Archive for the ‘house repairs’ Category

Our First Rental House Plunge

Wednesday, May 22nd, 2013

By Terry & Angy Sprouse

 

We (Terry & Angy) are partners in both marriage and in real estate business.

Who says married couples can’t be business partners? And the great thing is we have never considered divorce . . . murder sometimes, but never divorce. Well, never murder, really, but maybe forcing each other to watch, in an uninterrupted viewing, the horrifyingly bad movie, The Clan of the Cave Bear.

In reality, this business has been a bonding experience, not only for us, as husband and wife, but also for our two boys, who have been active participants in the business from the very beginning.

9/11 Attacks Take the Starch Out of Us

We started in real estate investing following the terrorist attacks on the World Trade Center. The ensuing economic recession forced our hand. The hours at Terry’s job were drastically reduced. We realized that for the security of our family, we needed to have a business on the side—a business able to provide regular cash flow in case Terry’s 9 to 5 job suddenly went away.

This led Terry to experience a very intensive period of soul searching and in-depth research (accompanied by gratuitous whining and moping). We decided that a rental house business was the best way to go. We were excited to find the rental business was an easy business to learn and to start. This business required no special license, degree, or training. And the results tempered the most important source of Terry’s whining. The rental business offered the potential to make money.

We Jump In and Hope the Net Appears

We essentially just jumped in with good intentions and very little practical knowledge. After we made up our minds that this is what we wanted to do, we simply bought an inexpensive fixer-upper house, one that had foreclosed and been repossessed by a bank. We moved into and lived in the fixer-upper house while we did the necessary repairs.

But most importantly, we did not sell our original home. We rented it out.

Angy Puts Her Foot Down – On Top of Terry’s Foot

It took a little adjustment to move into that first fixer-upper house. The first thing we did was to get one of the bathrooms back into working condition. Angy’s negotiating stance on that topic was, “I’m not living in that house unless at least one bathroom is fully operational!” At that, who could argue? Marveled by a mother’s logic, together Terry and the boys nodded their heads and dropped the labeled empty plastic bottles they held in their hand into the Recycle Box.

As we went forward with the repairs, we changed bedrooms frequently. Moving from room to room, we cleared out of one bedroom to install tile and then moved again out of the next to make room to install carpet. Huffing and puffing, we moved furniture from one side to the next as we worked through the house painting all the walls. We replaced the cabinets in the kitchen, the fixtures in the bath, the leaky plumbing and the outdated lighting.

Group Hugs

Preparing meals required serious creativity. Entertainment and rest required the same. But the support and flexibility from all family members, and a few timely “group hugs” (some through gritted teeth), got us through.

 

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Recommended reading:

Remove that Garbarge Disposal Now!

6 Steps to Roof Maintenance (for the Home that will Turn Into a Rental House)

How I Evicted A Problem Tenant in 4 Steps

When to Hire a House Inspector – Radio Interview with Rich Peterson

Getting Rid of Bad Tenants

“Turn your home into a rental” on Mark Wayne Show

7 Reasons to Live in a Fixer-Upper House While You Repair It

6 Steps to Roof Maintenance (for the Home that will Turn Into a Rental House)

Our First Rental House Plunge

10 Most Frequent Problems Found by House Inspectors

5 Steps to Get Your House Ready to Rent by Terry Sprouse

5 Steps to take if your house is flooded

Some perfectly legal ways to maximize your rental profits

Add “Start a Rental House Business” to Your Bucket List

The 5 Rules on How to Lose Money and Get Your Rental Property Trashed by Tenants

Window Repair with #2 Son

Required Roof Maintenance for Fixer Upper Houses

Learn to Repair Your Fixer Upper Houses

How I Got Started In Fixer-Upper Houses

How to learn to operate a fixer upper house business

The Peaceful Warrior and Fixer-Upper Houses

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5 Steps to take if your house is flooded

Wednesday, October 24th, 2012

I once purchased an investment property that I was sure was going to be an ideal rental house. It was in a location where there was high demand for rentals, and it was nice attractive house.

My Shocking Experience

I decided to check out the property one more time on the day before signing the papers. I was in for a shock. When I opened the door, I was hit in the face with an overpowering dank smell that was so thick that I almost couldn’t get into the house. It was like walking underwater.

I looked down and I saw that the carpets were soaked with water. The walls of the house were black. I quickly discovered that the hot water heater was leaking, and had flooded the house.

I will not scream! I will not scream! I will not Aaaahhhhhhhhh!!

Since all the windows and doors tightly closed,  the mother-of-all steam baths had formed inside the house. If I weren’t already as thin as a rail, I probably could have lost 30 pounds in there in 10 minutes.

I Feel a Scream Coming

While I would have had every right to scream like Jamie Lee Curtis in those old “Halloween” movies, to my credit, I didn’t do that. Plus, my two sons were with me at the time, and it would have ruined the image they had of me as a modern-day James T. Kirk, bold captain of the Sprouse family.

Steady as she goes, Mr. Chekov.

Since I’ve now used up my ‘reservoir’ of metaphors to describe this dire situation, let’s get to the steps to address this issue.

5 Steps to Take if Your House is Flooded

1.) Don’t touch the merchandise.

Don’t touch anything that is electric while standing in water. It may be tempting to want to turn on lights and turn off appliances, but don’t do it. You wouldn’t adjust the radio while you are in a bathtub, and your house is now a giant bathtub. If the electrical outlets near the floor are saturated, you should not be in that house.

If the fuse box is in a dry location, turn off the power.

Have an electrician check the system before turning on the power again.

N 95 Mask

If you plan to be inside the house for any amount time, or if you plan to clean up mold, you should wear a N95 mask to wear while you’re there. (See step #5 before donning your mask).

2.) Remove the water.

Open up the doors and windows and let the house air out for at least 30 minutes before spending any time in the house.

Dry out things that got wet. You basically have between 24 to 48 hours to dry out things that have gotten wet, before irreparable damage sets in.

Once the electricity is back on, having been checked by an electrician, you can use a “wet dry” shop vacuum to remove standing water. Wear rubber boots.

Even after the water is pumped out of the house, you must act quickly to avoid the residual damage in walls and under carpets. The imbedded dampness can permanently weaken carpet fibers and soften sheetrock walls.

The most important thing to worry about is mold and mildew. Mold and mildew spores are always present in the air that we breathe and if we only add a little warmth, darkness, and moisture, they become unwelcome house guests.

3.) Get the humid air out.

Use de-humidifiers and fans to remove the excess humidity. Place fans in doors and windows to blow the air out the window, so as not to circulate mold back into the house.

Do not turn the furnace on to dry out the air. This will only increase the humidity and transport the spores throughout the house.

Have your home heating, ventilating, and air-conditioning (HVAC) system checked and cleaned by a maintenance or service professional who is experienced in mold clean-up before you turn it on.

4.) Get rid of carpet padding.

Usually, even though you haven’t passed the 24-48 hour time limit, disaster recovery experts will remove any soaked padding from beneath the carpet and treat the floor and the underside of the carpet with a mildew inhibitor such as Pine Sol.

5. Let the doctors do their job

Outta my way!

The Nexium commercial (to treat heartburn) says, “You wouldn’t want a doctor doing your job,” and a doctor comes trotting out of the bullpen to be the relief pitcher in a professional baseball game, or operates a jack hammer. This principal applies to you and your flooded house too. Unless you are an expert, you probably shouldn’t tackle this project yourself. Because mold and mildew are such dangerous foes, it’s best to call in the pros to handle flooded houses.

The Happy Conclusion to My Story

In the case of the investment property that I mentioned earlier, the water had been in the house for several days (beyond the 24-48 hour limit) and the owner wisely owner hired a mitigation company. The company had to replace all of the carpeting and most of the drywall.  It was almost like a new house when they finished. They tested the air and the spore count for mold and mildew in the house, and when they were finished, the count was lower than the count outside the house.

Although I had cancelled the sale, I made another offer on the house when it came back on the market, and I wound up purchasing the property after all. It was a better house than the first time I bid on it.

Below is a useful video series about dealing with flooded houses. The emphasis is on pretty drastic flooding (way over the 24-48 hours limit), but it covers many important things to consider.

 

Related Articles

6 Steps to Roof Maintenance (for the Home that will Turn Into a Rental House)

How I Evicted A Problem Tenant in 4 Steps

When to Hire a House Inspector – Radio Interview with Rich Peterson

Getting Rid of Bad Tenants

“Turn your home into a rental” on Mark Wayne Show

7 Reasons to Live in a Fixer-Upper House While You Repair It

6 Steps to Roof Maintenance (for the Home that will Turn Into a Rental House)

Our First Rental House Plunge

10 Most Frequent Problems Found by House Inspectors

5 Steps to Get Your House Ready to Rent by Terry Sprouse

Some perfectly legal ways to maximize your rental profits

Add “Start a Rental House Business” to Your Bucket List

The 5 Rules on How to Lose Money and Get Your Rental Property Trashed by Tenants

Window Repair with #2 Son

Required Roof Maintenance for Fixer Upper Houses

Learn to Repair Your Fixer Upper Houses

How I Got Started In Fixer-Upper Houses

How to learn to operate a fixer upper house business

The Peaceful Warrior and Fixer-Upper Houses

The 5 Rules on How to Lose Money and Get Your Rental Property Trashed by Tenants

Friday, August 10th, 2012

The Arizona Network of Real Estate invited me to give a presentation to their group about my book “Fix em Up Rent em Out.”

I thought the video might be available to the general public but it looks as though that’s not going to happen.

However, so that no one feels left out, I am going to provide  a summary of the key points that I hit during the presentation. As someone who was regularly picked last for teams in gym class, I’m sensitive to people feeling left out. Casting modesty to the wind, I am also including exclusive photos of the event.

So here are:

The 5 Rules on How to Lose Money and Get Your Rental Property Trashed by Tenants (based on an article by Andrew Stefanczyk)

1. Choose the Worst Possible Area

Location will determine the kinds of tenants you will attract, and how much rent you can fairly charge.

Do you want these bearded wonders as tenants?

The best approach is to identify target areas in your city where you would like to focus your purchases. I like to focus on “transition zones” (where there is a mixture of housing types) which are good for investors because we can purchase properties at lower prices, and there is high demand to live in these areas.

2. Put in the very best of things when fixing up  an investment property

Use new and expensive sinks, doors, refrigerators, light fixtures, etc. Never shop at stores that recycle construction supplies. Spare no  expense.

Of course, the problem is that tenants will not take care of our properties as well as we would,

Habitat Store

so we end up with many broken or worn out items. The better alternative is to shop at used building supply stores, and to purchase good, inexpensive, supplies for our rental houses. One such store is the Habitat for Humanity store.

3. Make sure you have absolutely no experience in make basic repairs

Not knowing how to change electrical outlets, unclog drains & toilets, and replace broken windows will cost quite a bit down the road.

The better way is to:

A. Learn as you go, and comply with EPA regulations

B. Take construction classes at junior college

C. Learn from handymen and contractors

D. Take the Zen approach to  house repair learn to do everything yourself

5. Utilize fix-up books, investing books, & YouTube to find answers on how to make house repairs

4. Do not screen your tenants

Being as uninformed as possible about who you rent to may be the best way to lose money as a landlord. Do not ask for or check references. Do not call previous landlords and ask questions like, did they pay rent on time? How was the condition of the house or apartment when they left? Did they ever disturb neighbors with loud music or shouting matches? How often would you have to make special trips for repairs? Being as uninformed as possible about whom you rent to will make a huge difference and will increase the chances that you will get tenants that will trash your property and refuse to pay rent.

However, the better way is to:

A. Use a checklist for tenants. Decide what kind of tenant that you want ahead of time.

B. Look at their paycheck to verify income.

C. Check county records to see what illegal activities they’ve been up to.

D. Know the Fair Housing Act. Never select tenants based strictly on “race, color, national origin, religion, sex, familial status or handicap (disability).”

E. To find new tenants, use Craiglist, put up arrow signs, and host an “open house.”

5. Make sure you have not learned about your rights as a landlord

Be completely unfamiliar with the eviction process to guarantee long, drawn out disputes with tenants. Don’t keep up to date financial records or copies of correspondence with tenants. Most states provide online information about tenant and landlord rights so avoid reading these.

The better way is:

A. Get an authoritative legal guide like  “The Arizona Landlord Deskbook” by Carlton Cassler.

B.  Copy forms and letters from your legal book to send to tenants.

C. Comply with legal ways to deal with bad tenants.

D. Use memos to communicate with tenants so you have a record of correspondence.

E. Use a month to month lease instead of long-term lease to more easily scrape off bad tenants like barnacles.

F. Reward tenants for paying on time by discounting their rent $25.  

G. Send good tenants Target  gift cards for Xmas.

In Conclusion

Share Your Knowledge

“Each of us has cause to think with deep gratitude of those who have lighted the flame within us.”

–Albert Schweitzer

Carve Out Your Niche Update

My award-winning book on self-publishing, Carve Out Your Niche, is now available in Kindle format.

The Midwest Book Review called Carve Out Your Niche,

“Invaluable for anyone seeking to successfully write, publish, and market their own work.”

 Related Posts

Remove that Garbarge Disposal Now!

Window Repair with #2 Son

Saturday, July 28th, 2012

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Last Saturday I took my 10-year-old son along with me to repair a window in one of our rental houses. I like to take one of my boys along so they can learn a thing or two about how to repair things, as well as so they can see how I deal with tenants, and, mainly so that we spend some time together and have fun together. I always try to make it fun for them. For example, we went to ACE Hardware to get a new window cut, we looked at the stuff he likes to see, like BB guns and rockets, and, I bought him a bag of Boston Baked Beans.

It was really a big help to have #2 son along. He not only does what I ask him to do, unlike his teenage brother “Mr. Cool Guy”, but he also brings an enthusiastic spirit to the endeavor. One of the first things I have to do is to chip out the old putty from around the window. It’s my least favorite part of the job since it involves a lot of tedious work. After I explain what I am going to do, my son responds. “Can I do it?” I say “okay, go at it,” but I’m thinking, “Well, if you really insist!” What is old hat to me is new and exciting to him.

When we arrived back from ACE with the new window, I accidentally broke the window as I took it out of the back seat of my pick-up. I thought it might discourage my son to head back to ACE again to buy another window, but his response was, “I need a refill on the Boston Baked Beans anyway.” After that the broken glass incident became a running gag with comments like “is it time to break the window again?” and “let’s break the window again and get some more Boston Baked Beans.”

I must admit, it’s not nearly as entertaining when I have to do those little repair jobs all by myself.

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Remove that Garbarge Disposal Now!

Required Roof Maintenance for Fixer Upper Houses

Monday, July 2nd, 2012

One of the jobs associated with operating a fixer upper and rental house business is to keep your rental properties in ship shape!

With the annual approach of summer rains, now is almost the last chance to make rental house roofs water proof before the watery onslaught. As someone who has a sworn aversion for arriving too early to parties, I subscribe to the time-tested philosophy of “better late than never.”

This morning I applied some black roofing cement on some areas on one of my townhouse roofs. I had located some cracks upon my inspection of it about 2 weeks ago.

The first photo shows the area in question, where I had previously applied a small amount of plastic roofing cement, but today I was going to put on some more and cover a broader area.

Before picture

The second photo shows the application of the plastic roofing cement. We apply one layer of cement, then put a white membrane on top of that, followed by a second layer of cement. The membrane allows for more cement to be applied.

Application of roofing cement

Below is the “after” photo. You can see that in addition to the corner, we hit a few other cracks with our roofing cement on the sides of theroof. Later, we’ll come back with white roofing paint to cover the black cement.

Completed repair

A good rental house

My wife and I purchased this 2 bed 2 bath townhouse in 1993 and lived in it for 10 years before moving on to a bigger house (to accomodate our growing family), and turning this property into a rental house in 2003.

Its been one of our best rental houses because it is in a “transition” zone (aka “opportunity zones”) where there is heavy demand for housing, and it is easy to care for because it is compact (1100 sq ft with small front and back yards). The townhouse perfect for single people or small families.

We originally purchased it for $53,000 and we charge $750/month (more if the tenants have pets).

Related Posts

Remove that Garbarge Disposal Now!

Learn to Repair Your Fixer Upper Houses

Tuesday, June 19th, 2012

Learn to Make Repairs

Never miss an opportunity to do your own repair work. To become an expert in the fix em up rent em out business, you must learn this. Think of it as part of your educational process. You lose two ways when you hire someone to do your work. First, you lose the chance of a free education, and second you lose the money that you would have saved by doing it yourself.

It may take you four hours to change an electrical receptacle or fix a toilet that won’t flush, something a professional could do in minutes. Don’t be concerned, in the long run you have learned a skill to be used for the rest of your life.

Trust Your Karma

After going through my explanation about how everyone can learn to repair a house, a friend of mine insisted that it was impossible for him to do fix-up work; it just wasn’t in his genes. I replied that his way of thinking was his dogma. My karma told me that he could do it. In time, little by little, he did learn to make repairs and he came to enjoy it, even relish it.
My karma ran over his dogma.

Work with a Handyman

Having said the above, I also think that you should have a good handyman to back you up. Although there are many things that you can learn to do, you also have to know your limitations. There will be times when you can’t make a complicated repair. Someone with experience must be called in. For many things you can be the expert, but for some things you can’t. Ideally you should establish a good working relationship with a true handyman that you trust and is available to help you out as needed, particularly in the first few years of your business. To keep costs reasonable, always pay contractors or handymen by the job and not by the hour.

Your attitude should be that you want to learn how to do everything yourself. You don’t learn to ride a bike by watching someone else do it. The only way to learn is by doing it yourself, and the more you do it, the better you will be at it like my first grout repair project, and when learning to lay tile. Practice doing all the steps in the process until it becomes second nature for you.

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Efficient Design – Green adds Green

Tuesday, January 17th, 2012

This is a guest post by: Erik Braunitzer of Douglas Elliman Real Estate Company, agents for NYC Apartments.

The bathroom is an essential part of most every home. However, the bathroom is also an area that is often neglected when it comes to creating an environmentally friendly and green space. Luckily, when designing or remodeling your home, the nation-wide renewed focus on green living has opened up an entire marketplace full of green items.

And what most homeowners and contractors don’t realize is that going green really boosts the value of your home. Things like geothermal heat, 95% efficient furnaces and walls made with reclaimed materials are just a few examples of expensive but worthwhile home investments. One of my favorite areas of focus is the bathroom.

Recycled Glass Tile: Tile is a commonly used throughout the bathroom, from floors and shower walls to backsplashes and accent work. Consider using recycled glass tiles, which come in a wide range of colors, shapes and sizes. Recycled glass tile is installed in the same manner as regular tile, and can come in pre-spaced squares allowing for easy installation and grouting.

Sustainable Harvested Woods: Wood is often used for vanities and even flooring for bathroom spaces. However, many wood products require the use of environmentally unfriendly or even illegal logging practices to supply the material. Choose products with a Forest Stewardship Council approved sticker on them, or choose more environmentally friendly products like bamboo, cork or wheat straw. Storm-feld tree products are also an option for a greener bathroom. Avoid wood products made from particle board, which often contains formaldehyde.

Recycled Metals: Recycled metals can be used in your bathroom from cabinet pulls to fixtures. Look for products such as recycled metal counter tops, vessel sinks made from recycled metal, recycled aluminum tiles, salvaged brass faucets, and recycled bronze metal hardware.

Composite Terrazzo: Another way to use recycled materials for vanity countertops is through composite terrazzo products. These counter tops are made from a wide range of different materials, such as recycled glass, which is then combined with an epoxy binder or cement to create the hard and formed surface of the countertop. Because there are different types and colors of materials used in each piece, you get a unique finished look to the product you install.

Salvaged Products: Whenever possible, try to use recycled salvaged products in your bathroom remodel. Often times home owners will get rid of light fixtures, cabinets or sinks that are still in style, but that do not fit their own current personal style. Purchasing these products from salvage stores reduces the chances that the product will find its way into a landfill, as well as can provide a unique or vintage look to your bathroom space.

Windows: Install windows in your bathroom to bring in natural light. The more natural light you have flowing into your bathroom, the more open it will feel and the less electricity you will need to use, which reduces your energy waste and brings down your electric bills. Install Energy Star rated windows to help reduce the loss of heat or cold air during the winter or summer months.

Toilet: Toilets make up a significant portion of water usage in most households. Each flush can waste gallons of water, even though newer toilet designs can provide the same performance with less water. Look for toilets made to the HET Standard (or High Efficiency Toilet) which guarantees you’ll be using less water with each flush.

While these steps may seem small, every choice helps create a better world for you, your family and generations to come. By making these simple choices, you can make a positive impact on the environment, all without sacrificing style or function in your bathroom.

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Fix em up Rent em Out

Avoid Perfectionism with Fixer Upper Houses

Wednesday, July 6th, 2011

Govern a great nation as you would cook a small fish. Do not overdo it.
–Lao Tzu

A key to fixing up a house is to know when to stop fixing up. You want the house to look good, yet you know that people are not going to care for your house the same way that you would. For rental properties, I don’t purchase the most costly, or even new, materials. I do a lot of my shopping at stores that recycle construction materials, like Habitat for Humanity’s Re-stores. You can get bargain basement prices on things like doors, kitchen cabinets, hinges, toilets, paint.

Need I say more? It’s a fixer-upper person’s paradise.

If I know that I am going to sell the house I may install higher grade of materials, especially where it really counts, like the kitchens and bathrooms. As Lawrence Dworin says in Profits in Buying & Renovating Homes:

“It’s easy to get carried away on renovation projects – wasting time and money on repairs that buyers won’t pay extra for. I assume you like to do good work. We all do. And we’d like every finished project to be a showplace. But you can’t make money that way. Your buyers have a limit on what they’re willing to pay. That’s why you’ve got to limit repair costs. In this business, you concentrate on fixing code violations and creating a clean, safe, livable house.”

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Getting Started with Fixer Upper & Rental Houses (Video)

Friday, September 10th, 2010

I think that buying fixer upper houses and turning them into rental properties is the easiest way to make money in real estate. You can do it in your spare time and still work your 8:00 to 5:00 job. And, rental houses can create a steady new income stream, that could even allow you to retire from your regular job, as I did.

This video which provides a general overview of the process for starting up a fixer upper and rental house business.

Welcome to my new ‘fixer upper and rental house’ blog home!

Friday, May 7th, 2010

Welcome to my new website.

Make yourself right at home. Pull up a chair, have a cup of coffee, and check out some of my articles, useful links, or previous posts. Hopefully, you’ll discover some useful investing information.

To keep you in the loop, I am developing some new resource materials to help you get started in the house fixer-upper and rental business.

First and foremost, I am putting the finishing touches on my new book entitled “Never Sell Your Home! How to turn your home into a rental house.” Watch this space for further developments.

Even with rising interest rates, now is still a good time for do-it-yourselfers to start a new income stream with a rental house or two. House prices are still at rock bottom lows, but before too long they will start moving up again.

The key is to find a good fixer-upper house in a location where people like to rent. It’s still the best way to start your own business, and establish some long-term economic security!

Sometimes going through tough economic times is just the push that we need to start on a new path.

When tough times hit, I like to reflect on Lincoln’s saying, “We can complain that the rose bushes have thorns, or we can rejoice that the thorn bushes have roses.”