All Forum Posts by: Neil Beeharry

Hi Mark,

there are two individual tanks that are currently connected. If i were to add an additional furnace, i would connect each tank individually. 

along with the info from @tim holmes, the furnaces may need additional modifications for the size of the apartment.

electric may be a good way to go. 

thanks

@brian ottesen - can you give some specifics on what you mean by "worse terms"?

I am beginning to think about going this route and so your experience on terms would be valued.

thanks

Hi Travis-

yes, going with one unit having oil, the other having electric baseboard is another possibility. 

would you put in the extra expense (upfront) to allow the savings down the line (ie having the tenants paying for their oil/elec), or not consider this unit as recouping that outlay would take a few years?

thanks 

Hi John,

this is a duplex i am thinking about so not an issue with current tenants as i would implement with new tenants. 

my overall concern is that the rental cap in the area is about $700.

My previous calculations (where owner pays oil) was based on $650 per month. 

So the 'extra' $50 x 2 = $100 per month would take 4 years to pay off. 

i am still new to REI so the idea that the additional investment of a furnace that would take ~ 4 years to pay off sounds like i would be better off looking at a different deal?

thanks

Hi Kevin,

interesting idea and one i had not thought about. 

I'm wondering the recourse if a tenant disputes how much they should pay. 

Let's say i do split 60/40 due to the difference in apartment size. Now let's say one apartment is away on vacation for 2 weeks - they could accurately argue that they did not use they allocated amount of oil and dispute paying for it. would i pay out of pocket for the difference?

seems it would set a bad precedent.

i like the idea, i'm just not sure of the feasibility of applying it. 

would like to hear more of your thoughts on the matter. 

thanks 

Hi all,

i am new to REI and would like some advice on how to look at a issue that exists with a duplex i am interested in.

currently, the owner pays for the heat (oil) for the 2 apartments - his estimate is $4000 a year.

However, if i were to purchase I would prefer to have the tenants pay. the issue is that there are two oil tanks (connected) but one furnace that powers the heat for both units (hence the owners pays as no way to separate out). 

i have run the number for the property. Since this would be my first duplex i have been conservative with the numbers - after subtracting out vacancy rate of 1 1/2 months for each unit and a repairs/maintenance of  10%, the combined cash flow would be $400 per month. 

However, this also takes into account the $334 per month the owner pays for oil.

so my question is, do i go ahead and add a second boiler (likely ~$5000) which would then allow me to have each tenant pay for their own oil and increasing the cash flow to $734?

Since i am looking at C class units (this duplex is on the market for $48000), is it better served for my $5000 to go toward a duplex that already has a separate unit? I should say, that other than the oil issue, both units are completely remodeled. 

Many thanks for your advice

Neil  

Thanks JD-

seems i might be going back to HELOC route as i'm working in the lower end of the market. the units definitely will not appraise for ~$67k, more likely in the $40k region.

i will keep those numbers in mind when thinking about next property to purchase

thanks for the advice - i'll set out to clarify whether refi is actually an option for me. 

JD-

how long after i've purchased the property can i refi? 

Hi Mark,

thanks for the comment. I spoke to rep at TD bank a few days ago and got details of HELOC on investment property (mine is in PA) - he said it's doable. You might give them a try and see if that might be a way to go and counter the high refi costs?