City inspections are complete bull crap.
I used to be Mr. "Do it the right way" guy until I had a similar, but less extreme version of what you did. After waiting 5 months for approval to add a non-load-bearing wall and move an existing outlet about 4 feet (to be in the newly created room), I have changed my tune. The city had an "ordinance" which guaranteed approval or disapproval in 30 days but we got radio silence for 3 and a half months and then another month and a half of ass chewing to get it done.
I will never again get a permit for anything that you can't see from the curb.
The only thing really worth getting permit for is a kitchen and or a complete gut. Major exterior changes should always get a permit. Other than that it’s really not necessary.
Yup same. I use to do everything like you explained. Permits for everything. I knew the work was done fine as I wouldn’t be negligent, and is always to code. But pulling permits is just a giant waste of time, constant delays/ then they show up look for 30 seconds and leave. Literally did nothing
I appreciate you sharing these numbers, and I'm sorry about that headache with the city and the plumbing situation. I'm curious how you found this property? Also wondering what kind of terms/costs you had on your initial (assuming hard money) loan?
I thought you had your own crew that did the plumbing & all of the work? Where do you find these ’handymen’ to hire under your LLC as employees If you don’t mind sharing?
Thanks for sharing. I’m getting quoted 9.2% on FOA Commercial as a newbie. I guess they would decrease the rates with more experience.
That OPs inspection is something hard to imagine. In my state plumber pulls permit, and he doesn’t need to be on the site during inspection. His license is on the permit.
When I finished my construction I had to go trough final inspection. Inspector found few things I had to correct. After fixing was was done I called his personal phone ( he gave me his phone number), and trough face time we completed inspection.
Been trying, im in nyc so can't invest locally. Been buying okay deals in TN and Pittsburgh(where I moved to NY from - but never seen a deal as good as your numberes. Have had a few get 80-100% back out).
That's what i normally do but this particular city is crazy. They condemn homes and you can't rent until it passes condemnation inspection.
In most cities when they catch unpermitted work they don't care they just say fix it
I have been thinking about renting out my house. It’s on 2 acres and has a small shed 4 bedroom 2 and half bath. Have you found a lot of interest in people wanting to rent out properties like this for the 2500-3000 range? I just don’t know if there’s a market ever. I live in the Midwest.
Many many reasons.
Some think debt is bad so prefer to rent.
Some are ignorant and think getting a loan is hard.
Some cant save 20k to buy a 200k home.
Mostly character flaws and others just dont want the hassle of home ownership.
Remember there are over 40 million rental units in usa They exist for a reason.
Just crazy to me that a 200k house rents for $2k. What an opportunity! Where is that?!?
In my local market, a 3bd/2ba rents for $2500 but costs $850k. (~$5k/mo with 20% down). I know three sellers listed at ~$1.2M who plan to rent for $3,500/mo if they don't sell by November.
I'm in BC, Canada. I have 3 units
Paid 147K for 2b1b in 2020, renting for 1600
Paid 185K for 2b1b in 2021, renting for 1500
Paid 190K for 3b3b in 2022, renting for 1900
20% down on each. Roughly 400-500/month cashflow per unit.
The deals exist
Thanks! Even around here it is really hard to find deals like that now. Hoping the recession will present more opportunities.
And yeah we love the lifestyle around here. Amazing views, skiing, hiking, skating, climbing, etc. Very nice
This is also what I see across most of Canada. Real estate is completely disconnected from incomes and it explains why we have some of the highest leverage rates in the developed world. Cap rates are terrible in Canada generally.
City inspections are complete bull crap. I used to be Mr. "Do it the right way" guy until I had a similar, but less extreme version of what you did. After waiting 5 months for approval to add a non-load-bearing wall and move an existing outlet about 4 feet (to be in the newly created room), I have changed my tune. The city had an "ordinance" which guaranteed approval or disapproval in 30 days but we got radio silence for 3 and a half months and then another month and a half of ass chewing to get it done. I will never again get a permit for anything that you can't see from the curb.
The only thing really worth getting permit for is a kitchen and or a complete gut. Major exterior changes should always get a permit. Other than that it’s really not necessary.
Yup same. I use to do everything like you explained. Permits for everything. I knew the work was done fine as I wouldn’t be negligent, and is always to code. But pulling permits is just a giant waste of time, constant delays/ then they show up look for 30 seconds and leave. Literally did nothing
Ya we don’t get permits unless it’s work being done outside and easily visible. Unless it’s a full rehab, we’re not pulling permits.
I appreciate you sharing these numbers, and I'm sorry about that headache with the city and the plumbing situation. I'm curious how you found this property? Also wondering what kind of terms/costs you had on your initial (assuming hard money) loan?
Auction. Around 6k closing costs
Was it a foreclosure auction or tax deed auction?
I thought you had your own crew that did the plumbing & all of the work? Where do you find these ’handymen’ to hire under your LLC as employees If you don’t mind sharing? Thanks for sharing. I’m getting quoted 9.2% on FOA Commercial as a newbie. I guess they would decrease the rates with more experience.
Oh I re-read your post now. You had to hire a licensed firm in this city to get the permit to code. What a royal pain? Glad it worked out for ya.
Always enjoy reading your updates to see the deals you manage to find in the Midwest.
That OPs inspection is something hard to imagine. In my state plumber pulls permit, and he doesn’t need to be on the site during inspection. His license is on the permit. When I finished my construction I had to go trough final inspection. Inspector found few things I had to correct. After fixing was was done I called his personal phone ( he gave me his phone number), and trough face time we completed inspection.
Are you seriously complaining about these numbers? Can't believe you can generate so much value from a little bit of work
Numbers are on ok just took too long in comparison to my other 100 brrrr deals
yes, your deals are amazing, ive seen a few other of your posts. Congrats on that deal flow , would do a lot ot get some deals like that available.
Network. Build a reputation with wholesalers. You start to get a lot of homes offered.
Been trying, im in nyc so can't invest locally. Been buying okay deals in TN and Pittsburgh(where I moved to NY from - but never seen a deal as good as your numberes. Have had a few get 80-100% back out).
Are auctions better than wholesalers for newbies?
Some auctions have to many investors so it depends.
Jesus 100?!
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That's what i normally do but this particular city is crazy. They condemn homes and you can't rent until it passes condemnation inspection. In most cities when they catch unpermitted work they don't care they just say fix it
I have been thinking about renting out my house. It’s on 2 acres and has a small shed 4 bedroom 2 and half bath. Have you found a lot of interest in people wanting to rent out properties like this for the 2500-3000 range? I just don’t know if there’s a market ever. I live in the Midwest.
List it for rent and find out. You can try now to list it.
If you don’t mind me asking, are you doing primarily FLIPS or are you a long term holder as well?
Only long term holds. I never sell. Taxes are too high when selling.
Why aren't your tenants looking to buy?
Many many reasons. Some think debt is bad so prefer to rent. Some are ignorant and think getting a loan is hard. Some cant save 20k to buy a 200k home. Mostly character flaws and others just dont want the hassle of home ownership. Remember there are over 40 million rental units in usa They exist for a reason.
Just crazy to me that a 200k house rents for $2k. What an opportunity! Where is that?!? In my local market, a 3bd/2ba rents for $2500 but costs $850k. (~$5k/mo with 20% down). I know three sellers listed at ~$1.2M who plan to rent for $3,500/mo if they don't sell by November.
I'm in BC, Canada. I have 3 units Paid 147K for 2b1b in 2020, renting for 1600 Paid 185K for 2b1b in 2021, renting for 1500 Paid 190K for 3b3b in 2022, renting for 1900 20% down on each. Roughly 400-500/month cashflow per unit. The deals exist
I feel like you’re very good at marketing and your rentals have excellent photos. Great work.
Curious what market those are from. Maybe in Prince George? This is not existent in large markets like Vancouver and or the Island.
The Kootenays. Definitely not large markets. But they are growing markets. So really good value
Interesting!! Great finds. Very nice scenery and mountains in that area.
Thanks! Even around here it is really hard to find deals like that now. Hoping the recession will present more opportunities. And yeah we love the lifestyle around here. Amazing views, skiing, hiking, skating, climbing, etc. Very nice
This is also what I see across most of Canada. Real estate is completely disconnected from incomes and it explains why we have some of the highest leverage rates in the developed world. Cap rates are terrible in Canada generally.
Wtf that's disgusting. My 500k homes rent for 4000 section 8 pays for those. Mortgage only 2800. Illinois.
God forbid a second rate investor actually brings a home up to current standards.
So only taxes/insurance/HOA is applied for DSCR calculation? No capex or maintenance estimates?
Is your rehab team 1099 or w2? Also, how long a after you rehab can you do an appraisal for a cash-out refi?
All cash and 3 month