All Forum Posts by: Peter Sanchez

DC will require you to have 2 egresses, so you will need another door, or larger windows (with no bars).  If it's a row-house, you will need to notify your neighbors and get sign off, and I think you need at least 7 feet to make it a legal rental.  

With the underpinning, make sure you get someone whose done it before and has a lot of insurance.  And make sure they only do dig 2 feet wide at a time, even though 4 feet is allowed. These really old houses don't have cement between the bricks, it's lime and sand mortar, so it's not very secure when you dig under it. I'm sure you've seen some of these news reports with underpinning where they dug too much at one time and the wall collapsed and damaged a party wall damaging two houses. 

If you plan on living there a while, an extra living space would be great, but if you plan on selling it soon, I don't think it's a great investment of your time and money. 

Rubber will fail eventually, which is why every garden hose has annoying pin-prick leaks.   If the rubber hose fails, I guarantee it will be when the tenant is on vacation and it won't get discovered until it's too late. If you weren't changing the washing machine, I would say don't bother, but if you're already buying the washer, you're going to disconnect the hose anyway to install the new one, so just go ahead and replace them. I've NEVER heard of a braided metal hose failing.  

@Preston C. I think the 10% number may be a bit optimistic because interest rates are so low now. Stocks yielded 10% when you could put your money in a bank and get 5%, now that banks are paying less than half a percent, it could be that we are in a low return environment for a while. The trailing 12 month price to earnings ration (P/E) of the SP500 has historically averaged about 16, it's 24 now.  In 2000, it was 32, so we're probably on the high side of "fairly valued" markets, and the problem with it is the problem that many are having in Real Estate--it's getting harder and harder to find a bargain.  Have you thought about splitting the baby down the middle and investing in REITs or Master Planned Communites,, which have the liquidity and professional management to avoid the headaches with direct ownership, but still let you participate in real estate (albeit on an unleveraged basis). 

Nothing wrong with a $50k house that is cash flowing.

1. You are buying something that is cash flow positive

2. You are buying it at far less than replacement cost

3. Competition is constrained because any new builds will be at the cost of new construction, which is more than you paid for your house, so they will charge higher rents, meaning YOU will be able to charge higher rents and/or the value of your property will go up.

4. For 500K you can buy one California house (maybe) in a state with very landlord hostile laws, or 10 50k houses in a state with landlord friendly laws and you diversify your risk of loss from getting a bad tenant.

You decided to invest in California and are now looking for reasons to justify your decision. If it works for you, great, but other people are making money and doing well investing their own way. Their way isn't "wrong". If their bank account keeps getting rent checks and their net worth goes up, then it's working for them.

@Stephanie D. looks like you are doing a good job of crossing the "t"s and dotting the "i"s.  When you mail them the check (or any other letter) make sure it's certified mail so that you have proof that you sent it. Also, you mentioned that they hung up on you...since it looks like they were not on the same page, you should put that in writing (email or letter) so that it's not "he said, she said" later on. Something like "On our conversation on xxxx 2017, I informed you that if you stayed past June 30, you would be charged prorated rent. Accordingly, i have deducted xxx ( 1 day prorated rent). I have also deducted xxx for re-keying locks since the keys were not returned and xxxx). " Good luck with the new and better tenants! 

Every large/medium size city thinks it is going to be the next silicon valley. Nope.  Not to pick on Indy, but the reason you have Silicon Valley in Palo Alto and not Peoria is that you need 2 things at the same time. 1) Smart people, and 2) people with money.  Palo Alto had Stanford nearby which had the best radio engineering program in the country, and their graduates included Bill Hewlett and Dave Packard who were patient zero for the tech boom.  And...a LOT of money in California. NYC(money and great universities like Columbia, NYU) created Wall Street. Boston ---Harvard, MIT + $$$ = Biotech powerhouse.  Places like Upstate New York (Cornell but no money) don't change.  Places like Miami (Money but no elite universities) don't change either. 

@Lauren Van Riper "The only response to her that at this point that is appropriate to give is, in a email and you could drop at door also is, : I received your email. Attached is the move out check list. I will not be able to extend the date any further. Please have your keys turned in by 12 noon that day and all personal belonging removed." 

THIS!!!! A THOUSAND TIMES!!! 

The best other suggestion is Cash for Keys because 1) it will make sure she leaves without you paying for an eviction, and 2) you will make sure that nothing is damaged because if she damages more than the security deposit (because she is angry and unstable) then you will be out of luck. I know you don't want to reward bad behavior, but it's a cost-benefit thing, not an emotional thing.  If Bank of America is okay with it, then you should be too. 

Don't bring up or talk to her about her personal problems, whatever they are, because it's not your business. Your last name isn't Gallo and you're not in the white whine business.  Citibank doesn't get involved in her Drama Mama stuff and neither should you.  Good luck and don't forget to post a follow up when she leaves!  

Looks great!  I can't believe you got that all done, including the kitchen for $10k!  Great work!

@Paul Winka If you've never done it before, instead of the drum sander get the random orbital sander.  The drum sander is quicker, but you can gut large gouges in the floor if you do it wrong.  The random orbital sander is like a giant palm sander instead of a rotating drum. It goes a lot slower, but it's great for DIYer's because it's pretty much fool proof.  

Great work!  The before pics don't look terrible, but it looks a whole lot better after you opened up the kitchen and painted it.

And now that you got most of the money back out, you can do it again without having to sell this one and paying income taxes on the gain.