All Forum Posts by: Chuck B.

@Joel - Thanks for the input!

>>>I think FSBO really isn't going to get you a higher price.The agent bringing a buyer will now have to do 2 jobs with the buyer and the seller for one fee.

My thinking on FISBO is that I could offer a substantially lower cost, partially due to agent commissions and mostly due to the fact that I could simultaneously drop off my wiggle room at the same time.

I have 20K in "haggle" built into the price today (no one is haggling, ha!). The agent has another 20K in commission (today). Maybe I could drop my haggle room off, drop off another 10K for agent's commission and be able to reduce the price 30K to get what I'm hoping for today. Or drop the price 40K and get just 10K less than I'm hoping for.

I don't know if 359K versus 399K would move the needle in regards to interested buyers, but it's already the lowest-cost-per-sq-foot listings in the area (for anything 2000+ sq ft), so maybe it would make a difference, and maybe not. It seems like a substantial price reduction, but the numbers are large'ish to begin with.

Best,
- C

In Louisville, KY, it appears to me that the higher-end homes (200K+) have leveled off (still selling at a discount) and the lower end homes are now increasing in ask and sales price.

Inventory on good looking fixer uppers is not so hot... lot of dogs on the MLS, but not many that look like good opportunities.

PS. The agent called me yesterday and wanted to discuss putting me on a lease as well as extending the lease on the upstairs tenant. He thinks that if we could show a fully leased building with a 1-yr lease at 3K a month he could sell it to an investor who would be happy with a 7.5% CAP rate (a rate I wouldn't be happy with).

I'm wondering now if I shouldn't have jumped at the 4K a month commercial lease, rented something for us and prayed it all worked out (and sold). Hmmm...

Best,
- C

@Dan - I have been looking in the area south of Davies. I hear rumor that one of those big brown-fields is about to be developed. If I could confirm that I'd be a lot more interested in the area I think. I've been spending some time in Newburg and around Dixie, north of 264 lately too.

Sec-8 would probably pay you more than you're getting today, but you have to do a lot of due diligence on the applicants to get a trouble-free tenant. I guess that's always true...

I spent some time last night looking at what was available for sale and the conclusion I came to was that the types of houses/deals I had been getting the past couple of years seem a LOT harder to find today. I don't know if that's due to the market leveling out or other investors sucking all the air out of the room, but it actually made me contemplate listing the properties for a flip, but I really want to build a portfolio, not become a rehabber, so I have to fight that urge.

I sent you my email via private message here on BP.

~~~

@Brian - I didn't even consider a HELOC because I had heard (maybe a long time ago) that they weren't even available any longer. I might have to look into it.

I had two offers to lease my current house commercially (it's zoned for offices, SF or MF) at 3,000 and at another time at 4,000. It was extremely tempting, but the age and historical details on this place made me too leery to consider it. That and without a large chunk of up-front money it could put me in a tough position if something went wrong. It's not what I would consider a "hardened" building for rental and I do have some emotions tied up in the old girl.

My current mortage, taxes and insurance is $1,450 with 155K left on the note (or thereabouts). Utilities are $290 a month for the entire building (it's all metered together. Getting the utilities in-line was a challenge, but we did a lot of work on tightening the place up, installing high-efficiency HVACs (one per floor), etc.

RE: Equity - I have 20K haggle built into that price and the realtor's commission is about another 20K. My thinking now is that if we can't move it at 380K before the agent's contract expires (June 1), I might try to FISBO the thing at 40K less. It would give me the exact same money I'm looking for today, but at a much more attractive price to the buyer.

~~~

To everyone noting how bad the original pictures were, and how cluttered the house was, thank you! We took that to heart, de-cluttered a lot (though more should be done) and had new pictures taken. The link hopefully now shows much better: http://www.whizbang.net/eastbroadway

RE: How much work I do - I'm mainly the light handyman and grunt worker. I help with demo, paint a lot, do small repairs, cleaning, etc. I can refinish a floor and install a chain link fence as well, but I'm slow and it's hard work (the way I do it, ha!). I do not use big renovation companies, but rather, rely on individual contractors who I've established a relationship with over the years. The cost difference can be staggering, but the usual landmines and caveats apply.

Best,
- C

@GeorgeP - Gotcha, now I see.

@Dick - In our city you have to have a fan or a working window and in new renovations I believe a fan is now required.

@GeorgeP - Gotcha... but I'm still curious why you don't wire this to the bathroom light? It seems like a timer would make the fan last longer, but I just wonder if it's worth the extra trouble for wiring?

Best,
- C

@GeorgeP - Is the timer so that the fan has a longer life?

@Kyle - You're correct, and this is possibly a bad practice on my part. I DO leave the rear un-caulked so that a leak will show up sooner, theoretically.

@EdO - I love it... I will plan on doing that for the next vanity.

@Chris Weller - No doubt! Scoping out the tenant is the best indicator of what's to follow. I always do drive-bys to see how their place looks, and pop-ins to see the interior if at all possible.

Best,
- Chuck

Oh, and regarding appliances in general... I hate having to supply and maintain them. I charge a much higher security deposit if we have to supply appliances, and encourage folks to take the lower security deposit and get their own. This seems to work OK for houses, though I'm not sure it would work for apartments as you usually expect to see them included in those.

Best,
- C

@Joey - I remove carpet when it's life is over and replace with linoleum, tile or hardwood. Or if I'm lucky, there's hardwood underneath that can just be refinished. You can do it yourself if you have the time. As for fans, if they're working, I leave them, when they stop working, it gets a simple light fixture. I also spend the extra money to put in CFL bulbs everywhere, because I don't like people messing with the light fixtures if possible.

@Ed - Great ideas! I couldn't agree more on the ice makers. I'll remove them from a fridge before putting a new fridge into a location. I don't know what Schedule 40 drains or WYE cleanouts are, but I'll look into those ideas. Thanks.

@Vanessa - I cage ours, costs $200 apiece, and then I bolt the cages into the wall where the bolts have to be removed from the inside of the house. I also lock the circuit breaker box and then I put "air conditioner alarm stickers" on everything outside. You can find them on Amazon.com. If placing new ones, you might consider putting them on a roof if possible... Don't leave them shrouded by bushes or back in a corner with bad visibility. Make them very visible and harden them up. Make it harder or more risky than the next house and they'll choose the next house over yours, or so we all hope. Ha!

Best,
- C

@Peter Seely - I have three section 8 rentals and I like all three of my tenants. I've only had two small repairs between the three of them over 18 months, so nothing really to complain about. it wasn't intentional on their part either.

with that said though, I do a LOT of screening on these folks. Not for credit, because they don't have any, but for criminal activity and damage done to previous rentals. I don't allow pets or smoking. I charge a security deposit that is much higher if they won't provide their own appliances too (don't provide appliances!). I also do "pop ins" at their current residence. If I don't like what I see, I don't rent to them. I ask their current neighbors about them if they are around. It's a lot of due diligence, but in return, I get ABOVE market rate rents and tenants that will frequently be there for years. And rents are always direct deposited on time.

There are good people in "the system" who do need and deserve the help. Some of them work full time or more, but you cant support yourself and kids on minimum wage. Unfortunately, they're the minority so you have to do your homework and be patient. It's also worth keeping in mind that, at least in Louisville, they have a lot of rentals to choose from. They won't pick a bombed out place when someone two streets over is offering a nice home.

Good luck,
- Chuck