All Forum Posts by: Aaron Carter

I thought I would post my progress. I had a REAL heating guy come out and take a look around. He recommended a central air furnace placed next to where the main gas line comes in, which would facilitate another meter to separate the gas bill between the two units. The central air would feed the lower unit which is two levels.

For the upper unit we can use the gas line that was already ran and put in a 80% efficiency gas wall furnace. Because of the open floor plan of the 900 square foot apartment he said that even though the efficiency is lower than a regular central air unit, around 93%, the cost savings over time would not be enough to justify the cost on installing another high efficiency unit.

He gave me a VERY reasonable quote, so I am looking forward to getting this off my to-do list.

Thanks Tom, that is good advice. It is tough to just sit back and wait sometimes especially when you know that time is money when investing...

I understand the concept of wholesaling properties but have no experience in doing so. There is also limited market where I live because it is so rural. Population of about 13,000. We have a lot of lakes and vacation homes. Many of these lake lots and vacation homes have been bought up by investment LLCs in the last couple years following the crash and are having a hard time selling them right now.

I used to be a real estate agent but let my license lapse because I was not planning on using it with my job as an RN. I could get it back but would have to re-test. However, my mom is a real estate broker so I have not felt the need.

Personal info:

I am 25 years old. I currently work full time as an RN, a stable job in my area (rural MN) with fairly substantial opportunity for salary growth. My wife is a dental assistant, also a stable job. We are expecting our first child this summer. She would like to quit her job in one year and become a stay at home mom which is something I support. We are currently renting a house which is being sold in two months. We have been looking for a home in the area but have decided to live with my in-laws for one year until my wife becomes a stay at home mom.

Financial info:

Living with my wife's parents will allow us to save a fairly substantial amount of capital, I expect around $40,000, conservative estimate, in one year from our earned income. We are quite frugal in our spending...

We currently own a duplex which we purchased for $86,000 last year. It was poorly managed and after repairs we are receiving $700 for one unit and $750 for the other unit after phase one of our remodel. However, I am currently covering utilities at this time. I have been saving capital and making improvements to the property this summer, which include adding two bedrooms and one bath to one of the units, after which I will also no longer be covering the cost of utilities for either unit. After improvements my conservative estimates are as follows:

(included 8.3% vacancy rate)

Gross Income: $20,350

NOI: $16,185

Cash flow: 11,870

Cash ROI: 43.88%

Estimated ARV: $125,000

We would qualify for a UDSA rural development loan for our future primary residence next year which would require no money down in addition to lower interest rates. Taking into account that our earned income will be significantly reduced when my wife quits...

One thing that should be noted is that if I purchase another investment property prior to purchasing our primary residence, I would likely not qualify for a USDA rural loan...

I look at the MLS every day for deals and would like the cash available if one comes up, either for our primary residence or an investment. At this time prices in my area are listed, in my opinion, much higher than market value (they also haven't been selling). I have not found any reasonable deals at all lately that would allow me to cash flow a property.

Questions:

Where would you recommend that I place the money while we are saving? High interest savings accounts? Other options?

Should I take advantage of the no money down loan and use all our capital for investment?

How much leverage would you recommend for either my primary residence or buy and hold properties?

Should I use our duplex as collateral?

Since I am new to Real Estate investing, and finance in general, would it be more beneficial for me to find a partner and form an LLC, which would allow me to diversify my risk further? Do I look in other areas for properties?

I have big dreams and am willing to make sacrifices now for returns later...

Any other input about variables I may not be considering would be greatly appreciated!

Thank you!

Thanks Bill, I agree with you that I need to find someone who knows` what they are doing. I have had a couple come in and have not been impressed with their knowledge base. I live in a rural area about 13000 people and there are only a few heating companies but I will make a few more phone calls. Thanks.

The electric baseboard heat was around $900 for the whole building when I purchased it. I put in new windows, insulation and numerous other things which dropped me down to around $750 per month for the whole building this last winter where we had a high temp of 20 below zero for about 2 months. I am currently covering the cost of heat and increased the overall rent per month because I am afraid that in the wintertime my tenants will not plan on a electric bill for $375 per month and will then not pay their rent.

A ductless mini-split heat pump will not work here because they are only efficient at around 5 degrees above zero and use the same system as an electric baseboard heater when the temp outside is so low, so it will not save me any money.

Once I can get the cost of heat under control with natural gas I will lower the monthly rent and make the tenants responsible for all utilities. My duplex is close to the local college and with the demographics in my town this is the target market. So keep in mind that I am most likely working with college students.

there are old radiators there. Are you saying to cut the loop from the down stairs and close it to isolate it to the upstairs unit? Would a domestic ng water heater be sufficient to heat that small of an area? Standard hydronic boilers would be too big.

I own a duplex which currently has electric baseboard heat that was installed by the previous owner. It is an older house and electric heat is really high (no off peak as it is the only source). I live in northern Minnesota... regularly 20-30 below zero.

The house used to be heated with a natural gas hydronic boiler, the former owner was an electrician and I am thinking the boiler malfunctioned and instead of replacing it he installed electric baseboard heat instead.

The pipes for the radiant heat are not hooked up in some areas. I had a plumber look at it and he recommended not to hook up the radiant heat again due to cost of fixing what is there.

both of my units are two bed two bath. I am adding two more bedrooms and one bath in the basement which will be connected to the unit on the main floor. I am planning on putting in duct work for a natural gas unit to heat the main floor and the new basement remodel (which will all be one apartment).

My question is what should I do with the upstairs apartment? I cannot feed the duct work to the upstairs apartment because I have no way to split the utility bill between the two units even if it were zoned. I had a natural gas line fed up to the upstairs unit because I was initially going to put in a wall furnace in to act as a large space heater. The unit is approximately 800 square ft with an open floor plan so I think that a central unit would work fine. However, the wall furnaces that I have been looking at are only rated at around 75% efficient compared to the regular central air units that are around 95.5% efficient.

Any suggestions on heating a 800 square ft apartment without duct work using natural gas efficiently? Maybe a mobile home furnace?

Hi there, I am a new real estate investor with a vary broad background. I am 25 years old, married, with our first child on the way. I work full time as a registered nurse. However, as much as I enjoy my job, I have a very ambitious entrepreneurial spirit. This in addition to my strong belief of living within one's means, I hope will propel me to financial freedom.

I have held a real estate license since I was 18 years old, however, I let my license lapse last year because of the tremendous amount of competition in my area and beginning my career as an RN. My mom is a real estate broker, so I am still able to do the leg work and represent myself in transactions.

I have also been a personal trainer for five years as well as managing numerous health clubs in Minnesota. I am one of the most motivated and ambitious people you will ever meet. I strive for excellence in everything I do.

I bought my first piece of raw land when I was 10 years old, one acre on contract for deed, no money down, that I paid for with my paper route; $50 per month out of the $110 that I earned (the owner was very empathetic to my situation). Oh if I only knew then what I know now. Needless to say, it was not the smartest investment as there is little to no income potential.

I bought my first investment property last spring immediately after graduating from college. We purchased a duplex close to the local university that needed a complete remodel. Each unit approximately 850 square feet two bed one bath. I was able to completely the remodel the building with my father-in-law for around $6,000 following graduation and before starting my first job as an RN. Currently have had both units filled since last fall and cash flow well. There is an opportunity to add two more bedrooms to one of the units once I have the capital. As is with most new investors, I have more time than money and will be doing all of the labor myself.

Currently the process of purchasing our first home contingent on financing through USDA rural development.

I am looking forward to learning from this community!