All Forum Posts by: Bob Hank

The older duct work that was 6” and called “spider legs” was some times covered in a paper with asbestosis in it. Same with the old oil and gas heating systems. The old heat / water lines were also covered in it. There were a few different types of addict insulation that had it. It was in joint compound, popcorn ceiling mud, paint, linoleum tiles and sheets, and almost ever other product that you could buy.

But the true issue you need to talk to them about is how many items that they have bought over the last 5 years have asbestosis in it and have they had it tested. Asbestosis is still being used in manufacturing today and is being sold to us in the USA with out any kind of notice.

There is nothing wrong with lead. Think of how many housewives sat around at home every day drinking water out of pipes that had lead solder, the kids that drank the water at home and went to school to drink the water also, or the man of the house that went to work every day to do the same. Look at how many homes still have copper piping with lead solder. I would bet that more than half the houses I have sold or currently still renting have at least a couple of fittings that were done with lead.

Lead paint can be more harmful. When it chips the dust can get into your lungs and that is what caused the issues. “Lead white” paint was about 3 times the cost of regular paint. If your dealing with lower income property and it has been for years a lot of time you will not see much lead paint.

Did she ask about copper piping? Every item that is sold in CA that has copper in it must have a warning. My under standing is it can be more deadly than lead, but I might be wrong.

Even if someone tested you home for asbestosis and lead you would still have to use lead and asbestosis forums when selling and renting according to laws. The testing dose not get you out of the requirements.

I bet that if you did rent to her she would be calling the health department at least 4 times a year about something.

If you have a warranty issue they have a list of ways to get out.
Claim is moisture was out of there specs at installation depending on the issue.
Claim the routine cleaning was not done according to the warranty instructions.
Most companies have a foot note that says “lifetime” = 50 years.
You will also see “under normal house hold use”.

We told the bank that we are all in as long as nothing pops up in the rest of paper work were going though and we also want the option to add a partner to the contract at any time. She told me that they would start drawing up the paper work today.

I'm looking at partnering with one of people that I have worked with before on larger deals. It depends on how the time lines work out for everyone, but if it comes down to it we will take it on our self.

Joe
I'm a GC and we try not to contract out any work, but roofing when it's 100* out side is not something we like to do.
I was offered a loan for 750K with an other inverters up state that I have worked with a few times. If I take the loan from him he will send down a rehab crew for a week or 2.

Michael
I have 10 more houses to look through this after noon. My wife and her staff have been running numbers all morning and it looks like I will be making an offer on Wednesday. We still have a ton of paper work to get through.

Michael.
That side part of the city normal sells fairly fast if the prices are fare. But you see to many times where some puts an older home that has not been updated trying to get top dollar that sits on the market.

K. Marie
So far all the homes are good candidates for “retail sales”. We don't deal with wholesales or to sell to other inverters.

41 of the houses is currently rented. Right now it's a $987,000 take it or walk away. They are being old free and clear. Yes the bank took them back and is using a management company to keep them filled. From what I have been told some of the houses were to far under water and some were about paid off so a group sale works better for them.

Your not missing anything. I just have not been primary buyer / inverter with mass sales like this before. I have help fund them and I have also taken a crew out of town to help rehab my investment. The people that I have worked with will be unable to help the rehab, but have offered funding. Currently we (the company my wife runs) have 133 houses, 5 retail, and 2 light commercial properties with in 40 miles of our office. We also do not deal much with houses that would sell or less than $175,000.

Michael
It's a middle income area with a decent mix of nationalities. Nice size lots and close to stores. I know that if I buy I will have these for years, I'm thinking it would take around 5 years.

Steve
I will keep you in mind if I don't go for it.

I can see the differences in the as I read the post and look at the states where people are.

Kevin
The bank wants them all off there books by June and I have till 10-18-12 to make up my mind and to get the contract rolling.

We hardly ever use a contractor except for roofs.

It's all zoned R-1 Single family. There is not room to subdivide the lots and to pack in more houses.

Jason I will keep you in mind if I it dose not work out for me. I might need a 500k loan depending on the speed the bank unloads them on me.

I go to the building department and get them print out all the information they have on address. It's on a single system in the county, but in the city they have 2 different systems they have to check (it will be different where you live) and if you want they will let you dig through the paper files to go back even more.

I know this is time consuming, but at the same time it can save you money in the long run knowing what was done and when. Some times you can find stuff that was done with out permits and I have been forced to open up walls for inspections and to fix a jack leg job.

Right now they are renting for $700 to $750. The bank is just trying to keep people in them till they can get ride of them.

It's a buy them all or take none.
I have not asked the bank yet about a loan. I do my best to run my business with out any loans. My book keepers running the numbers.

I think the best plan on getting them from the bank would be to start at one end of the street and have the bank give them there 90 day notices. Stagger the notices to 2 or 3 a week to get them flipped. Make sure the title company gets working on the house as soon as there given the 90 day notice in case they move out early we will be able to close.

Steve that’s a great point on doing a few owner-finance and friendly deals to get the comps where I want them. That was my main concern.

A big issue is if I add 42 more properties to what we currently have is that I will need to add staff to manage all the rentals. I think I’m close to the tipping point and it's a PITTY trying to find good help that's willing to learn to do stuff the way I want it done.

From what I see on GIS the houses were re financed over about 10 years. All of the loans have different pay off amounts, but it works out that they want $23,500 each. I can see them being sold for $100,000 (2/1.5) and $110,000 for the (3/1.5 and 3/2) with about $15,000 to $20,000 in rehab. To rent them out I’m looking at around $10,000 to $15,000 in rehab, should get $950 for the 2 bed rooms and $1,050 for the 3 bed rooms.

I think the biggest issue I’m having is how do I get the word out that this is an up and coming neighborhood.