rent to cover the mortgage, then you could be the one selling off the property at 75% off.

My point is, follow solid practices and buy good deals.  Use leverage as a tool, not a crutch.  A reputation and experience are going to be important when and if the next crisis comes.  Real estate does not happen in a vacuum.  

I am a net buyer (i buy more than I sell) and will be for the foreseeable future.  

First off you are my online web site hero!  Your site is amazing, do you do it yourself or have someone else manage it? I have looked at a lot and yours is spot on.  Clean and informative. 

I am still working on my numbers.  I will continue to update them

I am shooting for an ARV of 170-185. There are a ton of other flips that are hitting the market and should help my comp.

Working backward - I like to take a conservative approach to numbers.

170*.7 = 119,000

170*.75 = 127,500

I have 76k in the property and need a reno of 43-51k. I am going to need the (75%) 127,500 or an ARV above 170k to make this come out even. 

Rent in the 1200-1300 range. 126k @7.5 30 year = 881 P&I + ins 80 + tax 70 + 120 management = I am going to be even in cash flow.  I need to tighten up my numbers.  I may be better off flipping it.

If I keep it.

I will realize 44k in equity

10k in tax deduction from repairs, de minimis and bonus depreciation

tax deduction closing costs for the loan 

Ongoing depreciation = 5,500 a year (150k basis / 27.5 years)

The cost to me: around zero

Clearly, this is not going to be as profitable as the first, but It will provide a tax deduction of 20k.  This property will eventually appreciate as the rest of the neighborhood continues to improve. 

If I flip it I should be able to get between 170-185.  It is just going to depend on what else is on the market at the same time.

If I got 170 and had 126 in and 10% in closing extra repairs etc ( this is a high number)

170k  sell 

17k closing etc

153 net sale

126 in costs property and reno 

27k Profit

 If I could get close to the 185, then it would be an easy choice.

I need to work on this more to decide which way is better. 

 The house is old, but not in a historic district, so it is not subject to any additional regulations.

The electric will need further evaluation.  Some of it is new and some old.  Most likely just some repairs.

The demolition derby continues.  They picked up the dumpster but did not replace it.  Work should continue tomorrow.

It may be hard to visualize, but here goes...

There is going to be a doorway to the kitchen from the closet.  The door you see will be gone and the laundry room door will be the only outside door.  You are looking at what will become the hallway.  The rest of the space will become a bedroom.

This is the same room as above.  It is going to become a bedroom and the 1/2 bath will be full.

Expanding the kitchen and dining area

The fireplace was leaking the insulation was nasty.

Check that out!  Anyone know what that is?

Old school TV antenna in the attic!  

Let the demolition derby begin!

The restoration hardware chandelier is amazing!

Sadly, the picture makes the chandelier look much nicer than it is.  It is builder grade from the 70s and will not survive the renovation.  If it were original to the house, I would do something with it.  

New Roof 

Better pic of the garage.  I called the city to inquire if I could make a garage apartment and they told me, NO!

Living room.  Great wood floors going to have them refinished.

Chandelier is something 

This house is old (1939). Look at the slats.  This house is plaster as opposed to drywall used in modern construction.

The carpenter would nail the slats to the studs and then apply plaster.    

It is very difficult to make large repairs like this hole.  The ceiling is coming down and going to be replaced with drywall. 

Kitchen -- No explanation required 

Full bath to become master on-suite 

Half bath to be converted to full bath.  A number of walls will be relocated.  It is hard to visualize unless you are in the space.

I will try to address it in another post.  It is going to add the most value to the house.

This is an odd room.  I think it was meant to be a playroom.  I am going to take space from here to create the full bath.