Just picked up a nice 110k home for 28k!

[FUEGO]

House isn't very pretty, but on the plus side, the dishwasher comes pre-loaded with dirty dishes!

J/k - looks like a sweet, profitable house. Best of luck!

 

[cashflo2u2]

Congrats. I hope this works out for you. Do you have any mold issues? Would be great if you reported back to this board after the rehab is complete and you got a tenant!

 

[Rich_by_the_Bay]

So how do you handle your liability issues? LLC? Lots of insurance? Both?

If you do the work yourself, isn't it true that an LLC (or any other legal structure) won't protect you financially?

Just curious what small landlords do in that regard.

 

[Martha]

So how do you handle your liability issues? LLC? Lots of insurance? Both?

If you do the work yourself, isn't it true that an LLC (or any other legal structure) won't protect you financially?

Just curious what small landlords do in that regard.

Put each building in a different LLC so if something bad happens at one building, the others aren't at risk. Good insurance. And yes, you are personally liable for your own acts so be good and be careful. No sexual harassment of tenants!

 

[thefed]

Calmoki: not sure about the round thing...haven't noticed it. A lot of these metal roofs in our area are coated with a paint the color of those red clay roofs... hopefully that's what you saw? i cant actually see the roof as it is covered in snow...and dont have google earth installed any longer

rec7: Asking price was 29k, It's a HUD home. Goto hud.gov to find the company in your state that does listings and pm me if you have any questions from there. good luck

honobob: I dont think sidewalks will come any time soon...thinking about the entire west side, there really aren't any at all.

cashflo2u2: Yes there is mold. I do mold remediation so it's not a big deal. in a few of the pics you can see the affected areas. All that drywall will be removed, the basement waterproofed, then it will be re-finished. i'll certainly update everyone as things progess.

Rich In Tampa: This property will be held in an LLC. My mold business is also in it's own LLC with my home repair business. My duct cleaning business is its own LLC as well. As is my landscaping business. I will be doing home repairs and mold remediation, and my insurance for each company specifically covers me for those things...so I think that's as protected as i can get. Of course, i have insurance policies covering me in each, an umbrella, E&O insurance, gen liability, fire+vandalism for the property, AND a separate rehabbing policy

 

[Martha]

Sue- it's on the west side of barbertucky...errr... i mean barberton. For someone who has alway been biased against barberton, its a really decent neighborhood


For all of you wondering what you get for 28k, below are some pics. it's no mcmansion, but it'll rent for 675 easily. Needs a lot of paint, carpet, and a waterproofed basement....a few doors....and thats it. Garage is HUGE at 30x26...needs paint or siding depending on budget

1202 Noble pictures by thefed17 - Photobucket - Address has been changed to protect the guiltyl

sorry a lot are sideways...i forgot to flip em before transferring

Looks solid. How are you going to waterproof the basement? Draintile?

 

[tryan]

So how do you handle your liability issues? LLC? Lots of insurance? Both?

I use a commercial liability policy that covers the first 100k losses for roughly $200/property/year. Idea being, the lawyers will be "covered" if I run into a jam. Hasn't been an issue ... yet. Bet if you have lot of claims it becomes cost prohibitive thou.

Lot's of people are doing what Martha said (LLC/property). I use an S corp for the free n'clear property. Accountant tells me LLC is the way to go to limit annual filing fees.

 

[thefed]

Looks solid. How are you going to waterproof the basement? Draintile?

i usually attack these things from 2 sides. First, i dig around the perimeter of the home, about 1ft deep and 4 ft wide...use a rototiller. I then tar very very thick (18 mil) tarps to the foundation and slope it down and away from the house....then cover it all back up with dirt, and use mulch to make the grade right. This helps divert the majority of rain water away from the foundation. Sure, some finds its way back to the home...but not a lot.

then, i do the interior water diversion method (i hate when people call it water proofing). Jackhammer up a trench 8"wide and 8-10" deep around inside perimeter of basement. Run FRP (fiberglass reinforced paneling) down each wall (visqueen behind it) into the trench. Fill with a little gravel, perforated 4" pipe, and more gravel, ensuring the pipe is sloped toward a common location. At common location, dig hole for a sump to tie everything into. Use 1/2" styrofoam on top of gavel to ensure concrete doesnt penetrate gavel.....pour concrete and level to exisiting floor. Run discharge pipe from sump outside and tie into storm sewer.

total cost for 120 linear foot basement is approx $1000 vs. $4k for someone else to do it

 

[thefed]

OMG! Google earth sure does show some rust on that roof. im not sure about whatevers behind the garage...it doesnt appear to be there any more?? maybe they replaced the roof when they cleaned up the back? lol

 

[laurence]

Good luck! Not much knowledge on the structural work here, but I can tell you a quick easy upgrade (when you get to it) that seems to really bring up the appeal is new faucets in the kitchen and baths. For about $100-150 a sink, you totally change the look and bring it up to date. I would probably look at replacing that kitchen counter with silestone or something mid-grade like that to bring it up to date as well. No chance of hardwood under that carpet? A friend bought an old house with crappy carpet, went to replace it and found a solid wood floor. Refinished it (it was in bad shape) and it looks fantastic.

 

[samclem]

. . . Run FRP (fiberglass reinforced paneling) down each wall (visqueen behind it) into the trench.

Have you tried using Platon in place of the FRP? If you are going to finish the basement, it might be a good approach. It is very thick plastic, dimpled so it will stand away from the wall and any water gettiing in can easily get to the drain tile you've installed. I'd put 1" to 2" of EPS over it, 1x2 furring strips over that, then drywall on the inside (the kind without any paper in it). The Platon costs approx 30 cents per sq ft, probably less expensive than the FRP. They stock it at Menards.

This might be more than you want to do to this house, but the walls would be dry and warm.

 

[thefed]

Have you tried using Platon in place of the FRP? If you are going to finish the basement, it might be a good approach. It is very thick plastic, dimpled so it will stand away from the wall and any water gettiing in can easily get to the drain tile you've installed. I'd put 1" to 2" of EPS over it, 1x2 furring strips over that, then drywall on the inside (the kind without any paper in it). The Platon costs approx 30 cents per sq ft, probably less expensive than the FRP. They stock it at Menards.

This might be more than you want to do to this house, but the walls would be dry and warm.

It seems I live in a state where NOBODY is a supplier...so I'll call some distributors in neighboring states to find out about shipping

thanks for the link though....seems interesting.

 

[thefed]

samclem: how ironic! I have never seen and barely ever heard of a menard's before...and i got a thing in the mail today announcing a grand opening 30 miles away. sounds like a store i might like! is it similar to home depot/lowes? How do the prices compare?

 

[mattgg1]

thefed -

I have a few questions about your proposed cost to rehab this house. You said the house "needs $5K of work" and you will supply the labor, so I assume the entire $5,000 will go towards materials. That seems to be a very optimistic budget, based on the condition of the house and your comments.

Would you mind giving us a rough estimate on how you will be spending that $5K? How are you able to buget so little on materials for this rehab?

- Your stated cost for interior/exterior "water diversion" is $1000, which leaves only $4,000 for the rest of the house.
- As you said, all of the basement-level drywall/finishings will need to be removed and the basement refinished.
- All of the flooring, walls, and railings upstairs will need to be replaced/redone.
- At least a partial rehab is required for the kitchen & bathrooms, although a full tear-out seems more likely.
- Additional money will have to be spent on appliances, windows, doors, landscaping, HVAC, ect.

This will be a rental and I realize you won't be selecting high-end materials, but I am very interested in how you plan to rehab this entire house for only $5,000.

 

[samclem]

samclem: how ironic! I have never seen and barely ever heard of a menard's before...and i got a thing in the mail today announcing a grand opening 30 miles away. sounds like a store i might like! is it similar to home depot/lowes? How do the prices compare?

I like Menards a lot. I'd never been in one until they built a new store about 30 minutes from us last year. The store is much larger than any HD or Lowes I've seen. Prices are about the same, but they carry many types of items and a lot of brands that Lowes and HD do not. Their sale pages that come in our Sunday paper usually have a thing or two that make it worth the drive out there for us. BTW, the prices intheir sale pages are good for two weeks, and you'l proably get a new one every week, so hang on to the circular and bundle your trips.

 

[Martha]

Given the wood floors in many of the rooms, odds are they are everywhere but the kitchen. If he refinishes himself, will be very inexpensive. Install new railing. New vinyl floor in kitchen and bathroom, again, not too expensive if he installs himself. The kitchen cabinets look good. Maybe he needs a new countertop. The bathrooms need serious cleaning and new caulking. Generally, the upper level looks good but seriously filthy. Sometimes it is hard to see under filth.

The lower level is only "half" basement, so only the lower parts of the walls need to be replaced and the flooring redone.

If he is tight with his budget, I bet he can do it on $5000.

 

[thefed]

I'm coming in around 6k and dont have my spreadsheet on this PC, but here's the rundown off the cuff


1000 waterproof basement
1700 - Flooring (laminate wood floors in most areas but bedrooms, berber there)
150- Fix broken window panes-most are new vinyl
500- paint
100- joint compound
200- furring strips, drywall, hardware to replace lower level of drywall in basement
150- kitchen counter top (cabinets are in perfect shape, might paint them)
200- railing
150- pilot repair on furnace
300- budgeted for h20 replacement
500- budgeted for misc repairs
150- light fixtures in kitchen, baths, etc
20- caulk for bathrooms...all else is perfect...needs cleaned and vanities painted
300- 3 new prehung interior doors+2 bifolds+ door knobs
175- 6 tons gravel for driveway
100- 5 yards mulch


I might be missing a few things, but I think that covers most of it....that above is about 5500 or so?

 

[thefed]

if you think this it crazy, check out my other album titled delos for a real dump i rehabbed for 7k, then put 3k into this year in siding for looks

 

[mattgg1]

I'm coming in around 6k and dont have my spreadsheet on this PC, but here's the rundown off the cuff

Thanks for the description of your rehab costs. When you calculate your expenses for these rehabs, do you give yourself a range, so that you can use the high-end for a worst-case scenario?

The reason I ask is because your costs have already gone up by 20% from your original $5,000 estimate. You're already added an extra $1000 before starting any work, so it is likely that the cost will continue to move higher by the time you finish the renovation.

20- caulk for bathrooms...all else is perfect...needs cleaned and vanities painted

Your prospective tenants must have very low standards if you think this bathroom is "perfect." I'm shocked that all you plan to do this bathroom is paint, caulk and clean before you rent it out.

At the very least, it seems like the medicine cabinet, toilet seat and towel bars should be replaced. It's also hard to beleive that all of the fixtures/faucets are in perfect working order and will need no repair or replacement.

 

[thefed]

Thanks for the description of your rehab costs. When you calculate your expenses for these rehabs, do you give yourself a range, so that you can use the high-end for a worst-case scenario?

The reason I ask is because your costs have already gone up by 20% from your original $5,000 estimate. You're already added an extra $1000 before starting any work, so it is likely that the cost will continue to move higher by the time you finish the renovation.



Your prospective tenants must have very low standards if you think this bathroom is "perfect." I'm shocked that all you plan to do this bathroom is paint, caulk and clean before you rent it out.

At the very least, it seems like the medicine cabinet, toilet seat and towel bars should be replaced. It's also hard to beleive that all of the fixtures/faucets are in perfect working order and will need no repair or replacement.

I dont give myself any kind of range. I just do the work the best I can to bring it to acceptable levels. It is what it is. Sure, my intial guess of 5k is up about 20%, but $1k is a drop in the bucket in the overall scheme of things. If you buy these things right, and have the funding, it really doesnt matter. Sometimes its worth a few extra bucks to add perceived value. For example, I put $3k in siding on a home I had purchased/rehabbed for only 19k. So the siding accounted for over 30% of rehab costs....but in the scheme of things, it was worth it.

I run the numbers in a general manner before we buy....and yes, when i run figure things out BEFORE we buy, i calculate estimated rehab costs and add about 20% error. But, after doing a few, the only errors are usually things you couldnt know were wrong before hand. SO, for those things, we assume we MIGHT be replacing plumbing due to freezing (reserve $500). We MIGHT be replacing h20...reserve 300. We might be doing some roof repaid (reserve 1000). etc etc. If your deal works with all the 'maybe's', it will work when some of that stuff is okay

Re: the bathroom. I'm not renting out a posh highrise apartment here. You'd be shocked what a cleaning an paint can do...IF it's done right. The vanity is perfectly soilid. Clean/degrease it, prime, spray semi gloss white. Will look like new. 2 new hinges and handles and i'm out $15 total. The medicine cabinet will probably be scrapped for a small mirror or $20 medicine cabinet/mirror....trivial. MAYBE I'll need a new toilet if it's cracked or there's no lid...$50 - again no biggie. Maybe I'll throw some ceramic tile in there and really set it off...might cost me $60 total. Maybe i will throw a new counter top on...cultured marble for that size is only $20.

The faucets will be replaced in both baths and kitchen...shiny new chrome always looks nice....and they're cheap....not sure about shower fixtures...havent looked to closely. I knew i didnt mention some things...but got most on the list so you have an idea.

That's why I usually figure $500 or so for little stuff here and there...bathroom faucet only costs $20 so it's not like I really budget for that stuff. the $20 caulk line was not really in my budget...more of a way to explain to previous poster about the bathrooms.

I promise to show some pics of this place when we're done. Goto the album titled delos and look at the bathroom the way we got it...and then when finished. I think i spent 200 bucks...most of that was a shower surround. EDIT:


BEFORE

AFTER

 

[thefed]

oooh man....i just got back from Menard's grand opening sale and saved hundreds of dollars on various items for this house. enough of a saving to make storing the stuff for a few weeks worth it

I just might hit that $5k at this rate...I've been finding lots of good materials CHEAP

 

[samclem]

oooh man....i just got back from Menard's grand opening sale and saved hundreds of dollars on various items for this house. enough of a saving to make storing the stuff for a few weeks worth it

I just might hit that $5k at this rate...I've been finding lots of good materials CHEAP

Christmas in February! Good luck on the projects.

 

[Sarah in SC]

Nice job on this, Fed. I grew up with parents who bought old junkers and did sweat equity to make them nice. We lived in 8 different houses, winding up front beach by the time I left home.
Being handy and having a good vision for what cleaning and paint will do is a real asset! You are surely not afraid of hard work, judging by that bathroom before/after!

 

[Dennis]

that's really nice... G4U..hope it works out..
Upheare in and around N. Sub. Of Chicago, Homes didn't drop that much, but they never do, since the Land is key here, they start at $300k and they just tear down the older 50's house. Which is good for the Area... and they really frown on Rentals and have very strict rules/laws/ordanences on doing so...

When We retired about 60 mi North In SouthEast Wi., Housing was 70% Less, but there are very little Jobs in those area's and you best go into them With $ or a Profession and be ready to Commute 50+ miles one way...

All those Far out Developments ? Are dying on the Vines..I think they called it Urban /Suburban sprawl...I hear Whole Blocks In AZ and other areas are all Ghost towns....And New Schools built for them are closing up everyday..turning them into Office Buildings..

 

[Nords]

Your prospective tenants must have very low standards if you think this bathroom is "perfect." I'm shocked that all you plan to do this bathroom is paint, caulk and clean before you rent it out.

You think you're shocked now, Matt, why don't you visit a few Oahu open houses with me some Sunday afternoon. You'd be amazed what you don't get for $600K.

Lookin' good, thefed. If you keep this up you'll be renting out half the town...