All Forum Posts by: Shawn Thom

i was in the insurance biz long ago.  At the time, insurance would give a slight discount for IR roofing.  It was no where near the cost premium of IR though.  the kicker was that your roof could still get hail damage and it might not cause a material defect in the shingle so insurance would not pay to replace it.  For example, you could have a metal roof, if it gets dented its still OK and will not leak.  It may look bad but insurance wouldn't cover it for replacement.  Things could have changed since then and every state is different.

In reality hail damage to your roof isn't necessarily a bad thing.  the way I look at it, in Texas a 30 year roof won't last 30 years even without hail due to the heat and the sun cooking it all summer long.  So I assume that some where within a 15 year period I'm going to get some hail damage and the insurance will by me a new roof.  Just make sure you are checking on your roof from time to time, not letting tree branches rub on your roof causing damage, check on the roof jacks to make sure the seals haven't broken and you should be good to go.  Also, make sure they use a good barrier on all of your valleys in your roof.  

I'd go with architectural shingle.  They work way better and seem thicker although I've never measured.

 I agree with Marian.  How do you know if its hair.  cracked or collapsing pipes can cause items that would normally drain to get stuck.  Example, roots breaking through a line can cause stuff to clog.  if this resident has been pretty problem free, I'd clean it without issue.  Once a year, I've had the same tenant call with a clogged washer drain.  its an old house and things like this pop up.  They pay on time every month, never have unreasonable repair requests and they keep the place super clean.  I can handle a $100 plumbing bill and not think twice about it.

My first deal was a flip I purchased somewhere around 63k and I put something like 18k into it. I sold it around 115k. The exact details are a little fuzzy at this point.

I don't know what houses go for around you, but my advice is don't start on a really small deal. Since there is less profit that is less margin for you to mess up and not end up loosing money. On my deal, I was an AC and a roof away from not being very profitable. Unless you are really confident on your ability to find problems and estimate repair costs, I'd aim a little higher so you can absorb the unexpected without making your first deal a loss. Also make sure you first one is a home run deal and not a marginal deal. Again, you need a good cushion to make mistakes and learn the hard way. Most of us have had to learn that way.

As for flip or rental... I love the rehab of flips because we finish them out better.....but I hate the sales process, the back and forth negotiation..waiting on pins and needles for inspections and for it to close.  I prefer cash flow over one time checks too.

I have done it twice where I bought a house using interim construction type loans (hard money) and then refi'd them into conventional 30 year loans.  Both were purchased in my personal name and refi'd into a conventional loan in my personal name.  

I used the interim financing for the purchase and rehab and then refi'd for 80% loan to value into conventional financing.

Make sure you understand all the restriction of your long term financing.  Loan to value amounts, minimum loan amounts etc etc.

If you are doing rehabs in Texas you better get used to foundation issues.  I'd say on a newer home, I'd be concerned.  Anything over 10-15 years, less of an issue.   I've only rehabbed 1 home that didn't have foundation issues.  I'm rehabbing a 1996 build and it has foundations issues, 1965 house had issues, a few 1950s houses....issues.   Pier and beam....slab foundation, in Texas they all have issues!  In your budget, assume you have to foundation repairs, and will have to repair a few sewer lines due to foundation repair.

Here are the things that will help you.  Get a lifetime warranty that is transferable.  Look for a company that will include an egineering report, even if its at an extra cost.  If it cost money to transfer the warranty, pay it when you sell.  Get a licensed plumber to do checks after repairs are done to make sure there are no issues with plumbing.    Get a written plumbing report with a license number shown on report to show buyer. On your disclosure, put the details and put that it has a lifetime warranty.  Unless your buyer is looking for a brand new house, your rehabbed house won't be the first one they are considering with foundation issues.  In Texas, its not if....its when you have foundation issues.........so depending on age, everything your buyer is looking at will have foundation issues.

@Brandon Turner , My locket has your picture in it.  Can i still bring it?

I've used the same GC on my past few projects.  He used to laugh at me because my agreement was so long.  We'd have a quarrel about something, and I ask what does the SOW state?  that usually ended the quarrel.

Be very specific.  If you have a particular faucet you want, put the SKU.  The biggest thing I learned (the hard way), if you want something kept, like the existing tile tub enclosure, put that in there.  That was about a $1000 mistake.  Here is what I put in for a hallbath.  I have a parts list & color list separately.  I am not saying mine is anything magical and i am sure it can be improved upon.

Hall Bath

Remove existing flooring and replace with tile & grout to be chosen by company

Removed existing wall tiles around tub, repair/replace any moisture resistant wall board, retile walls with design and tile chosen by company.

Paint and prime cabinets inside and out

Replace cabinet hardware

Replace existing vanity tops and replace with granite top, new sink and sink fixtures

Replumb sink & sink fixture supply lines and drains if necessary

Install new door hardware

Install new door

Install new toilet and toilet seat

Refinish (not just spray) existing tub to white

Retain existing wall mirror

Replace existing ceiling light and exhaust fan. Tie exhaust fan into existing exhaust vents

Replace light switches and switch covers

Replace electrical plugs and plug covers

Look in the fileplace under contracts.  Towards the end is JScott's Independent Contractor agreements.  that is what I use and I modify as I learn to add something new.

i used to sell insurance.  I never saw a texas policy that was higher for a rental policy than a home owners policy.....although it has been almost a decade since I had that job.

I have a tx home owner's policy and rental policies and the rentals are all cheaper.

Do you still have your own home owner policy with USAA? or do you have just a rent house? Are they in the same name ie, your personal name vs an LLC name?

Definitely price around.  You can probably do better.

I agree on the clean windows!  I like to do a good cleaning on the house..and make sure it stay clean.  Nothing screams YIKES like walking in to a house and finding dead roaches on the floor.

Also I like to refinish the tubs if I'm not replacing them.  Make them look crispy white!

Just remember, one good piece of advice from an accountant or attorney can easily save you thousands of dollars.  I learned this the hard way.