All Forum Posts by: Andy Luick

We usually will not install a garbage disposal in any of our units but if it's already there we leave them in place.  Our model is very different as with shared housing, even though we rent to adults and they get to use all common areas of the house, the majority of them don't cook.  If they do cook...it's very simple meals.  We tell everyone DON'T dare dump grease down my drains cause if they clog, you're paying for it.  

I differ on the fridge...because I often have 3 to 5 renters in a property, I place high-end fridges with ice & water through the door.  My renters expect nicer stuff and they pay for it.  I typically get as much for a room rental as investors in my market get for the entire house.  So I splurge in things they will notice and appreciate...better appliances, backlit rocker switches, remote control ceiling fans, 6-panel doors, upgraded flooring, decent furniture and accent walls.  It all creates an environment of "we rent homes not houses."

In a single family house with a ton of cooking going on, disposals are good to have provided the tenant is trained in using them.  Landlords & owners often make the mistake of assuming the renters not only know what the owners do but that they will act on it....nope, doesn't happen that way.  If you rent single family, give the tenant an incentive to not tear stuff up....no repairs all year means you rent doesn't go up or you get $100 back a Christmas...some sort of incentive goes a long way!

welcome!!

If the numbers are fairly represented, my pool of investors would spot this at $178,440 in "value" or what they are willing to pay based on the cashflows.   An appraisal has nothing at all to do with what a property is worth....appraisal is about collateral for the loan as others have stated....worth is simply what a willing & able buyer is willing to pay.  Why do you want the property and what's your plan for it.  I don't know your area but I know sarasota fairly well and a decent 3/2 is going to go for $1600/mo at least right now.  If you turn it into shared housing as I normally do, it will net even more.  The appraiser can't include the two accessory units and is only looking at this as a single family home with comps to support his valuation for the appraisal.  Most of us value cashflows....some of us value resale values....there's a difference in the approaches.  Just pick the one that works for you.

It sounds like you took the appraisal back to the seller and tried to reduce the price...which most of us would, including me.  She's probably broke and wants to make the sale.  I always try to use my closing attorney for these so I can park the additional funds in escrow...although the bulk of our stuff is cash anyway...and I can get those funds returned quickly if the deal fails to close.  I've known my attorney for many years and been through many deals with him.  She balked at the attempt to reduce the price and feels like you're going to short her in the end....smooth her feathers if you still like the deal, honor the contract that you have and leave everything exactly as it is if you want the deal or take your chances that someone else is going to see the same value you do and swoop in and steal it.  That's the game we play at times.

Are these all separately metered for electric?  Probably not...make sure in fact that they are legal and properly permitted or you could be facing the music later on.  It's a catch-22 to get the country involved to make certain that everything is kosher.  It's often better to have a friendly chat with the neighbors to see the history of a property and determine who your problematic neighbors might be when it comes to your renting the place.  I love deals like this one.  Here in atlanta, I'd get $750 for the master and at least $550 for the other two bedrooms plus $700 on the other two units for $3,250 gross.  With our model, the property would be worth over $200k to our backend buyers and that's the value of shared housing!  Good luck with the deal....hope you make it.

No worries you have a ton of experienced folks here who will at least attempt to help set you in the right direction.  BP is a great place to network and make contacts!

Some owners like doing their repairs simply to get eyes on the property to see what's going on inside.  Others do them because they enjoy doing the work.  In the end, it's not really a tax question because you doing the work is going to raise income and taxes theoretically.  I have a number of properties where the renters don't realize that I am the owner and I prefer it that way....I find out a ton more when I come out as the worker or manager than I would the owner.  I know that doesn't answer your question but I'd say do the repairs if you enjoy them and can handle the work correctly....otherwise, find a good reliable handyman in your market especially if you time is valuable.  Look at the time value of money....what else could you be doing more productively or what do you bill out hourly.  I had a surgeon client who insisted on cleaning his gutters...did so for years....his hourly had to be $10k.....until he fell off the ladder and broke his arm!  Now, HandyANDY cleans his gutters twice a year!

You may not want them as tenants...but now you have them so I'm not really sure that you want them to move out.  You'd have a vacancy...what's the rental market there?  They're going to be ticked and likely damage the property or at least potentially.  I get that you just don't want them but have you checked to see what this place should rent for as a daycare?  I'd check with the owners of some and see what they are paying for rent...tell them the situation and they will likely help to put a competitor under.  It might make sense to come to a reasonable rent for a win-win and just make sure they have the proper insurance in place naming you as an additional insured.....a child dying on a playset can get expensive.

We just had that happen recently in roswell where a daycare operator was short staffed and went inside to attend to a small child....another little boy got his head caught in a swing and died.  Very sad situation that the operator had already been cited for.  Along that vein, if you do decide to pursue this make sure they guys are clear of any violations with the state.  You might want to come to terms and then sell this unit off as a rented commercial property as it must have the zoning for that...but check and see.

What is the rental capacity now? Why are you interested in this particular deal? Condos can be tough because a lax enforcement of the rules can suddenly become draconian or a property without rental restrictions can suddenly get them voted in and then you CAN'T rent it out anymore. That has happened quite a bit in atlanta but mostly intown locations like buckhead and around roswell road sandy springs. I've rented my condo units and never told the HOA a thing...and I've never had an issue because we have excellent renters and its always shared housing. Most condo's I have done are on the busline so I have rented to tenants without cars and it's helped keep everyone happy.

@Account Closed - am I missing something but why the hostility?

Certainly welcome to BP - but slow down a bit....why graduate at 15?  Enjoy yourself and your high school and college years.  Congrats on the achievement but you really don't want to be 15 in college...all the best!

Austin is a great town with a ton of growth and it's just a fun, youthful place to be right now.  Before you line up to buy anything.....get in the market for a bit and pretend to be a renter.  Shop the competition a bit and get a feel for rents and quality of properties. You can also acquire some owner names in the process if something is a bit run down and you can always ask if they might want to sell.

We all say this but start networking at reai and with local wholesalers...a lot of these guys solicit via internet marketing and they move product quickly so the best deals go to cash buyers.  Start to network with some estate planners and financial planners and just let them know you're in the market for multi-family.  Sometimes you can catch a deal that way....an old timer has amassed a bunch of properties, didn't keep up on the maintenance and the widow or kids have no interest in them.  Network with some local contractors and let them know you will toss them a referral fee if they come across an owner wanting to sell.  Novel approaches but they've worked for me at times.  Even in a hot market....with some effort, you can always find a deal!

For the basic staples of our business - it's a great idea to run through Craigslist to see what's available in your market.  I have often picked up a $4k kitchen for $1k.  HandyANDY does quite a bit of repairs on highend homes when they sell and I can't tell you how many times we've gotten free kitchens and baths because the buyers wanted something else!  Love it when that happens.  Some remodelers will post those sets on Craigslist and load them up on your truck right from the worksite.  You'll see this a chunk in the tonier parts of FL, NJ & NY but we get it here in atlanta too.

If you're flipping and want to develop a name for selling a better quality product then spend some extra on the cabinets.  In atlanta, I'll take a look a builder's surplus once in awhile but I like the knock-downs we can get....even though I hate Chinese products in general...we get solid wood fronts and plywood boxes...when everything cheap at Depot is MDF/OSB junk that will NOT hold up in kitchens or baths.

In your area you might want to check:  Builder Materials Outlet  http://www.bmofl.com| 5316 N. Davis Hwy, Pensacola, FL 32503

I don't know anything about them but it looked like they had some decent pricing on kitchens cabinets.