All Forum Posts by: Tom W.

@Nick Brubaker

To expand on what I said earlier about making profit when you buy, I'll try to give an example using the numbers you have given.

If I was looking at buying a distressed property in your neighborhood and found that comparable homes in the area were selling for $739,000.00 then your home could be a possible bargain if it was selling for $285,000.00. If my total cost of renovation was $75,000.00 and it brought your property up to a comparable level of the higher priced homes, I would stand to make a nice profit. 

If, however, that $739,000.00 home is new construction, has 6 bedrooms, 4 bathrooms and a 3 car garage, while yours is 2 bedrooms, 1 bath and a garage converted into an apartment, there will be no comparison. $75,000.00 won't come close to making your home equal to the other so I would not be able to expect a sales price anywhere near that. 

When I find a property that I am interested in for a flip, the first thing I look at are sales of comparable properties in the same neighborhood within the last 6 months. Comparable means close to the same square footage, number of bedrooms and bathrooms, garages, etc. Then I take an average of what those homes sold for. This is the number I use as the target that I will sell my property for when its complete. Once I have that number, I deduct 30%. This covers my closing and holding costs as well as my expected profit. From that number I deduct my anticipated cost of repairs. That final number is the absolute maximum that I can pay for that property. That is why I said that you make your money when you buy, not when you sell. If you pay too much, there is very little that can be done to recover the cost. 

The properties that I buy are not the move in ready type that you may have in mind when thinking about buying properties. I buy bank foreclosures that are usually in pretty bad shape. They are definitely the worst house in the neighborhood when I start. If I can buy them at the right price, and stick to my budget, I can make a profit every time. 

@Nick Brubaker You’re not taking into account the fact that you need to purchase a distressed property at below market value when you flip. Your profit will be made when you purchase, not when you sell. The amount you invest in repairs or upgrades will be based on what the value of the property will be after the work is complete.

Alex V. I would personally never take possession of a property with an underground storage tank. The potential liability could run into the hundreds of thousands depending on the extent of contamination. I would suggest first trying to get the seller to have the tank removed. If they refuse that then the next step would be offering to pay for removal yourself, prior to closing, with the contingency that you can walk from the deal if contamination is found. It may cost you a couple thousand dollars if you have to walk but that is peanuts compared to the possibilities.

@Ned Micic In my experience, lenders will not finance the property if there is an underground storage tank on the property. Soil testing with the tank still in place will not produce 100% accurate results that there is no contamination. Soil samples cannot be taken from below the the tank unless it is removed. If the seller will not allow you to remove the tank, at your expense, prior to closing then this is a deal that you should probably walk away from. Your liability could potentially run into hundreds of thousands if contamination is found after you take possession.

@Oliver Santiago

In slab, HVAC duct systems are fairly rare but they do exist. I have only had experience with one that filled with water over the last 40 or so years that I have been in the business. Unfortunately, the fix is not easy or cheap. Outside of the chance that someone filled the duct system, either intentionally or by mistake, with water, the only explanation is a high ground water table that has allowed the water to leak in. If it has done this once, it will continue to do it every time the ground becomes saturated. This being the case it means you now have a very real possibility of mold growth in the duct system.

The only real fix, that I know of, is to abandon the under slab duct system. The vents would need to be sealed with concrete to prevent water and mold infiltration into the house. A new HVAC duct system could possibly be installed overhead in the attic if the house allows that possibility. If not other alternative means would need to be considered.

Ben Gammon You need to have EPA certification in order to purchase, install or service any type of HVAC equipment containing ozone depleting refrigerants. This has nothing to do will local code requirements. Local codes will typically require you to pull building, electrical and plumbing permits to install any type of HVAC equipment.

Max Tanenbaum If the ducts are located within a conditioned space, even if they are enclosed in a soffit, they should not be sweating. It sounds as though you are either, A) not conditioning that space (in which case the ducts will need to be insulated) or, B) there is excessive infiltration of unconditioned air getting into the soffit. In the latter case you would need to plug up or insulate the cause of the excessive infiltration.

@Charlie MacPherson

I don't know of any real way to determine cost to install per BTU. There are way too many variables to make a simplified estimate that way.

Most people in the northeast part of the country are using either gas or oil fired systems for heating because, as a general rule, they produce better results at lower operating costs than the alternatives. (In my opinion, if you do decide to go with electric baseboard, you will probably have a very tough time selling your flip because the cost to operate will turn most prospective buyers away.) In my experience, given a choice, the majority of prospective buyers would prefer a gas-fired heating system over an oil-fired system. 

Forced warm air systems will allow the option of installing central air conditioning at the same time or at a later date. Hot water heating systems will provide a more consistent even heat throughout the home than forced warm air but will make it necessary to add a completely separate system if central air is added. 

I think the question that needs to be asked is, what type of a product do you want to present to the market when you sell this flip? If you're selling a down and dirty starter home you will need to make decisions on HVAC much differently than if you are selling a higher end home. 

@Steve S.

Having one room colder than another when using a forced air system is not an unusual problem but it can sometimes be difficult to determine the reason or to provide a good solution. Typically there are two scenarios with cold rooms and forced air heat. 1) One room never gets enough air to heat it (or cool it in the summer) and so is always a different temperature or 2) One room warms up (or cools down) the same as the other rooms but once the system shuts off, changes temperature more quickly than the others.

The solution to #2 is the most difficult to fix because it is usually a symptom of building construction rather than HVAC system issues. A room with poor insulation or three exterior walls or a lot of glass will change temperature more rapidly when the HVAC unit shuts off than an interior room surrounded by other conditioned spaces. This can be a tough one to fix and usually includes adding zoning to the HVAC system or reinsulating the space or a combination of the two.

Problem #1 can possibly be solved in one of two ways. The first is to adjust the balancing dampers that should be installed in each branch duct that connects to each supply register. By slightly closing down the dampers in the rooms that are heating the fastest you can force more air to the room that is struggling. With a little trial and error, if the ducts have been sized correctly, you should be able to get each room to heat evenly. If the ducts have not been sized correctly to the room you are having trouble with then the second solution is to do as your HVAC company has advised. Install an additional or larger duct to feed that room and deliver the necessary amount of air to condition it properly.

Brian Karlow Adding antifreeze to your heating system is definitely something you could do to help prevent a freezing problem. A word of caution, you cannot use standard antifreeze like you use in your car. You will need a special type that is "potable" and specifically made for heating systems. This is necessary to prevent poisoning of the domestic water system in the event something goes wrong and the heating system backs up into the drinking water. Heating output may be reduced slightly but usually the amount is insignificant. The single greatest thing you can do to prevent freezing is stop the drafts. Frozen heat pipes are usually caused in a spot where cold air finds a way in and blows directly on the pipe. Once an ice block starts at that point, the water stops flowing then the entire line freezes up.