All Forum Posts by: Mark Young

I just got financing to do my rehab. I'm acting as my own general. I think we got a pretty good deal.

We put down 33% of the purchase price (cheap) and they require that we use other financing first, but they loaned us 50% of the after completed appraisal value.

$500 closing costs.
7.25%, interest only and only on funds as used, until project is complete. This is a variable 4/1 ARM based upon LIBOR. 1% early (within first 4 years) prepayment penalty.

Now, things have changed since we got approved for that fairly complex loan, but some things got better.

Try AdvantageBank (In Oh, and Ky and maybe elsewhere). If you're in N.Ky. ask for Mark Koenig.

M

Updating: It took until the end of November to arrange financing and close this deal. We began demo soon thereafter, but it dragged on. It's just now complete.

The bad news:
The Roof and two box gutters need to be totally re-done.
We've been shipping water in two places for years.
We need to repair a number of joists and about 16sq' of floor.
The second floor's floors are bouncy and need to be tightened up.

The good news:
We found historically appropriate metal roofing the we can use city money on.
We found metal roofing at a very good price through Modern Builders Supply.
Almost every (brick) wall is nicely plumb.
Almost all the floors are level.
The wood floors in the rooms we want to refinish are BEAUTIFUL and have never been refinished, as far as I can tell. They will require a few repairs, however.
The wife found 3.25" tapcons for $0.10 each, delivered.

More as we go forward...

M

theavocado,

Good job. Best to cut a loser short fast. It can really eat at you, as well as get uglier than you think. That's a risk you don't want to take.

I will offer this to those who think holding on is a good deal:

Right now, today, you can buy a closed end fund, symbol NRO. This is a fund that holds real estate investment trusts, and preferred stocks. It's diversified across real estate sectors and their holdings are 100% liquid (the REITs are publicly traded, too). The REIT's are trading at steeply discounted values. The net asset value of the fund is 7% higher than the current market price.

So, you can buy discounted assets at a 7% discount.

The kicker is that the fund yields ~14% and the dividend is payable monthly. Now, one can lose money in this one, to be sure, but compare that to the deal in question. There's an opportunity cost to any investment that isn't working.

I personally think that there are some huge values in real estate, in pockets, but everything has to compare favorably to the issue I just discussed. If not, well, I know where to put my money while I wait...

Mark

Hey, folks.

Got a tin roof problem. So far, all I can find is folks who want to tear off my tin roof and box gutters, or who seem to want a lot of money for perhaps not so much professional work.

I'm looking at it and researching it, and I'm starting to think that I can do the darned repairs myself with the help of my wife and my carpenter cousin.

Then again, I could be wrong. Here's what I'm looking at:

10-12 squares of roof, 2/3 gable, 1/3 shed. All needs to be "painted"/sealed.

Most of the gable roof is in great shape, the shed roof has one bad spot, perhaps 18 in wide and 24 inches long, near the gutter. That'll need to be cut out and replaced.

2 Chimney's Flashings need work.

One 15' box gutter (simple not ornamented) needs to be at least partially rebuilt and probably relined with terne (or something) since it's leaning a bit and dumping water out of the wrong end. I can see that this gutter has been coated and lined so many times that the narrow end isn't enough to handle the water.

A short gutter on the rear of the gable roof needs to be rebuilt but it's easy and safe to get to and work on. It's also only about 7 feet long.

The front 17' gutter needs to be coated or relined, possibly with rubber or some other coating. Otherwise, it's sound and working well. I figured I'd run the rubber up under the tin to avoid ice dams.

15' of rake needs to be replaced.

I'm contemplating renting scaffolding for a month and just going to town, perhaps doing some molding/rake repair and painting, as well as a bit of pointing up while I'm up there.

Anyway, am I nuts to be thinking this way?

Anybody ever do this sort of thing? Anybody have any tips or suggestions? Ideas about replacing tin?

Thanks,
Mark

Yanno, my stock portfolio never sat on the market for months and months when I wanted or needed to liquidate.

More importantly, never, EVER, has my portfolio called me to take care of it's backed up jon. :lol:

My maintenance of the portfolio is a moment or two a day, and perhaps an hour or so of research every quarter or so.

So, basically, stocks are a low maintenance, low leverage, low tax, low hassle, highly liquid alternative to high leverage, high hassle, illiquid real estate. You'd BETTER get a higher nominal return from it.

M

Yup. Looks good and makes me interested in your judgement.

Nicely done.

M

I'm definitely collecting estimates. I need to just for the bank. Interestingly, they are all over the map on some stuff and very consistent on other.

Thanks for your input. Puck, I know these things can run high, but I have to say that $150k for a reno in our area is significantly higher than even the worst I've heard from pro's.

M

I intend to spend 6 months getting it "livable". I expect to be working on it for another 6 months...actually, since it's 150 years old, I'll probably be working on it forever... :shock: :lol: Realistically, I figure we'll be finishing things out all winter and into spring.

So, let me rephrase what you're saying Minna: You say that you eyeball doing it for $30k, plus HVAC, Plumbing, and electric, and probably roofing assuming doing most of everything else yourself. Am I reading you right?

As for what I'm willing to take on myself, well part of the demo, much of the finish plumbing, though my plumber is pretty good and fast, so I'll give him as much room as he needs/wants. Since we're not really doing any major restructuring (a couple bathroom walls, and a closet, I think we can handle that and framing with some help. I'm not afraid to hang drywall, but I'm not so sure about taping. I was planning on refinishing the floors myself (they are the most beautiful heart pine, or maybe even hemlock), but I think I'll let pro's lay carpet. I'm comfortable doing trim, repairing and hanging windows, and I definitely want to have my hands all over my kitchen.

My wife is handy and relatively fearless and we work well together, so I've got that going for me. We've also got a number of friends who are in the "rehabbing business" and who are well respected. I've also got a cousin who is in the business too, with an architectural bent. As a side note, my BIL also has done some rehab and has folks who work for him that he can share with me. He can also source marble for me at cost (he imports it by the container load). Final resource, the next door neighbor works for a big name remodeling contractor and does carpentry on the side (and I instinctively like this guy).

So, bottom line, best case realistic scenario, maybe $70k? Add on 15% and pray nothing too bad turns up?

M

Actually, I was asking about you, given your rough estimate.

As for me, I'm not "skilled" but I'm "handy" and facile. I'm not dangerous with a hammer, saw, or drill. So, I can frame and do some installs, but I probably can't tape. I can probably finish out a bath, but I'm not going to do all the plumbing. I want to sleep at night, so I'll be bringing in an electrician. I've never tiled before, but I understand the principles and am game for it. I've lived in old homes for 20 years, so I've had to learn to deal with most of the problems (like fixing old double hung windows and the like). I figure we've got about 6 months or so and we "can" borrow enough to do a full retail rehab--I just don't want to.

Does that help?

M

AC, we're on the east side in the historic district. The only problem with this area is that there may be TOO many of these projects.

Minna, how much of a project like this would you do yourself and how much would you contract out?

Thanks,
M