All Forum Posts by: Scott P.

Hi Courtney, @Joe Norman, @Frank Geiger, and @Patricia Steiner and @ Rich Bonisa have commented before me and all made good points - and so did you.  

It normally does not cost to have contractors walk and quote; however, in my area good contractors have enough work that they may be hesitant to spend time with someone who hasn't bought the property yet, especially if the Buyer hasn't done a remodel before.  

With that in mind, if I was in your position I'd do one of three approaches;

1. I'd look for a "connection."  Someone who knows a remodeler or contractor who would take his time to help you at this very early stage in your buying process and help you see what you're getting into and what it could roughly cost. I've done this approach.

2. I'd look on something like Angie's List (not sure if you have that in your area and my apologies to the Mods if i'm not supposed to mention a company name).  I'd pick one of the highly rated remodelers there but be warned that they will cost top dollar.  In my experience those types want to protect their reputation and not take advantage.  You could see the high cost of hiring one of these "A" rated contractors as an investment in your learning.  I've done this approach.

3. I'd start very small.  Buy something that is theoretically in pretty good shape.  Work your way into renovations slowly because you can run into huge unexpected costs.  I've done this also.

Also, be sure to get a reputation for paying all your bills on time.  It will help you with contractors as time goes by.

In my experience, building new is less expensive than a major remodel that removes all the drywall and includes new plumbing, wiring, and HVAC.  So, you might consider looking for a "brown field" lot where a house has been demolished for some reason and simply have a builder estimate new construction.  Estimating new construction is more precise than estimating remodeling.  You could get a firm, lump-sum price that a builder would stand behind and which a bank would more readily finance.

@Ty Primers My first answer may not have been complete.  I should have said also that there is a sense in which building a spec house on an already developed lot is as simple as having the lot surveyed, getting a set of house plans, then finding builders to quote the building of the house. (I don't know about KC MO but in my area there is no structural engineer, or registered Professional Engineer needed.) The City or County, whoever has jurisdiction, would not "approve" anything per se in my area but they their Building Dept would issue a Building Permit after you - or your builder - got approval from any HOA and maybe the Health Dept if a septic system is needed and maybe a county Highway Dept if a driveway permit is needed.

All of that takes place AFTER the "Developer" turns the land into buildable lots.  The exception to this is if you buy farmland and want to put single house on it and not necessarily an entire neighborhood.

I've done all this stuff.  Use the @Scott P feature and tell me a little more about what you'd like to do and I'll give you more info if i can.  I'm new here but i think that feature notifies me when my name is used. 

@Ty Primers, Personally I'd differentiate this way:  A investor would buy property already developed, such as an empty lot in a neighborhood, and then flip it to someone who would build on it.  

A Developer actually "develops" the property i.e. takes empty forest or farmland and brings water, sewer, electricity, natural gas, etc. to the property and puts in streets and subdivides it into lots.  There are a lot of variations on what a Developer does but this is how I would answer your question.

@Andrew Wright I actually rent from with this arrangement, not rent to.  (Yes I know...why not buy a rental in the town where your child goes to college and rent "to" instead of rent "from."  Long story...)    Let me see if i can get the exact numbers to you this weekend...I think if i put your name in post you'll get an alert and see the answer.

I'm sorry to hear this.

If you're lawyer isn't costing anything, or is being paid by the late fee, I'd probably agree with him that as long as you're getting rent it's not so bad.  

I'd talk w/tenant and try to understand the situation.  Maybe some good idea would come to my mind.  

This tenant is already in and there's a cost to preparing for the next one.  So I'd see if I could make it work for this one as long as possible - but I understand he's wearing on your patience.

With that said, I would assume that this tenant will eventually fail. In my area he'd end up getting a month or 2 of free rent if I had to evict and he stopped paying. So, I'd stay on good terms with him to avoid other costs/damages.  I'd accept the fact that I'll probably be cleaning and painting again soon...

Put down enough to avoid PMI. (I'm not sure if PMI is even an option on a 4Plex.)

I think that except for once, I always put down the minimum but enough so that the lender didn't escrow property tax and insurance.  That may not be possible now-a-days if your loan is being sold a a GSE.  

You can always make extra payments if you'd like to build equity in a particular property sooner.

Good luck!

Anecdotally, I believe most landlords use flat because it costs the least.  I use eggshell for the reasons @JD Martin gave.  Eggshell, sometimes called Satin, works best for me for durability and low maint.  I'm steadily transitioning to a SW gray w/bright white trim.  I use semi-gloss for the trim. I think it's Repose Gray like @Asury Johnson noted but i'm away from my laptop that has that info. So i can't be sure.

In my dreams every rental has the same paint for interior and exterior trim, etc. but that's not the world I live in.  I've even had stained trim as well as that pre-finished plastic looking trim.  If you can use the same products over and over, updating rarely as styles change, your life will be easier in my opinion.

Congrats!  My start was also a buy and hold duplex many years ago.  It's likely that before you know it, days will have turned into weeks, and weeks will have turned into months, and months will have turned into years and the tenants will have paid off your mortgage in exchange for a nice place to live and you, not NBKC, will own the asset.  :-)

Other folks are giving sound advice.  I want to congratulate you on those degrees.  Consider seeking a 9-5 with a commercial mechanical HVAC design firm or contractor.  Or, consider using the Mech degree or Architectural degree to find a 9-5 with a General Commerical Contractor or Architect/Engineer firm.  Your degrees are valuable.  Jobs in industry will enable your to build money capital, help you learn about commercial loans, land, property and builders, and make contacts with the types of people some of the other folks are suggesting you study under.

You won't learn much about Landlording in those 9-5s but you'll learn about that on biggerpockets....

I haven't used Investor's $.  I can tell you that a track record starting small and working up will help you w/Commercial Loan officers.  There's a lot you can do without going commercial but I feel like you don't want to start residential.

Good luck!

@Caleb Heimsoth makes a good point. Kyle, I don't know your situation and can't give you advice but I can give you the information that i started without a LLC. There are pros and cons to being a Sole Proprietor or having a LLC or a SubS or whatever. Liability insurance was always my first line of defense. YMMV.

As far as doing this w/a full-time W2 gig, my last new build was about 6000 SF heated living area w/a 3.5 car garage and is my current SFR. I drew the house plans, pulled my permits, and sub'd everything out except for some low voltage wiring and a couple of minor things i did myself. I jokingly tell people that there were no liens and no lawsuits - and every sub got paid in full (which is all true). I did it while working well over 40 hours/week at my 9-5. the point is that it can be done. There are ways to find subs and things to say and not say to help it all work out....
 

Obviously that wasn't my first "rodeo" though.

The key is to start in a controlled way if you're of the mindset to start small and work your way up.  Look for a 9-5 that will help you gain knowledge for real estate investing and use that 9-5 to build capital.  And remember...pay all your bills on time.