Just went over some software we are considering buying to help estimate for renovations. It is basically a giant spreadsheet, but has prices for literally every task (as small as replacing a smoke detector). Estimated based on the last small job our contractor did for us and found we were a bit overcharged. That's ok, just did it for practice and as we get better hopefully he will be happy to use our estimates rather than coming up with his own. The contractor seems to estimate by picking random numbers, no formal system.
The spreadsheet is pretty cumbersome, but if it helps keep things organized, it is well worth it for only $65.
Still owed rent on two units and last day of the month is tomorrow. Will continue eviction proceedings for one apartment on Thurs most likely. They've had notice given, next step is court!
Tuesday, February 28, 2012
Monday, February 27, 2012
Exciting times- looking for a new property
We spent Saturday driving all over the area with our Realtor looking at potential properties for flipping. We came up with two possibilities. One is very near our house, which will be convenient. It is a complete gut job. People have broken in and stolen the copper pipes and everything. Weirdly the kitchen cabinets and the appliances actually look fine. The walls are a complete mess. We will need to insulate and drywall in some areas, paint everything. A bathroom reno would be a good idea, but it actually has 2 full baths and is 1800 square feet. In a very nice area. If Hubby gets it for cheap (he is thinking of bidding 50K, although it's listed for 77K), and can keep the renovations and other expenses (closing costs, utilities, taxes, etc.) under another 50K he might make a very nice profit on it. It is clearly the ugly duckling in it's neighborhood. The sale price of other houses on the same street run 130-140K, and it has a huge lot for this area (.5 acres).
The second possibility is pretty far away, but the property itself is in great shape. Needs some paint and carpet. Fixtures are a little dated, so we can easily change those out. Very nice back yard. Ok curb appeal, a few flowers would help a lot. The only problem is that there is a power station, with an ugly fence and several big ugly boxes directly across the street. Otherwise it seems like really really nice neighborhood. He is also looking at maybe getting this house for 50K (I think it's listed in the 60s). He can put 10-15K into it and sell it for somewhere in the 90s (hopefully).
One question we have is whether it makes sense to buy both. We need to develop a pipeline for this sort of thing, but don't really have the manpower to do two renovations at once. Maybe we can somehow offset the closing dates. Maybe we won't even get both. Both are bank owned and the bid/purchase process takes a long time in that situation (but you can usually get a much better price).
The second possibility is pretty far away, but the property itself is in great shape. Needs some paint and carpet. Fixtures are a little dated, so we can easily change those out. Very nice back yard. Ok curb appeal, a few flowers would help a lot. The only problem is that there is a power station, with an ugly fence and several big ugly boxes directly across the street. Otherwise it seems like really really nice neighborhood. He is also looking at maybe getting this house for 50K (I think it's listed in the 60s). He can put 10-15K into it and sell it for somewhere in the 90s (hopefully).
One question we have is whether it makes sense to buy both. We need to develop a pipeline for this sort of thing, but don't really have the manpower to do two renovations at once. Maybe we can somehow offset the closing dates. Maybe we won't even get both. Both are bank owned and the bid/purchase process takes a long time in that situation (but you can usually get a much better price).
Thursday, February 16, 2012
Tax Time for us
My husband does the management of everything, but I am in charge of the taxes. Generally having rentals is very beneficial tax-wise. Because of the depreciation, and the expenses you can deduct, often you show a loss on paper rather than a profit.
Of course, my husband is good at this, so we show a profit most years! If you have a "day" job and your income from that is too much, you cannot deduct your losses, but you can carry the loss from year to year.
Hubby keeps track of every income and expense on the computer, and keeps receipts for absolutely everything. One of the weirder things is the vehicle deduction. You can take a mileage deduction for the car when you spend time driving around. We haven't bothered when we had only 1 or 2 properties, but with 7 it is worth it. Now hubby drives around with a series of mileage logs, one for each property!
Of course, my husband is good at this, so we show a profit most years! If you have a "day" job and your income from that is too much, you cannot deduct your losses, but you can carry the loss from year to year.
Hubby keeps track of every income and expense on the computer, and keeps receipts for absolutely everything. One of the weirder things is the vehicle deduction. You can take a mileage deduction for the car when you spend time driving around. We haven't bothered when we had only 1 or 2 properties, but with 7 it is worth it. Now hubby drives around with a series of mileage logs, one for each property!
Tuesday, February 7, 2012
Eviction time and mold problems
Came home today to learn that we have mold issues in one building, and that is going to cost us $2000. Can't mess around with mold however, so we have our handy man working on it already. The rents in this place are really low and the tenants are just not used to a landlord that really fixes things when they break. We continue to hope that they will take this as a good reason to work hard to stay up with their rents. One guy was actually waiting at the apartment at the appointed time on Sat to pay his rent! Says he is trying to save up for a house and that is why they want to live as cheaply as possible now. What a perfect tenant!!!
On the bad news front, another apartment is already 2.5 months behind and it doesn't look real promising. We were supposedly waiting for their tax refund, but they are now ducking calls, etc. Looks like a trip to the courthouse is in order. What a weird process that is. Hubby has to go to courthouse and pay something. A hearing date will be set and the tenants will be served notice. At the hearing, they judge will usually give the tenants another 10 days to pay in full everything they owe. Last time it all worked out (not in 10 days, but over the course of a few months). Let's hope this time it does too. The sad part is that most of these people are really really nice. They just cannot get their lives together.
On the bad news front, another apartment is already 2.5 months behind and it doesn't look real promising. We were supposedly waiting for their tax refund, but they are now ducking calls, etc. Looks like a trip to the courthouse is in order. What a weird process that is. Hubby has to go to courthouse and pay something. A hearing date will be set and the tenants will be served notice. At the hearing, they judge will usually give the tenants another 10 days to pay in full everything they owe. Last time it all worked out (not in 10 days, but over the course of a few months). Let's hope this time it does too. The sad part is that most of these people are really really nice. They just cannot get their lives together.
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