All Forum Posts by: Jeff G.

@NA Jones 

Well, the first thing that you should look for is to check your zoning regulations. There are some areas near me that are full of multifamily homes, many previously converted from large single family homes, that are now simply zoned "MULTI." That is, you can only build a multifamily in that area and you can't convert a multifamily into a non-conforming structure e.g., a single family home.

So, before you do anything double check that!

I've never personally rehabbed a home that old, but I love old buildings. So, I know a fair bit about them because of my love for them. :)

Here are common issues that other people have run into:

• Check to see if local ordinance forbids changes to the building's facade. Also check with a local real estate attorney on this point too. Lots of times certain characteristics of buildings that old have legal protections. 
• In general, you'll probably want to tear most rooms down to the studs. Why? You'll see.
• Prior to electrification, do you know how people lit their homes at night? Candles? Nope, not really. They lighted rooms with gas lamps during the Victorian period. So, be prepared to remove many meany yards of pipe that have nothing to do with plumbing!
• There have been many revisions to the electrical code since the house was built. Chances are different parts are frozen in time at different periods of electrification. (I've known some homes that old to only have 110 coming in instead of 220.)
• Further, lots and lots of handy men over the years have been told to "just fix" many plumbing an electrical issues. So, in addition to ancient wiring you're likely to find "non-standard" wiring in more than a few places.
• So, please just take as a given that the entire house will need to be re-wired from the basement fuse panel through to every wing of the house.
• I don't know what the roof is made of but if you happen to have a ceramic tile roof don't get rid of it. Repairs are rare (they last about 100 years between major repairs) but expensive. Major repair of a tile roof is about $30,000.
• Keep the old wood frame windows if you can. Using modern windows in a house that old never works out well. It just isn't in keeping with the character of the house. Properly glazed and sealed wood frame windows are extremely efficient. If they've been taken out, please put period style replacements back in!
• I don't know how the house is heated but be prepared to replace the heater(s.) If it's heated with oil, be prepared to convert it to natural gas. Typical heating oil to natural gas conversions run about $5,000 - $6,000.
• If there is original woodwork, go out of your way to keep it. This may mean spending lots of hours with paint stripper and a putty knife but it's worth it! Don't paint it, stain it.
• Floors: chances are your floors are hardwood. If you see other flooring material, peel it back. You might find yet more flooring material. Keep peeling until you reach hardwood or find sub-floor. Chances are you'll find hardwood. Sand it down and stain it. If the floor has pet stains, handle it Nicole Curtis style and stain it dark and the dark spots will just look like a variation in the stain.
• Check the sub-floor. Lots of times old rags were used as insulation. Over the course of 100 years these have probably bio-degraded to useless pulp.
• If any of the bathrooms still have their original subway tile they're going to be thicker than modern subway tile. Also, they may be adhered to the wall with concrete, yes, really.
• In homes that old servants typically lived in the attic and the basement and you might find features that reflect this. For example you may find small dumb waiters (or shafts for them) in places that don't make sense.
• Also some stairways might seem oddly placed until you realize that these are the "back stairways" for the servants to use and move around while staying mostly out of the main house.
• Check the foundation and footings in the basement. They may or may not be in good condition after 100 years. This will probably be one of the first things you want to check.
• Walk-in wine cellars make wonderful upgrades to homes this old. I'm just saying. :)
• In any event be prepared for more code enforcement related issues than usual. In general, "once you've touched it you have to bring it up to code."
• If you don't want to convert the house to forced air heating there is a wonderful option for cooling a house this old: ductless air-conditioning.

That's all I can think of at the moment. I hope that helped. I want to rehab my own Victorian home in the next few years. I really think I have the soul for it.

Good luck with your renovation and conversion. Please update this thread with your progress. I'm sure the entire community would love to hear how things go!

@Sam Sav I agree with @James Wise deduct the cost of the railing, and any miscellaneous material you need such as screws any touch-up paint, etc. In many jurisdictions you can also deduct a fair amount for your time.

• Go to the hardware store and buy what you need. Keep your receipts. Take a photograph of them and send them to Evernote if you must.
• Write yourself a work order describing the work to be done. Take before and after photographs of the work with a smartphone. Document the time it took you to do the work with date(s) and time(s), rounding to 15 minute increments. If the job takes you 1 hour or less charge one hour as any handyman you'd call to do the work would also have a minimum 1 hour charge even if the job took 15 minutes.

If the total amount of hassle costs you less than $100 for time and materials, honestly I'd forget about it and chalk it up to the cost of doing business--no need to be petty.

Going forward what you might want to do is to create a "fact sheet" that you hand out to each new lessee detailing common damages and repairs and how much you'll charge the tenant on move-out if they don't fix it before they leave. Try to make it as simple as reading a menu. In my part of CT it's common to have these as a lease addendum. 

@Jimmy S. charge them for the refill. If it's more than 50% empty they owe you that.

Also, it's about $5,000 - $6,000 to replace an oil heater with a natural gas heater. Consider upgrading before the next tenant moves in. It will make the unit more attractive to tenants, many of whom don't want the hassle that comes with oil heat. As a bonus, you'll never have this hassle again.

@Luis Capriles  go Google "flat rate eviction attorney Massachusetts" and find one in your area. They tend to be less expensive and they're "fire and forget." You just provide them with basic paperwork and they handle the entire process for one low fee. In my area this costs about $500. Your area will be different but probably in that same ballpark.

This really is the least stressful way to get evict a tenant.

@Brian V. yes, network. There is a large REIA in Troy, MI not far from you. They meet on Square Lake Rd. You can check them out here: http://www.michiganrealestateinvestors.com/

Welcome to BP!

@Randy King if they're good tenants, have rented from you for more than a year, and you've have never had a problem paying on time you might consider extending the grace period. The tenant was courteous and called you as soon as she knew rent would be late. Which, lets be honest, is more than a lot of tenants would do.

@Steve Babiak is right, you're a business. But, you also have a soul. If I were in this situation I might approach the problem like this:

• Call the tenant back and ask, "I understand your situation and, I'm really sorry. That's terrible. IF I were to extend the grace period, how long do you think you'd need at most?" Just listen. If the number the tenant comes back with is acceptable to you send them a written notice that you've agreed to their terms as a one time extension. If not, by all means enforce the terms of the contract. In either case end the conversation with "I'll see what I can do."
• In the name of "going the extra mile." You might contact some local charities to see if they can offer some emergency assistance to your tenants. Don't spend all day on it of course. Even if you do end up enforcing the late fee or perusing eviction you've shown genuine compassion for the tenant--and they know it. If you decide to do this, I'd start with the local food bank in your area.
• If they don't pay by the 25th of the month, start the eviction process--period. Once they're two moths behind (in 5 more days) they're not likely to catch up and they'll be playing the same tune next month. Consider finding a local attorney who will do "flat rate" evictions in your area if you need to evict. They tend to be reasonable and it's much of a less headache for you.

In the above case you're getting a revised payment date from your tenants, so you're not letting them of the hook or being overly flexible. If it isn't going to work, you're still evicting them in a timely manner. That's still professional and you're not just rolling over for them.

I have to second @Michael Noto I hate parking issues. People get so upset about not being able to park it's not funny. I pass on all deals that don't have (or could be made to have) adequate parking.

Also, no board ups on the same block. They're magnets for trouble and insurance headaches. 

@Jon Adams consider a lost leader like "free 40 (or 50) inch TV" with a 14 month lease. In some areas this approach works well. You'll get a lot more calls and the extra two months on the lease will recover the cost of the TV. That's my two cents.

Let me know if you end up using this approach and how well it works for you.

So, back in the day before the (in my view wholly unnecessary) Dodd-Frank Safe Act it was common to perform a lease option as follows:

• Large "option payment" as a faux down-payment.
• Charge well above market rent
• Provide generous rent-credits based upon the performance of the tenant-buyer.
• Make the tenant-buyer pay for repairs below (say) $500.
• In the case of a Subject-To deal the prior owner might be contractually on the hook for repairs above $500.

I realize Dodd Fank changed much of that. I have a partial grasp of what has changed: within market rent only, capped option payments, rent credits are by decree now magically redefined as a security, etc.

My question is: having done some reading I've gotten the general impression that requiring the tenant-buyer to do repairs that traditionally fall to the landlord also violates the act. Is this understanding accurate?

I realize few of you are lawyers, and those that are aren't my lawyer, and so forth. Any clarification on this point is welcome.

@Chris Jones you don't have to be a millionaire to be a sophisticated investor. But, the annual income requirement is high. See this Wikipedia article for details. You don't need to be a sophisticated investor or an accredited one to get into multifamily real estate.

From 1-4 units its not really different than buying any other kind of house. Anything in excess of four units is generally considered commercial real estate.