All Forum Posts by: Austin Davis

@Russ Draper-I am considering geothermal because my boiler is past it's life expectancy and, instead of getting a new boiler, I am looking into geothermal and paying for that for the tenant.  Otherwise, I would want to put in separate heat for each unit and put the cost on the tenant, which I assume would be comparable to the cost of geothermal, but not save money for the tenant, so rents will not be able to be increased.  I was thinking that if I am able to lower utilities for the tenant, I could market the apartments as "green" and potentially get more rent on top of this.  Conservatively, I am thinking I could get the utility cost to go down for me by $250 and rent increases by $50 per unit ($200/month) by going this route.  I am in the very early stages of researching geothermal, but does this make sense?

@Brad Starling-Thanks for the info on Solar.  I really appreciate it.

Hello!

I will start by saying that my goal is to have enough cash flow to support my family if I didn't have a job.  To do this,  I obviously want to purchase more properties, but also make the correct investments in my current properties(3 4plexes) to increase cash flow and instant equity.

One idea that I have to do this is to look into renewable energy such as Geothermal and Solar.  Currently my tenants pay for electricity only and have window units in the summer.  By putting geothermal in, I would decrease their cost for AC and my cost for heating.  If I also put in solar, I could take over electric as well.  With this cost savings to the tenant, I could split the water and put trash back on the tenant as well.

Conservatively, I am assuming that this would decrease expenses by $250 a month, which would increase the value of the property by about 30K using a 10cap.

I am not sure how much either of these cost yet, but does it make sense to pursue this if the cost out of pocket would be less than the property value increase from the decrease in expenses?

Does anybody have experience with Geothermal or solar ROI?

Will Geothermal even work in a 4plex?

Thanks!

Welcome to Cedar Rapids @Tyler Ebnet!

I also wish I would have found BP before I purchased my current house.  I love where I live, but also would have pursued the live in flip if I had to do it all over again.

I wish you the best of luck and keep us updated on what you find for your next flip.

Thanks @Brian Gibbons and @Steve Vaughan.  Glad I am thinking on the right track.

I will search the forums, but any advice that you guys have on how to do a subject to, correctly?  I assume I don't want to to contact the bank, right?

Hello, BP!

Over the weekend a motivated seller found my name via google (I assume my BP profile came up) and wanted me to help them get out of their condo in Cedar Rapids, Iowa.  I have some ideas on how to create a win-win for myself and seller, but wanted to run them by BP nation for some advice.

Details: It is a 3 bed, 2 bath condo with 1 car garage. Assessors site value is about 96k and they paid about 80k for it in '09. They owe about 71k on the loan. HOA fees are $154. I spoke with the president and the HOA finances are in good shape. Seller says that they want to close fast and would like to get what they owe, plus enough for 2 months rent and enough to cash to move out of state.

If possible, I would like to purchase this property myself, do the rehab and sell it.  I am thinking the best win-win for this deal to keep my out of pocket costs at a minimum would be to take over their mortgage "subject to" and pay them about 5K.  Then I could rehab, rent it, and have enough equity in it to sell it at a profit if needed.  However, I don't know much about the "subject to" deals and really worry about what would happen if the lender actually did use the 'due on sale clause'.  

Any advice on how to proceed would be much appreciated.  I have also considered a lease option, but am open to other ideas as well.  Thanks in advance!

Welcome, @Floyd Orr!  Wish you the best of luck.  Make sure to use the BP for questions and motivation.  Keep us updated on your progress.

@Andrew D.-I am also a DR and RDPD fan and have developed a similar goal.  What to do with my personal debt (my house) is the biggest dilemma.  I think I have landed on putting most of my leftover personal income and business income into more RE until I can build up my portfolio to where I want it and using the cash flow to pay off my house.  

I agree that DR is not for entrepreneurs, but do think personal debt that puts you at the greatest risk because you need a job to pay for it, where the rentals (should) pay for themselves.  That is my rationale for using both approaches.

After I pay off my personal house, I will have a similar approach to you and work on paying off my rental mortgages until I have enough cash flow to quit my job. At that point, I will either pursue more RE investments or just enjoy life for a while.  

The reason DR says to pay off your smallest debt first is so you can "feel the small win" of paying off debt, which is geared toward the person with a bunch of personal liabilities that doesn't know where to start.  This approach wouldn't be for the entrepreneur who is trying to increase cash flow.

@Glenn McCrorey  Made my night, Glenn!  Very funny.

I have 3 4plexes off of Edgewood and Johnson. The self storage place is going to go in right behind Guppys on the Go.  It's an open lot right now, but I went and talked to a surveyor that was on the property about a month back and that's what he told me was going in.

@James Seely

I haven't in self storage (yet), but there is a facility about ready to be built right next door to my appartments on the NW side of town.  I assume the invester that is putting this place up did their research and it told them that there is a demand in that area.  Hope that helps some.