All Forum Posts by: Pat L.

Back in the old days we pushed hard on concessions for surprise defects after a thorough inspection. Our home inspector was amazing & we would invariably get a 40page report. The largest concession we got was $20k for a roof in poor condition (circa 1823), but the woman just wanted out. That roof did last 7 years until a tree branch went through it & it had 13 layers of whatever. The cost was $15k & we immediately sold the property for 3x our total cost.

Another we offered 50% below list & waited out the seller (who inherited the property) for 8 months & they came back to our offer after losing all tenants. But we also had a great RE agent who would go with the many lowball offers without objection.

Now days it's a tough call, unless you can mitigate the cost of repairs or do it yourself as we always have done, except roofs.

interesting revival of an old post. 

We are beyond being concerned about a potential recession, other than that it may offer the potential for another buying spree.

During the early 2000-2010 RE debacle a family member would send us weekly doom & gloom emails confirming his 'internet fueled conviction' that my wife & I would go bankrupt during the impending crash of the late 2000's. In fact he insisted on sitting down with us (a grueling 2 hrs), to review what we have achieved & then sent us a 4 page dissertation on everything we have been doing wrong for 35+ years, even though everything we owned was & is free & clear & I had retired in 1998. He also reminded us that he meets with & confers with much smarter investors than ourselves.

Being contrarian we just kept buying & buying (CASH only) & now that prices are 80-200% *** higher (& we are aging), we are unloading, but not before enjoying years of high double digit ROI's just on rents. Then as we sell we often hold the notes (@12%+), we have done this for 30+ years. Admittedly we have had 2 foreclosures & several DILO's to extricate the properties & then did aa 'rinse & resell' for usually 2-3x our overall cost & again held the notes. In fact we have one investor friend & his 3 kids paying us 12% on quite a few properties for over 15 years (an RE annuity). He still buys anything we want to unload, BUT he has also made a lot of money & it allowed him to retire at 50 & is forever grateful as his health has declined since then.

Meanwhile our skeptical 68 yr old family member, now in very poor health, is still working trying to afford retirement & recently took out a large adjustable rate HELOC to live on & maintain an image. Over the years his wife & kids have secretly invested their money with us & appreciate their double digit returns.

*** In deference to the latest NYS vs Trump RE case, our property value evaluations are purely subjective, yet have been confirmed by sales of same !!! 

Great post...oh the stories, we could all write a book.

On a rental gut/rehab we had removed the old cast iron plumbing out of the upstairs ONlY toilet & everyone was told not to use it. We were all in the basement removing/installing HW tanks & heard the front door slam shut, then the hurried pitter patter of a woman's stiletto high heals rushing up the stairs. So we kept working & then we heard the woosh/splatter of the toilet flushing a 'number two' down onto the newly sanded but not yet stained oak living room floors & all over the beer cooler & tools. It was the one of the partners wives and she NEVER showed her face there again. 

 I admit that many of the exasperating tenant/repair experiences blend into faded memories, but they often bring a smile. There were frustrating years of bloodied knuckles, a very frugal lifestyle & friends/family/colleagues telling me that I will never make money from 'those slums'. But retiring many years earlier than colleagues, who told I would go bankrupt, was so satisfying. Those same colleagues worked past 65, many taking on menial jobs to supplement retirement.

Then there was the bat house. It was a foreclosure rural & inside it was tough to breath.We counted 70 dead bats in various rooms & in the bathtubs/sinks/toilets & I couldn't imagine the piles in the attic. We threw an offer in at $25k but an investor friend picked it up for $75k. They then came to us for financing, so we did well on the 12% loan as it took over 18months to rehab.

@Colleen F. yes the expense of water was a consideration, but the rent increase more than compensated. Currently the water for that building runs about $115/month. Interesting but expected, the latter did increase after 2 of the tenants had babies.

Had a similar problem with the upstairs staying around 80+. Problem was in the original 90's era ductwork design whereby the cold air returns to the furnace were inadequate & in 2 bedrooms non-existent. As the HVAC design tech said it was like running a mile then breathing through a straw. Strange analogy, but the furnace motors were overworking to keep a reduced return airflow flowing over the Evaporator Coil.

I would run from the bowing basement wall issue. 

But on the roof issue we had in the last negotiated with our insurance carrier to exclude coverage of the roof they didn't like the look of. It was an addition to an 1845 era home whereby the roof in their words had a 'horse back sag'. That has since been sold after 7 years of a significantly reduced premium. A commercial building we own still has full coverage minus the roof coverage. The tenant is a roofing company, so they repaired it & it no longer leaks, but the insurance premium is still significantly lower & we are in the 8th year. 

we went from inherited high maintenance coin operated to scratch & dent free use. We raised each of the 4 units rent $50/month to cover costs. I also hooked up a meter to audit KWH usage & it was lower than expected running <$35/month.

An electric dryer o/load was the only issue blowing a $15 thermal fuse. It happened twice & they haven't overloaded it since as it was conveniently down mid-winter for 3 weeks, "waiting for parts". Going on 6 years & no issues since, one tenant owns a cleaning company so he keeps the laundry room in great shape.

had a similar issue with a large Scottsdale AZ home built 1994. The upstairs would rarely go below 80. I found there was a deficiency in the return air system. Cut into the wall added a large return air vent & fixed it. That home had been occupied by several families over the years & they just suffered the poor a/c. 

 Of all the homes I bought @ 18% I wish I didn't sell a few whenever finances tightened & co-workers told me I'd go bankrupt on the junk I was rehabbing. Also wish I had more foresight when rates dropped significantly, but I did retire early in life (1998).

 yes had a couple of fellow investors lose their iCloud access or the files were found to be corrupted. 

I guess keeping files safe depends on  'location, location, location' :)