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Good info thanks guys, especially zippy and bo. I've decided to seek additional bids as I did some research and the cost of the first bid seemed high, and the plumber seemed like a shyster to an extent, asking me if I owed anything on it, how much I would accept for a a sale because he might buy it, etc.
I don't think it's a terrible strategy to list it for now and see if I can get a cash offer (not uncommon in this area). Even accounting for the repairs and then some, I would still be getting twice what I paid for it not even counting the rents after typical expenses (not cap ex).
If push comes to shove and no one makes an offer or everyone needs financing but can't get it due to the pipes, I'll spring for the fix. Especially if I can get it for 1.5-2K range. Sadly that doesn't count drywall and other repair after they are done. Ugh. I really wish I had sold it a year ago. I thought about it, but figured, why sell now? Had the same issue with a truck. Spent a ton of money fixing it up, then thought, you know it's getting high mileage, I could sell now while it's fixed up. Nope. Blew a head gasket months later sitting in traffic and sold it at a huge loss. Luckily even a flipper/investor would give me huge profits as is.
The roof doesn't and has not leaked. I think I can get the roof to pass like this. In some ways this is good practice for house flipping since I've been considering getting into it. In other ways it really sucks to have this happen like this. At least the house was vacant (though heated) when it happened. Imagine if I had a tenant in there...Yikes. Big problem.
If push comes to shove and no one makes an offer or everyone needs financing but can't get it due to the pipes, I'll spring for the fix. Especially if I can get it for 1.5-2K range. Sadly that doesn't count drywall and other repair after they are done.
I realized I needed a re-pipe 4-5 years before I planned to sell my house, so I went ahead and just had it done. Not only did I have ample time to repaint the drywall repairs, but I had a few years to enjoy my new plumbing particularly since I chose to replace all the fixtures with top-of-the-line modern fixtures (like single handle bathroom and kitchen faucets).
I suggest that anybody who has settled on a future sale of their property should begin planning 3-5 years out, and get some enjoyment of your upgrades before you sell.
Have you calculated the cap rate after all repair were to be done? How much would you save in taxes if you sold today versus next year or two? Based on what you've posted , it would be considered a good investment to keep even if you had to hire someone to manage it.
Have you calculated the cap rate after all repair were to be done? How much would you save in taxes if you sold today versus next year or two? Based on what you've posted , it would be considered a good investment to keep even if you had to hire someone to manage it.
Not sure how anyone could come to such a conclusion. I never mentioned the value of the home, just the cash flow. Cap rate is calculated by knowing both and the cap rate drops after these repairs. The cap rate is going so low that after repairs it would be more money to stick the proceeds in an index fund, and much less hassle. Add a property manager and it's so low I might as well give my money away...I don't know why you think management is the issue here. It's been clearly stated repeatedly that the major capex is getting to be too much, and your solution is to add more to the expenses by hiring a manager with a ridiculous fee who is also going to hire whoever to fix xyz issues without regard to cost?
Not sure how anyone could come to such a conclusion. I never mentioned the value of the home, just the cash flow. Cap rate is calculated by knowing both and the cap rate drops after these repairs. The cap rate is going so low that after repairs it would be more money to stick the proceeds in an index fund, and much less hassle. Add a property manager and it's so low I might as well give my money away...I don't know why you think management is the issue here. It's been clearly stated repeatedly that the major capex is getting to be too much, and your solution is to add more to the expenses by hiring a manager with a ridiculous fee who is also going to hire whoever to fix xyz issues without regard to cost?
I think areas that have good appreciation is a good investments.
How is the property manager you would hire going to be different than the one in a REIT? Do their managers charge ridiculous fees too?
If you put your cap ex money in the index fund instead for higher returns, would they be higher than projected appreciation, you already stated the property double in value. Most parts of the country don't see that type of appreciation.
And you worry about capex but consider getting into flipping?
I have no idea of the cap rate, I asked if you have calculated it? I didn't ask what it was because it doesn't matter to me.
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