All Forum Posts by: Robert S.

@Laura Williams

Seems like you are good to go, disconnected dust work and nonfunctioning coil will certainly jack up the electric bill. You’ll find out for sure when your tenant receives the bill in February.

Originally posted by @Laura Williams:

I want to thank everyone for all their feedback. This thread has taught me so much about energy conservation and so many great info and ideas. I had an HVAC guy come out today to look at the furnace and one of the 2 heaters on it wasn't working which he fixed. He thinks it will make a big difference on the bill as he said it had just been running constantly cause it only had one heater working on it. Apparently that is common thing to happen on an electric furnace which I just learned. I'm still going to take the suggestions on here to seal everything and the windows, doors and basement insulation and see what happens on the next bill...fingers crossed. 

Great news... Hopefully the repair wasn’t too expensive, definitely seems worth it though.  How did your tenant take the news that high bill was due to a broken furnace?

Good day @Laura Williams.  I would examine a couple of factors before going into full on window replacement.  First, are you able to remotely monitor the temperature setting at 70 degrees?  Are the tenants responsible, meaning they turn heat on and leave windows shut?  Case in point, I keep the temperature in my home at 70 degrees, and it's a split level that was not insulated well during original construction(as I move from project to project within my home I add proper insulation).  My average utilities bill is $260/month.  Second, what type of exterior is the apartment building, brick, siding, stucco?  Do you own the whole building or one unit in the structure?  What floor is the problem unit on?  And lastly, how far away do you live from the property?  Based on your answers to those questions, I can probably figure out a solution that would not require window replacement.  Please free to PM me.  Best of luck.

@Brian Wilson @Matthew Paul Thank you gentlemen, your compliments are noticed and much appreciated.

@Nick Rutkowski Good day, seems like there are a lot variables here that need some addressing. Let’s see if we can identify them and go from there. Do you use an architect to draw up plans? The reason I ask is that I work on a lot of large commercial projects(read projects in the hundreds of millions of dollars) and even those mega high paid architects and engineers miss things in their design. Unfortunately, they don’t pay for the things they miss, they have a line in their contracts that removes them from responsibility. Ask me about this super high end movie theater I built a while back, be more than happy to share that story with you some time down the road. Let’s get you out of the woods with your current situation first.

The contractors bid the prints, and anything that is not on them costs the customer more, not the architect or engineer.

So even on a single family residential project, I built homes from the ground up as well, if the architect misses something, the customer pays for the extra. Why? Because contractors bid what’s on the drawing.

If it’s a remodel/renovation, and you decide to not use drawings, which is very common, the contractors cannot bid what they do not see. So if you want to take out a wall, the contractor can only use an educated guess as to what is in that wall. So if something is in that wall that shouldn’t be there and was covered up with Sheetrock (like buried electrical junction boxes, this happens quite often with flips on older homes)this is considered unforeseen, and the customer pays extra to deal with whatever that issue maybe. These are risks that the investor takes on when they purchase the property, and even the most thorough inspectors will miss things like this.

Extras are a killer. Changing your mind, also a killer. Why? As an investor, you have a problem, you hire the contractor to solve that problem. The contractor gets paid for his expertise and time. If you present a problem to the contractor, i.e. - I bought this outdated house and I need it updated so I can sell it a profit, however I can’t do it myself, can you do it for me? The contractor will come up with a plan, figure out the logistics of implementing the plan and then execute the plan. If you change your mind or add something to the project that alters the timeline of that plan, it will cost you money.

How can you minimize these occurrences?

Create your own plan at the beginning of the project. Ask the prospective contractor(s) the best way to achieve that vision. Common rookie mistakes, having your painter do his job before the electrician. Why? Electricians often need holes in walls and ceilings in order to run wire from the switch on the wall to fan light combo you want installed in each bedroom of your flip. Those holes need patching by another trade. Best to have your painters and tapers come through and not call them back, more often than not, if they can fit into a day’s work, there is no price difference between patching 20 or 25 holes. One important thing you can do, educate yourself on the signs of trouble in the home you purchase. A good way to do this is to identify what caused the extra costs on past projects and examine how they could have been avoided. A case in point, during a basement remodel, the previous owner left a rather large cabinet up against a foundation wall. It was so heavy, one person could not budge it, so the home inspector can’t be expected to move it. Years later, when the new owners went to renovate the basement, they got rid of the cabinet only to find cracks throughout the foundation spanning the width of the cabinet. Lesson learned, sellers will do anything to hide things during a sale that will cost them money. Wholesalers, real estate investors are no different, and are probably better at hiding things than regular homeowners. Learn their tricks. The contractor who bid the job will charge extra to fix those cracks. Those cracks aren’t included in their scope.

There are literally thousands of these scenarios of why extra costs occur, those are just some that I came across in the past couple of years. If you can cite specific examples of incidents from your previous projects, I would be more than happy to review how and why they happened. Apologies for going all over the place on this post, tried to cover as much bases as possible. I hope this helps, best of luck in your future endeavors.

@Kath Marie Good day and congrats, the pics look great. Did you remove any walls on the kitchen/dining room/living room level to get to that layout? Is this a Single Family or Townhouse?

Unfortunately, I don’t see the value in investing my hard worked for vacation in the hopes of an AirBnb host who is trying to “make it” in real estate. Examples from my personal life, flew into Vegas for a weekend with a reservation at Mandelay Bay, we arrived on time and they were overbooked. 5-10 minutes at the counter waiting for them to sort it out, we’re in a cab to Rio, got a diesel room and vouchers for two at their seafood buffet. I don’t see AirBnb able to respond that quickly or efficiently, I’ve sat on hold with them, just to get some questions answered regarding their policies and they took forever and gave me a massive runaround.

As a vacation rental owner, I can’t have my guests calling them to iron out issues, and AirBnb takes super long, and then can’t even explain it’s own policies to the owners or the guests.

I can’t be inconvenienced like that on a vacation I saved for and am looking forward to.

Can the owner make it up to me? How? By getting me to sign up for another vacation for them after they botched the first one? Lol... I’ll take Hilton and Marriott’s or any other resort management team over that, where they can actually benefit me down the road at one of their 1000’s of locations. If it’s a place where I do repeat vacations, like the Outer Banks, any issue that has ever risen, the good people at our “boots on the ground” real estate firm handle the issue promptly.

When everything goes smooth, life is easy, it’s how people respond when things go bad that shows character. And things go wrong everyday. Unfortunately, AirBnb still has a lot to prove in that arena.

They can start with their cancellation policy, vacation rental property owners, where people book months in advance, are expected to allow their guests to cancel one week in advance with no compensation??? Here’s a tip, offer travel insurance, charge accordingly, and pay out your owners upon each cancellation. The owners are the ones that allow AirBnb to be in business, right? Other wise what do they have, a reservation booking system for hotels(pretty sure that market is already heavily saturated).

@Nathan G. There is the issue with AirBnb, especially when using it for vacation purposes. You had a problem when you arrived, and where was AirBnb? You were left stranded, thank God you have the financial resources to find comparable lodging for you and your family. Imagine if it was in a vacation destination that was all booked up during the busy season.

@Nicholas Reyes Glad we could all help, solutions are out there, you need to find the one that best suits your needs. Best of luck.

@Nicholas Reyes Perhaps DM @Jay Hinrichs He mentioned he does loans like this, and the interest rate would come out to approx. 16%. Not the end of the world, considering you would complete your first deal, and still come out ahead. I’m not a lender, however I would check with some of the lenders here on BP, to find out if you qualify for a refi upon completion of construction and seasoning period based on your current credit score. Since you plan to take on a loan to complete this project, it will impact your current score. It is better to know now if you will even qualify for your exit strategy. One strong part of this equation is that you paid cash, so outside of insurance, property taxes and utilities your float costs are minimal. Is it possible you can piece meal this project together over an extended period of time? Even do the bulk of the work yourself in time away from your current job? You can save up cash, hire a demolition team. Save up more cash, hire the framer. Save up more cash, hire the HVAC team. Save up more cash, hire the plumber. Save up more cash, hire the electrician. Would a plan like that fit into your goal with this project?