All Forum Posts by: Kevin Enderle

 I am glad to help. Not everything goes right on a project. Things go bad. But rarely do they go this bad. Hopefully people can learn from my mistakes and make the process much smoother. 

 I'll be happy to do so. 

So, bought a 3br/2bath home in the smoking hot Bellingham WA market. Heavily mold and water damaged, just the way I like them. The deal was too good to pass up. The numbers are awesome. Abandoned by overseas rich parents after Jr. Graduated from College and generally when the electricity is turned off in December, bad things happen to your plumbing. 6 months later, it was cooking nicely. 

The First stages went brilliantly. Gutted in 2 days, electrical and complete replumb in 2 weeks punctuated by lots of typical city permit requirements, insulated in a day. Things were looking great! 

Then came THE DRYWALLERS.  

Drywaller #1...and yes this requires a numerical list. Shows up, very professional, gives me copies of license and bond, fair estimate, drywall is on site already since I have a wholesale account at the local Drywall and Insulation supplier. I rent a drywall lift because lifting 4 x 12 5/8" rock for ceilings isn't easy. The Contract is signed on a Thursday and a deposit check is cut. Drywaller is supposed to be there on Sat to start and promises finish by Tuesday.

Sat eve rolls around and I drive to the project anticipating seeing walls and not bare framing to find...nothing. No work done. That is when the excuses start..."oh I had to help my parents move, be there on Sunday". Sunday rolls around and They are there but it QUICKLY becomes apparent these guys are clueless. Drywall is hung wrong, light can holes mis-cut, no Zip tool, bad seams. After pointing these things out, they assure me it will be fixed and will be done on time. Monday rolls around and I return to find...nobody. Once again the excuses. Wed rolls around and one closet gets done. This time, the contractor is whining about there being nobody to help him and having to do it himself. My patience is razor thin by this time. I tell him Friday is the deadline and if it isn't done in time that he'd be in breech of contract. Friday rolls around...not only is it not done but the materials are gone...as is the drywall lift AND the Rotozip my electrician lent them so they could do the job. Turns out they are NOT licensed and Bonded. Yeah, a small claims suit is being filed. 

Drywaller #2 comes recommended by a fellow contractor. "Yes, we have a large 5000 sq foot house we are doing in Seattle but we can squeeze you in. Turns out they shouldn't have been drywalling a 50 sq foot OUTHOUSE. I show up to find the wrong ceiling drywall hung, and the 5/8" drywall screwed in...at the EDGES ONLY. You have any idea how heavy a sheet of 5/8" drywall is? Guy has a dude in there doing corner bead...the WRONG corner bead...and not only has the dude never done corner bead, he's never even done drywall. Yeah. 

Drywaller #3. This is one of my own crews. They tell me, "hey, we can hang, mud, tape...let us take care of it for you". I know these guys, I am relieved. Yeah. That lasted a few hours. No Really, seams are supposed to be on the STUDS. NEXT. 

Drywaller #4. By this time between the first three, I admit I was desperate. None of the guys my drywall supplier recommended are available. Between the first three, they managed to actually get drywall up...badly. So I post a wanted ad on a local Facebook buy/sell/services forum. Drywaller #4 is a finish guy. 20 years experience sayeth he, immediately spots all the problems...ALL of them. Says he can fix them in about 4-5 days. Has all the tools... Sweet Relief! I go and pick out paint.  

THREE WEEKS LATER, After discovering the guy was homeless and, unbeknownst to me, was living in his truck and then subsequently squatting in a bedroom, hiding his sh!t carefully so it wouldn't be seen...at first. Dude is aiming for a freaking level 5 smooth finish and what I want is a level 3 rental finish at this point and please use that texture machine that is been sitting there rented in the garage for three weeks now. Add in a broken down truck in my driveway, people called in to "help" at ridiculous rates I won't agree to. Add in a dash of his buddies using the property to store a whole mess of crap they picked up off the side of the road...yeah, I officially HATE drywallers. By the end I'm buying the guy food so he can friggin' finish so I can get a drywall inspection by the city and even then, given a FIRM deadline, he doesn't. 

Screw it...I  finished it myself. I don't do drywall. It is a dark art which apparently draws in a lot of flakes and criminals. Note, it is not like I don't know this which is why I only refer my customers to one of two local highly established rock guys. Frankly I was better than the first three and I SUCK at drywall.  And what would have taken the other guy 5 days to do, I did in two. Amazing what happens when you don't spend all your time bitching about the drama in your life...and by this time I honestly deserved to so some of that bitching, but I put in the hours and got it done. And YouTube can do wonders to make things at least passable. 

Mind you, this was 700 square ft of drywall. A bathroom, hallway, single bedroom and some patches upstairs. We aren't talking 4000 square ft. 

Keep in mind that I own a MOLD REMEDIATION COMPANY. I take out a LOT of drywall and refer a ton of replacements out. Needless to say, none of the above will be getting recommendation. One is being sued, the second one apparently decided against doing that 5000 square foot house and went back to building cabinets...FRIGGIN CABINETS. Drywall is NOT wood. My crew...nuf said. Fourth guy...shudder. 

Lessons learned. 

First, go with the drywallers you know. Ask the local drywall supplier if you don't know somebody. The guys I normally use and recommend were booked up. I should have waited for them. Even if it took another month I would have been ahead and much further away from requiring a coronary surgeon. 

Second, check with the State. I fully admit to being guilty of having blinders on and I should have checked the license on the first guy. 

Third, don't get finishitis. Hello, my name is Kevin and I have Finishitis. See, I have the place leased already...at a really REALLY nice rate. And thank GOD there is such a lack of housing...especially PET FRIENDLY housing, which this was designed to be...that the Tenants have been patient. The house is very VERY well located and the vacancy rate for pet friendly housing in this area is about 0.1 percent. No, there isn't a mistake on the decimal point. So I wanted it finished. Done, renters moved in. And because of that, I made poor decisions as to the drywall contractors I chose. Very poor. Epic Bad. If anybody is a hollywood producer, I have a comedy/tragedy script just ready to go. 

In the past 5 weeks I've gone from happy to annoyed, to miffed, to upset, to angry, to litigious, to threatening to crying myself to sleep at night, to giggling uncontrollably at times and now to full numb. Did I mention I HATE drywallers? Except the good ones...treat them as a resource more precious than gold and pay them whatever they want and smile. 

Oh...and house interior should be done next few days. Does anybody know a good exterior painter in the Bellingham WA area?

I have a large mobile drying furnace system that I can make available at a very fair rate. Combined with dehus,  this is a fast way to dry a structure. 

Gas is a lot cheaper for your tenant to run. That means they are more likely to be able to afford to pay the rent. Yes, a bit more Cap-X up front, but brings higher value and more rental upside as you can advertise Gas furnace to save money during the winter. Upgrading the Attic insulation is also a relatively cheap thing to do that can pay big dividends by lowering tenant costs so you can recoup it in marginal rent.  I just put in Gas and upped the attic to R-60.  

I own a Mold Remediation company so dealing with Mold is something we do every day. Trust me, on this one, my crew was fully outfitted, neg Air, Scrubbers...the works! 

Just closed on my first full deal. I have another rental prop on my own land (I unknowingly house hacked  by turning a second building on my property into a rental which generates $950/month CF). I have done a flip with a partner before as a mold mitigation contractor, but this is my first full blown rental property. 

Single Family home in Bellingham, WA. I was called in by a RE agent to give an estimate to do an interior gut. 3 br. 2 ba. 2 story, 1620 sq ft, late 70s build. Severely water damaged and moldy. The second I stepped out of it I called my father. We'd been looking for a while for a house to flip together. I said we needed to jump on it right away. I found the house, he'd provide the financing, I'd provide the mitigation work and we'd sell and split the profits. We made an all cash offer on it and they accepted. Paid $240K. ARV is $370K and there is zero inventory in a desirable neighborhood. Bellingham's housing market is SMOKING STEAMING INCANDESCENT ABOUT TO ACHIEVE NUCLEAR FUSION HOT with housing prices jumping 11%...LAST MONTH.

We closed in 2.5 weeks and the mitigation work was started. It was so bad inside after cooking for 9 months that 10 seconds inside without a respirator and you'd come out gagging. 

2 weeks later after stumbling across BP, reading and listening to Podcasts, I decided it would make a killer investment property. Vacancy rate in this area is currently 0.64% and no, there isn't a missing digit. My father seemed to have the same idea as he called and offered to sell it to me at zero down, Interest only for 3 years at 3%.  No way I could turn that kind of gift down! I closed last Thursday. 

I'll have about $20K into the repairs when all is said and done, leaving me with a conservative $100K in equity. Researching the rental market,  I determined the best way to max out rents was to make it a Pet Friendly rental since I'm a major dog lover and that market is woefully underserved. It has a fenced back yard and I installed pet friendly flooring/etc. Local prop management co estimated it would rent for $1500/mo. I rented it to 3 Aerospace engineers and 2 dogs for $2200/mo. Big Pet Deposit. Big. 

My question for the experienced is this...

I'd like to BRRRR this but I'm 52, so the idea of holding a mortgage for 30 years isn't very appealing as I'd like to use the rental income as my retirement in 15-20 years. If I do a 15 year refi, it won't positive cash flow. So would it be better to put a 30 year refi in and plan on selling for the equity in 20 years or would it be better to stick a 15 year on it and wait for the rent to catch up to the mortgage in about 3-5 years to go neutral and cover expenses? I can afford to cover the $160/mo in Neg CF as an investment though the idea isn't very appealing. Even though I have budgeted for a reserve, as all new systems (plumbing/heating/electrical/insulation/) have gone into the place, the only thing I know I'll need to put funds aside for is a new roof in about 10 years. I plan to manage myself for the time being as I've only got two rentals at this point. Adding another 10% management fee on will make the neg too high for my tastes at this point. So is a 30 year and just wait for rents to rise over the years to give me the cash flow I want for retirement a good idea...or is a fast pay down and cover the negative for a substantial rental income in the future a better idea?

Also, how long of a history do banks typically want to show a rental record before you can do a refi on a first investment property?

I've definitely got the bug and want to start building a rental property portfolio of 2 properties/year to 15-20 in the next decade. I've got about $575K in equity on my own home to draw from if needed, thought the idea makes me a bit queasy. 

In my experience running a mold mitigation company for 17 years and dealign with hundreds of these cases, it is better to have the tenants out. Mitigation work is messy and noisy. With neg air, dehus, etc. all going it is going to be very hard for the tenants to stay in such a small place, especially with a kid. Plus, it slows the mitigation work down having to work around them. A few days in a hotel will speed the process of remediation up, ultimately saving on expenses. 

You can try a Chlorine Dioxide treatment. CLO2 is a gas which gets into everything. Very very powerful oxidizer but won't break down rubber or plastic like Ozone. Can't be in the structure 24 Hrs. I've used it in pet, mold, cigarette and sewage contaminated structures with near perfect results. 

I'm already in the middle of a rehab in Bellingham or I'd jump on this. But I'd be interested in getting any future listings in Skagit or Whatcom. I also own MoldBuster and can handle any mold mitigation needs. I have co-opt' mitigation and rebuilding with investors before.