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Old 08-31-2017, 12:24 AM   #141
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I am paying ~$13K for 20 insert windows, plus making a smaller window an egress window. Already paid ~$2500 for electrical box. These two tasks will be subbed out. All other labor likely me, unless I get a helper or someone that wants work. I will be able to do the rest, it just takes time.

Flooring will be $2,500 in materials. Paint $500. Kitchen cabinets ~$1,000. Counter tops, faucets, sinks, etc. $500. Sheetrock, doors, other supplies ~$1,000. Plumbing materials $250.

It will take maybe 200 hours. I am selling in the Spring, and taking the Winter in FL. So there will be a lot of downtime. Plus I get a bit lazy these days. It's funny after you retire, you are less efficient. I used to make every second count, now I barely make the hours count.

Each day I make progress, but only 4-5 hours each day.

Here is a before and after of a different remodel I did. It's hard to see the wall that was removed, but it is much more spacious and open. And rents for $300 a month more. That was a 6-week project. The original 30-year old particle board cabinets were falling apart. New all wood, RTA cabinets replaced them.


Wow! Looks beautiful.
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Old 08-31-2017, 12:00 PM   #142
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Hello Senator
My son is just starting in RE investing. This year we (he and I) are doing the same kind of rehab on a 115 year old home (duplex) in Milwaukee. Yours looks like his did a few weeks ago. 15k for the house and about 12k for the materials. All work done by us. This 27k investment should bring in 13-1400 per month. In a class c or d neighborhood. In less than 2 years he should 100% paid back. By then I (a 2018 graduate) will be there helping rehab the next ones. This looks to be a way for us "simple folks" to add to our incomes.
Thanks for taking all the time responding to this thread. I was leary at first when my son said what he was doing but respect his ideas. Now it looks like a viable income.
As time goes on I hope to assist all 5 of my kids in getting this low cost added income. Milwaukee has some great opportunities that we hope to grab.
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Old 08-31-2017, 12:11 PM   #143
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I'm curious - how does one "classify" a neighborhood as a, b, c, d, etc.?

I assume it's some combination of the age and type of housing and the income of the residents, but based on what data source?
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Old 08-31-2017, 12:17 PM   #144
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Hello Senator
My son is just starting in RE investing. This year we (he and I) are doing the same kind of rehab on a 115 year old home (duplex) in Milwaukee. Yours looks like his did a few weeks ago. 15k for the house and about 12k for the materials. All work done by us. This 27k investment should bring in 13-1400 per month. In a class c or d neighborhood. In less than 2 years he should 100% paid back. By then I (a 2018 graduate) will be there helping rehab the next ones. This looks to be a way for us "simple folks" to add to our incomes.
Thanks for taking all the time responding to this thread. I was leary at first when my son said what he was doing but respect his ideas. Now it looks like a viable income.
As time goes on I hope to assist all 5 of my kids in getting this low cost added income. Milwaukee has some great opportunities that we hope to grab.
It is helping people like you and your son, why I "bible thump" real estate.
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Old 08-31-2017, 12:17 PM   #145
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I looked it up on google. Experience with the neighborhood?
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Old 08-31-2017, 12:18 PM   #146
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Old 08-31-2017, 12:37 PM   #147
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Originally Posted by Amethyst View Post
I'm curious - how does one "classify" a neighborhood as a, b, c, d, etc.?

I assume it's some combination of the age and type of housing and the income of the residents, but based on what data source?
It is a bit subjective, but if you are in a class D neighborhood, you know it....


https://www.multifamilypro.com/multi...assifications/
Class A properties are luxury apartments. They are usually less than 10 years old and are often new, upscale apartment buildings. Average rents are high, and they are generally located in desirable geographic areas. White-collar workers live in them and are usually renters by choice.

Class B properties can be 10 to 25 years old. They are generally well maintained and have a middle class resident base of both white and blue-collar workers. Some are renters by choice, and others by necessity.

Class C properties were built within the last 30 to 40 years. They generally have blue-collar and low- to moderate-income residents, and the rents are typically below market. This is where you’ll find many residents that are renters “for life.” On the other hand, some of their residents are just starting out. And as they get better jobs, they work their way up the rental scale.

Class D properties are where you’ll find many Section 8 in the US or government-subsidized housing residents. They are generally positioned in lower socioeconomic areas.
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Old 08-31-2017, 01:00 PM   #148
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Real Estate is not for everyone, and certainly should not be anyone's first investment, at least not in a typical landlord sense. Maybe a REIT, but not being a landlord. Maybe you get lucky, maybe not. If you get a bad tenant, it could wipe you out. I have had many bad ones, until I figured it out.

I kicked out a woman with stage 4 terminal breast cancer that several of her family members called to plead me to drop the eviction. Nope, out she went. She died six month's later. I have no regrets, other than I should have done it sooner. As it was, I only owned the building four days when I filed the eviction. I should have done it day one.
Stories like these are why my Dad got out of real estate. He had trouble viewing things objectively when folks were in trouble and always wanted to give them the benefit of the doubt. My brothers and I were his work/maintenance/protection crew, and we'd see folks give him sob stories of not being able to meet the rent, but noticing how they were buying cars and spending money and just plain lying to him in all kinds of way. You do need to hold the line to be successful.

I have also seen the other side, where a family friend had a severe illness, lost her job and was in a similar situation of being evicted. We and 2 other couples payed her rent for a few months, and her landlord was very appreciative of us helping her out. When she got back on her feet and was able to support herself again her landlord gave her terrific treatment, "extra special" in her words.
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Old 08-31-2017, 03:20 PM   #149
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Didn't realize this pertained only to multifamily housing. I gather we had Class B places.

Quote:
Originally Posted by Senator View Post
It is a bit subjective, but if you are in a class D neighborhood, you know it....


https://www.multifamilypro.com/multi...assifications/
Class A properties are luxury apartments. They are usually less than 10 years old and are often new, upscale apartment buildings. Average rents are high, and they are generally located in desirable geographic areas. White-collar workers live in them and are usually renters by choice.

Class B properties can be 10 to 25 years old. They are generally well maintained and have a middle class resident base of both white and blue-collar workers. Some are renters by choice, and others by necessity.

Class C properties were built within the last 30 to 40 years. They generally have blue-collar and low- to moderate-income residents, and the rents are typically below market. This is where you’ll find many residents that are renters “for life.” On the other hand, some of their residents are just starting out. And as they get better jobs, they work their way up the rental scale.

Class D properties are where you’ll find many Section 8 in the US or government-subsidized housing residents. They are generally positioned in lower socioeconomic areas.
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Old 08-31-2017, 03:30 PM   #150
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Well my con list just got a little longer, finally got the eviction finalized and took back possession of the house today. It's a little trashed, didn't appear so 6 months ago when I did a walk through, couple of broken doors, a broken window, a dump load of their trash and a lot of filth to clean up, nothing a couple more thousand can't handle, would be a lot less if I wanted to do work myself but nah, don't want to get dirty.... It's my 2nd eviction in 8 years
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Old 09-01-2017, 09:10 AM   #151
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Seems like a decent amount of work here and there as opposed to just a few hours a month. At least to me, confirms that for high income people it is better to invest in your job and stocks unless you really enjoy the real estate gig. Low income can really improve your situation if you have the time to work at it. Know your strengths and opportunities though - is it better to run a rental and work or train/become a plumber or electrician (or other job)? Especially early on, getting a certification or degree could easily outpace that investment on your first rental.

That is during working years - in retirement it is time to re-evaluate if you have enough or again want to put in effort to increase finances. Personally I would just OMY at work but some people want to have something to keep them busy in retirement.
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Old 09-01-2017, 09:58 AM   #152
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My dad started flipping houses in the 1960's. He loved the flipping, the tenant screening and the maintenance because he had someone to talk to when he went to do the work. As he got older and my mom was diagnosed with Alzheimer's, he decided to offer to "sell" the houses to the current tenants - he'd gladly carry the note at 8+%. Not everyone is cut out to be a home owner - they could barely afford the house payment, taxes and insurance, let alone home repairs.


This & SS was their retirement income. FULL DISCLOSURE: these were <1000 square feet 1930's and 40's homes in Class D neighborhoods.


When he died, I inherited all of these notes, and the families attached to them. Dad was a softy, and many were behind or incredibly slow, needing LOTS of encouragement. Did I mention he died in 2007? Many of them lost their jobs thanks to the Great Recession, and expected me to be as soft as dad was. Problem was, I needed that monthly income to keep mom in memory care. DH and I already had full-time jobs and it was exhausting listening to their endless stories du jour on why they needed just a little more time.


One by one, they walked away without warning, or I offered cash for keys or went through a couple of VERY painful evictions. I do not like throwing people out of their homes. I also don't like having a gun pulled on me when asking for their payment, or kooks who sue me to try to gain Quiet Title because they said my parents' estate hadn't been probated properly. I sold these houses for far less than they'd be worth today, but I knew with the quality of properties I was dealing with, I'd just be lather, rinsing & repeating with the type of occupants who would be willing to live there.


I'm down to two properties now, I refinanced one widow at a ridiculously low interest rate to help her pay it off in <10 years (risk management for me), and I've worked with the other couple to help them understand personal finance, and they very likely will be able to get a real loan and pay me off by the end of this year. That's the goal.


Real estate is a piece of cake compared to the people occupying it. Real estate is not for me, but it was illuminating and humbling. I had no idea people lived like this and when I retire I want to volunteer somewhere to help people (who are interested) get a grasp on their own finances and stop living hand to mouth. Lofty goals, I know. Gotta start somewhere!


P.S. Sorry this was so long - it was cathartic. And, if you love your children, you won't leave them real estate.
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Old 09-01-2017, 10:30 AM   #153
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And, if you love your children, you won't leave them real estate.
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Old 09-01-2017, 10:40 AM   #154
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My dad started flipping houses in the 1960's. He loved the flipping, the tenant screening and the maintenance because he had someone to talk to when he went to do the work. As he got older and my mom was diagnosed with Alzheimer's, he decided to offer to "sell" the houses to the current tenants - he'd gladly carry the note at 8+%. Not everyone is cut out to be a home owner - they could barely afford the house payment, taxes and insurance, let alone home repairs.


This & SS was their retirement income. FULL DISCLOSURE: these were <1000 square feet 1930's and 40's homes in Class D neighborhoods.


When he died, I inherited all of these notes, and the families attached to them. Dad was a softy, and many were behind or incredibly slow, needing LOTS of encouragement. Did I mention he died in 2007? Many of them lost their jobs thanks to the Great Recession, and expected me to be as soft as dad was. Problem was, I needed that monthly income to keep mom in memory care. DH and I already had full-time jobs and it was exhausting listening to their endless stories du jour on why they needed just a little more time.


One by one, they walked away without warning, or I offered cash for keys or went through a couple of VERY painful evictions. I do not like throwing people out of their homes. I also don't like having a gun pulled on me when asking for their payment, or kooks who sue me to try to gain Quiet Title because they said my parents' estate hadn't been probated properly. I sold these houses for far less than they'd be worth today, but I knew with the quality of properties I was dealing with, I'd just be lather, rinsing & repeating with the type of occupants who would be willing to live there.


I'm down to two properties now, I refinanced one widow at a ridiculously low interest rate to help her pay it off in <10 years (risk management for me), and I've worked with the other couple to help them understand personal finance, and they very likely will be able to get a real loan and pay me off by the end of this year. That's the goal.


Real estate is a piece of cake compared to the people occupying it. Real estate is not for me, but it was illuminating and humbling. I had no idea people lived like this and when I retire I want to volunteer somewhere to help people (who are interested) get a grasp on their own finances and stop living hand to mouth. Lofty goals, I know. Gotta start somewhere!


P.S. Sorry this was so long - it was cathartic. And, if you love your children, you won't leave them real estate.


This is absolutely real (except the gun part) and happens all the time with low income rentals. Ask me how I know. By the way, I don't think it's wise to go to anyone's door and ask for rent. I plan to sell them all within the next 10 years because I wouldn't want to pass this on to my children. However, with the right temperament and know how, they can be quite profitable. It's definitely not for everyone but it's definitely better than working at somebody else's business full time with no control over your time. Just my two cents.
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Old 09-01-2017, 10:44 AM   #155
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It seems to be this is where the introvert/extrovert thing comes into play.
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Old 09-01-2017, 10:53 AM   #156
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However, with the right temperament and know how, they can be quite profitable. It's definitely not for everyone but it's definitely better than working at somebody else's business full time with no control over your time. Just my two cents.
This is exactly how my dad felt about it. He was self-employed anyway, so the real estate fit in beautifully when business was slow.

I, on the other hand, do not have the right temperament, obviously. DH was very excited to inherit all this, and within 3 months he realized what we'd fallen into.

I'm glad it has worked for you, seriously. I envy lots of things about it (mainly $$) but it's the other stuff I just couldn't handle. Seriously, I could write a book. If Google didn't crawl this site, I'd provide details.
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Old 09-01-2017, 11:06 AM   #157
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Old 09-01-2017, 11:17 AM   #158
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My dad started flipping houses in the 1960's. He loved the flipping, the tenant screening and the maintenance because he had someone to talk to when he went to do the work. As he got older and my mom was diagnosed with Alzheimer's, he decided to offer to "sell" the houses to the current tenants - he'd gladly carry the note at 8+%. Not everyone is cut out to be a home owner - they could barely afford the house payment, taxes and insurance, let alone home repairs.


This & SS was their retirement income. FULL DISCLOSURE: these were <1000 square feet 1930's and 40's homes in Class D neighborhoods.


When he died, I inherited all of these notes, and the families attached to them. Dad was a softy, and many were behind or incredibly slow, needing LOTS of encouragement. Did I mention he died in 2007? Many of them lost their jobs thanks to the Great Recession, and expected me to be as soft as dad was. Problem was, I needed that monthly income to keep mom in memory care. DH and I already had full-time jobs and it was exhausting listening to their endless stories du jour on why they needed just a little more time.


One by one, they walked away without warning, or I offered cash for keys or went through a couple of VERY painful evictions. I do not like throwing people out of their homes. I also don't like having a gun pulled on me when asking for their payment, or kooks who sue me to try to gain Quiet Title because they said my parents' estate hadn't been probated properly. I sold these houses for far less than they'd be worth today, but I knew with the quality of properties I was dealing with, I'd just be lather, rinsing & repeating with the type of occupants who would be willing to live there.


I'm down to two properties now, I refinanced one widow at a ridiculously low interest rate to help her pay it off in <10 years (risk management for me), and I've worked with the other couple to help them understand personal finance, and they very likely will be able to get a real loan and pay me off by the end of this year. That's the goal.


Real estate is a piece of cake compared to the people occupying it. Real estate is not for me, but it was illuminating and humbling. I had no idea people lived like this and when I retire I want to volunteer somewhere to help people (who are interested) get a grasp on their own finances and stop living hand to mouth. Lofty goals, I know. Gotta start somewhere!


P.S. Sorry this was so long - it was cathartic. And, if you love your children, you won't leave them real estate.
Thanks for sharing your story. Sounds like a nightmare. I always think of Warren Buffett's quote that investing is like baseball, except you're not limited to three strikes. You can stand at the plate all day waiting for perfect pitches. I think this applies to real estate, too. There are, in fact, deals that are quick, easy and painless. They're just not plentiful. I recall buying a house for $300k cash a few years ago, and selling it a month later for $400k without doing ANY work at all to it. Obviously I wish that kind of opportunity knocked on my door every week, but it doesn't. When it does, though, the reward is huge. The hard part is saying no to the myriad decent, average or almost-there opportunities that do come along frequently and keeping the cash available to move quickly when a home run possibility is in site.

Regarding the desire to help people with their finances, I've given up on helping adults. They ask for advice, thank you profusely, then continue spending beyond their means, falling for sales pitches, etc. So I turned to teaching Jr. Achievement in schools. Kids are much more receptive, and haven't yet formed their lifelong bad habits.
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Old 09-01-2017, 11:27 AM   #159
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More the hardhead/softheart thing, I'd say.

You have to be willing to be seen as the bad guy on occasion. Preferably, before the wrong people talk their way into your property.

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It seems to be this is where the introvert/extrovert thing comes into play.
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Old 09-01-2017, 11:34 AM   #160
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More the hardhead/softheart thing, I'd say.

You have to be willing to be seen as the bad guy on occasion. Preferably, before the wrong people talk their way into your property.
Oh yeah, sure about that story.

My context was bad. I meant R.E. in general. I think it helps to be an extrovert to manage your real estate. A background in sales helps too.

Or, own the RE and have a management company deal with that stuff. This is what my neighbor does.
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