All Forum Posts by: Tim Kersting

so as the title would indicate, I have not made a real estate investment as of yet. I guess I am still trying to figure out a strategy that is best suited for my current financial situation. Suffice to say I am getting a little antsy.

Be that as it may, I have had this idea rolling around in my brain for some weeks now so I thought I would float it out to the BP universe to see what other thoughts there might be.

I was thinking of possibly offering to buy my landlord's house.. the one that I currently live in...

Some of the reasons why I'm thinking this might be a good Prospect is that; house is in need of work. Has the landlord comma he tends not to have time to work on the house since he's quite busy running his landscaping business. Has a future investor I don't mind so much because I do many of the repairs and he reimburses me for them... Good practice... and I happen to know what I'm doing.

Obviously it's livable but pretty soon he's going to need to do some work. The driveway to be replaced  and the electrical is a little sketchy.

Also, the property is already setup to have a second unit... It used to have a studio apartment on the back of the garage with its own access. It just needs to be cleaned up and a couple of walls put back up and it would be ready to rent.

I did a title search. I found that he has enough equity  that  he would definitely turn a profit even below market value.

Comps in the area go for about 420 k... It appears he has about 200k in equity, with only the primary mortgage outstanding on the property.

Since I am personally a ways away from having any sort of substantial down payment, I'm thinking that he might be able to carry the loan?

So I guess my question, or questions, ...

Does this scenario seem like a project worthy of pursuit? If so how do I go about broaching the subject? I need to do a little more research on how he would carry the loan, but does that seem like it would make sense? Is there perhaps another strategy for tactic that would be better? What's the best way to make something like this a win-win?

At the end of the day, he may be completely emotionally attached to the property and this could all be moot, but at least it's a good brain exercise.

Whatever thoughts or suggestions or input is very much appreciated.

If youre not married to the wood and you want to start over, AND you have "soft spots"...I would rip it out.

That way you can put in what you want and it will go in right without affecting door gaps, cove base, and the like. But what more important, you can get to the bottom of the soft spots. It could be something as simple as missing nails, but it could also be serious like termite, or wood rot. 

Personally, I wouldn't go with a laminate. There are many beer options that provide various color and texture options that will bring more "pop" to the rooms. For what it's worth.

WOW!! Thank's guys! Lots of resources here. I can't thank you enough.

I've got to say, much of what was said seems logical and on par with my thinking. I genuinely appreciate the experience and suggestions.

@Lauren H.  & @Ronan M. Thanks for the very detailed layout, very reasonable approach. Thanks for taking the time. @Account Closed  thank you for the resources and the bay area experience.  Good advice on how I must have presented myself. Im going to learn and keep some of those responses on stand-by. I think you are dead on, I tend to be a nice guy with my clients. In my pool service business, I've learned how to distance myself due to being burned a few times...I guess I need to carry that same approach over to PM.

Again, thanks ALL for the advice. I have to say, I think I'm starting to buy into this whole BiggerPockets thing! What a resource and community.

So the quick version of this is:

My mom moved from the area (sf bay area to so-cal) and kept her house here. I am the "property manager" for the time being.

We did as much as we could to get the place rent ready in the month or so that we had after she moved, knowing there would be a few remaining items after the tenants took occupancy. 

Since the tenants moved in around March there have been a number of issues that to me are in the gray area of what should be required by a landlord/property manager.

Granted, this is good practice for when I eventually get a rental property of my own... So it's sort of on-the-job training, or an apprenticeship if you will.

Some of the requests are easily seen as necessary. Such has leaky shower handles, sink drains that don't drain and a downspout that was missing and causing a mess.

Here are some of the complaints that in my opinion are in the gray area of what is required. 

A bathroom vent fan that doesn't work, 

a vanity drawer with no pull out stop even though it wasn't designed with one. 

Removal of a garage shelving unit.(should be left on site?)

Replacing particle wood under the kitchen sink that the tenant claims is moldy... It's not mold it's just dingy. 

Put out traps for cockroaches, of which there were none before they moved in, and we saw no evidence of when putting out traps. 

Replace a leaky garden hose. 

Also, they broke the skylight lens when attempting to clean it... I believe they should at the very least split the cost with us.

So the point of all of this, is how do we determine what MUST be repaired or what request need to be answered, and what is just them wanting an upgrade, or them wanting an on-site maintenance person?

Currently, i too am a renter, but i feel i take ownership of the house that i live in and do a lot of this smaller stuff on my own after checking in with the landlord.

Is this a case of me needing to change my mindset? Or is the tenant being a little too demanding? I'm actually okay with going by the property to take care of certain minor things so I can keep an eye on the property, but some of these items seem like minor inconveniences that don't really need to be addressed right away. Mind you, most of these have already been addressed.

Thank you in advance for your thoughts.

As @Loren Whitney eluded to, Ozone is used in the pool and spa industry as a disinfectant. I have serviced them in my pool business.

As an air p urifier, I would be worried. Ozone is toxic. It's O3, where's oxegen is O2. Your messing with the respiratory system. If you do use it, make sure you flush the area with plenty of fresh air.

Check out this Link for more info.

 I installed this Laminate flooring over the top of pre-existing floor and it worked great. It's super easy to install and looks great. It comes in a whole variety of finishes.

Roll out some Underlayment to avoid any pattern transfer from  the existing floor and help with any floor creak and your set.

There's no point in pulling up the old tile unless you like to work hard and you want the potential of asbestos exposure.

@Matt Vogt Thanks for the reinforcement! I've actually built out a spreadsheet that shows all the info you suggest....so I'm glad I at least (on paper) doing something right! Thanks for the offer of assistance, its much appreciated. and yes, pools can be lucrative, my problem is that in the beginning I had no idea how to manage the business end of things, because i jump into everything head first...now that i know how to manage it, im having trouble  because i dont have the financial rescources to juggle it all. (thus the borrow from peter to pay paul reference)

@Trevor Ewen  Thank you as well, I'm glad I've at least done 75% of your checklist there.

-Rents low

-1 car note for the biz...other car is paid off

- don't have time for hobbies, so I've sold off most of them (drums...bummer)

- don't drink a lot, but I could probably cut back....don't smoke(wohoo!!)

- working on the overhead....I operate out of the house, so im about as cheap as i can get in that regard.

Its mainly paying for 10-12 years of bad personal credit management. Grew up low-mid income and didnt pay enough attention to parents training on how to use credit.

Thank you guys for the encouragement.

thanks all.

Like I said, it's kind of a borrow from Peter to pay Paul situation. I should have held the money to pay the taxes, but I was a bit to agresive  with the credit cards so I didn't have the money come tax time.

Oh, so the business is a swimming pool service/repair business. It's a decent business, wouldn't be so bad if I didn't have all this debt getting in my way. ;0P 

Any how...thanks again. 

hello all,

I'm looking for some advice.... Why else would I be starting such a threat... LOL.

Basically, as the subject line indicates, my business is not producing as much as it needs to financially. For the last five years or so our efforts to pay down debt have been mildly successful, but it seems as though we've been borrowing from Peter to pay Paul. We had what appeared to be a really good year for the business, but ended up not paying enough in quarterly taxes to the IRS... Fast forward to now... In addition to unsecured debt payments we now have a pretty substantial monthly payment going to the IRS.

As far as numbers go; we are looking at owing a sum of about $68,000 in total. This includes about 17,000 to the IRS, a loan for a truck for business with a balance of about $12,000 and the rest is mostly credit card debt. I do have a few thousand in IRA accounts and emergency savings. And I'm a renter...

I've been exploring some ways to jump start getting this stuff paid down. Because I am a sole proprietor with no employees I can only take on so much more work to MAKE more money, so that's not really an option here, or at least it has its limitations....me. I have looked into possibly selling off a piece of my business that isn't making as much as other parts. By my estimation I can sell a certain piece for about $18,000 which translates to about $11,500 after taxes. 

This seems to be a pretty promising idea, but here's where it gets a little tricky for me... where would be the best place to direct that sum of money? I already don't have the debt to income ratio to even think about real estate at this time... Let alone when I sell off that piece of my business my debt to income on paper will be even worse.

 Do I take do I take the approach of paying off the highest interest first? Or is it better to pay off total balances?

I know this isn't exactly a real estate question or concern... But eventually that is my goal to be able to pick up at least one multi-family property that I can house hack.

I got into business like many others ignorant of the ins and outs of taxes and accounting. I take full responsibility for the debt that I owe, and I'm working my very hardest to get it paid off... It just seems like there's something that I'm not seeing. Unfortunately, I can't afford to pay an accountant so the best I can do is reach out to smart people on BP and gather as much of a working knowledge as I work in harmony with my goals.

Any help, advise, or helpful suggestions are very much appreciated.

I just listened to his "webinar" last night. I was a little bit put off about how many times he felt he had to mention that he was a cancer survivor, as if that had anything to do with flipping homes. I mean don't get me wrong, I'm elated every time I hear someone has won that battle, its a win for humanity. Constantly mentioning it during this investment strategy webinar just seemed like he was using it as a sales gimmick.

In the end that's really all this particular webinar was. An attempt to get 30 people to buy into this system, which i'm sure has some level of success, for a low low price of $997. Im not saying it doesn't work, but when I smell sales gimmick I tend to back away.

I appreciate BP for always having an ethical and down to earth approachable atmosphere.