All Forum Posts by: Andy Luick

You absolutely don't install greenboard in wet areas anymore....PERIOD.  The problems with most of us contractors is that we just do what our Dads taught us or what we learned years ago....most of us are never looking to learn new techniques.  The issue with greenboard is two-fold..grout cracks over time, as does caulk and water will gradually get behind it.  Using redguard over it will help with water from the shower side but I'd rip it out and redo it.  As the others have said, if that cost breaks the bank, you're in much deeper trouble.  Not sure where this job is but I thought pretty much everything in NY had to be permitted...which it seems like no permit here.

2nd issue is one we usually overlook....it's the condensation factor of air conditioned space abutting outside walls.  Even using Redguard or a similar product, you run a pretty good chance of mold on the exterior facing face of the greenboard.  When 75 degree air hits 100 degree air, moisture is pulled out of the air and condensates on the surfaces....wood/paper & drywall then become a food source for mold.  Any moisture getting behind or condensation can also gradually rot the framing.  We see a ton of this in Atlanta.....in most older homes that work on intown actually.

There's lots of good and bad advice on BP, you just have to sort out what works for you.  Many investors make the mistake of going with the cheapest contractor to boost profit....especially true on flips.  If it's a long term rental for you, you want to do it right the first time.  If you're flipping it becomes a question of ethics...all of those short-cuts add up to big repairs bills for a new buyer.  We just had a $400k housing in decatur area that was a total rebuild/redo 1.5 years ago...but lots of short cuts.  They took a 2/1 and made it a 4/2.  Builder didn't flash the valley or the inside corner where old house met new...resulting in rotted subfloor/framing, sheathing & oak flooring.....plus mold.  A little extra time and $50 in materials would have saved several thousand.  Sadly, this is just one of many issues with this home.  Happy Investing!

IS the $120k - $130k for similar homes in the same condition as this one....or in great shape and retail sales?  Since it's a college town, I'd be looking at it differently....how many bedrooms?  baths?  What's in the repair budget?  Huge difference between rent-ready & retail.  Depending on the rooms, I'd fix it up decent without going over the top and run the numbers rented by the room.  Give your property manager 15% for it and let parents pay online for the kids.....where possible.  You'll get better rents, higher net rents, less turn-over.  If it's an older home, it hopefully has hardwood floors....then it's just repainting a room or two when people move out.  Just a thought....

I wouldn't put him on the lease at all.  I would ask for 3 months rent at signing, 1st, last and a security.  How much is the monthly rent here?  So she isn't working at all right now?  I would have him sign a personal guarranty for the lease term with a stipulation that the last months rent would be a draw down against late payments and, if used to cover current rent, is to be immediately replaced.  I wouldn't want him on the the lease itself as that would also give him the right to move in...,he loses a job and needs a spot, here he comes.  I have some of my renters get guarrantors but it's pretty rare. 

You can always have an oral lease if it's for a year or less.  It looks like TX requires a 30-day notice from either party with an oral lease....if you want to terminate the lease.  In GA, it's 60 days for landlord to give notice but only 30 for tenant.  Is she paying the rent timely....or what's the issue aside from you wanting her on a lease?  If she is paying and a decent tenant, I'd be inclined to keep her.  How long has she lived there?  I have renters who have stayed on month-to-month for a couple of years after the lease reverted to that from a 6 month term.  If I end up with several in a house all month-to-month, I will usually give one of them 30 days notice to terminate with an option to resign for another 6 month term...usually at the same rate.  We communicate with most of our tenants and explain to them upfront that we might be forced to push them back to a 6-month term later down the road.

Floating floors have come a long way since Pergo hit the market in the 80s.  I've installed most flooring but have never done a ceramic floating floor.  I can't see it not having issues with cracking tiles over time and wouldn't recommend it.  We have laminate in some of our rental bedrooms and it holds up ok...just have to remind renters not to wet mop it.  You might want to use a slightly darker finish on the bedroom to high most of the water stains or at least tone them down a bit.  

You really want to avoid flex duct as much as possible....it deteriorates, debris clogs in it and, if it gets clogged with a gas dryer....it can cause a fire.  We try to hook a blower to ours in rentals every season to keep them clear.

I wouldn't assume anything other than that BOA doesn't care.  They want it sold for highest and best offer...which is where you should have went with it if you were willing to offer more.  Unless you signed a buyer's agent agreement with your real estate agent...that agent was really representing the seller all along.  If you're a strong cash buyer, there will be plenty of deals for you so keep looking.

Life happens to us all.  Go ahead and give them immediate notice that you are filing an eviction but if they can pay you the money...super.  If not, they will have an eviction on their credit at least to forewarn other landlords in the future.  Oftentimes, a tenant will realize the problems that an eviction causes when they start getting turned down for other properties, a car loan or trying to buy a home of their own....and will then settle up.  I'd be apologetic about and just tell them your hands are tied.  Check what the process is for eviction with the magistrate court in your area.  You can go ahead and give them notice now...whether you file or not later is up to you.  

You can't assume that a tenant who orally tells you that they are moving...is actually moving. It can often be a ploy to drag it out some while they continue to live for free.  I have filing evictions but usually now file the first week.  Most of them get worked out or come up with a payment plan.  We don't run into this as much with shared housing which is another reason why we like it!

We make renters insurance a requirement in every one of our leases and go over it thoroughly with tenants so they understand that our insurance doesn't cover them or their visitors.  Having worked in premises liability once upon a nightmare ago...it's a huge issue with me.  We always tell them they can get a cheap policy by adding it to whoever has their auto coverage.

@david - no david it doesn't but thanks for asking. I don't think crowdfunders can do a VA loan or a 203 but maybe you know something more of it than I do. Of everything we've done, we've only done a few crowdfunded deals. I mostly joint venture and stay away from loans. I like groundfloor a lot and would recommend them to smaller investors all day long. Small investors can get great returns with almost zero risk. Not sure where you get your information from but none of the loans is in default although one may end up getting foreclosed, not really sure what direction that one will go to be honest. If it does foreclose, there is sufficient collateral there for the groundfloor investors to be made whole and I personally guaranteed the loan so I'm on the hook for it. That property is one that is more "inner-city" than anything else we've done with shared housing and ended up having it robbed repeatedly by someone who lived down the street. It's also a 3/2 which is smaller than anything else we would typically do. Is what it is.

One is renovated and rented and in the process of cashing it out over the next couple of months...that loan isn't due until next year. The third property is partially renovated and it is sitting. The JV partner there wanted to sell out of it, attempted to but was unable to do so. I am now weighing the option of continuing alone and buying him out or letting him swim on with it. We can keep you posted with these on a separate thread.

The lender I mention here is someone I know personally and has nothing to do with Groundfloor or any other crowdfunders.  He is direct with a bank and can do some pretty creative things.  If I have to get a loan, I prefer a direct lender but my ears picked up when he was telling me about this particular loan and I thought it might be useful to some of us here.  Like you, I love to get ideas here at BP and try to help where I can.  Happy Investing!