cpadpl,

Dennis hit the nail on the head on many things. I am 29 years old. I work at it 7 days a week and it is stressful. But it is better than cleaning carpet which is what I did from age 18-25.

I have migrated away from rentals and gotten more in to flippers. It is also stressful. But if I can continue at the rate I am going, I will be a millionaire by age 35, not including my $500K in equity in the duplexes I own. I get up every day at around 5am and get home every night around 8pm. But I figure when I get tired of that schedule I will be alright financially.

Then I will have to discuss stock and other investments with you and Dennis. Right now all I have is a wimpy mutual that is dispursed in to a little of everything. I throw $100 a month at it. My financial planner guy said don't worry about it for the next twenty years or so.

My step-father taught me everything I know about real estate. He is a hard core investor. He never once helped me, only taught me. I have made every deal I have ever done.

I really really enjoy real estate. I would get up in the middle of the night to do a deal.

I feel that multiunits are the best money makers. Single families can provide some income especially if bought right. Buy a junky one and fix it up. For the most part money is made when it's time to sell on single family homes. That is one reason I am fixing up the two I have to sell them, even though I could rent them for around $1200 per month.

Semi gloss paint is the way to go. So is ceramic tile countertops, with brown grout. If you purchase a new air handler, request an AWB model, the coil is front mounted with front access so you can clean the coil yourself very easily. I paint doors brown too. The less carpet the better, I only carpet bedrooms now. I use ceramic tile or VCT in all other rooms depending on the unit. Use real wood cabinets, no particle board. Buy nice used appliances. Use good caulk and the longest screws you can use on things, no nails. Do not buy locking front door *****, use hall and closet doorknobs and deadbolts on the front doors or you will have neverending key problems.

I love it!

 

Seacrow,

What brand of A/C do you prefer? Lately, I've been going with Rheem because the condenser is quiet and the units are efficient. There are cheaper models around, but I'm hoping Rheem will be a selling point. Electricity is very expensive here, running around $0.18 per kwh, depending on how much you use. Good advice about the evap coil. You and I know, tenants will not replace the filters and if they do, they will not spend the money on buying high efficiency pleated filters.

Hmmm... Never thought about the entry lock situation. I think it's brilliant. I never thought of that. When a tenant moves out, I have a minimum of 4 cylinders to get rekeyed. I went with Schlage so I can have a master. It's what I had in my stores, so I stuck with it for my houses.

No doubt you will be a millionaire soon if you aren't already. It took my parents until I went to college for them to really get into real estate. They had property here, in Las Vegas, and Aspen. They also had a lot of luck in that they got into it just when we had a major period of growth. They worked very hard to send two kids to college and pay for all their properties.

It took me 15 years to get to where I think you are now. When I retired at 16 years, I took everything I made and put it into more real estate and the stock market.

I'm not an active trader in the market anymore. Getting up at 2 a.m. gets tiring real quick. These days, I just look for bargains like the airline stocks after 9/11/01. I even have a ton of KMart. At 50 cents a share, I can afford to lose a few grand if they belly up and disappear. If they survive and come out as a stronger company after bankruptcy...

Trading was really nuts for a while. I once bought, sold, and shorted a stock over 75 times in one period. I used to watch CNBC and would buy a stock of some guest they were going to have on. 4 out of 5 times, I could sell that stock at a nice profit by the time the interview ended.

Now, can anybody tell me when we are going to attack Iraq? I need to know so I can sell my UAL stock before that happens.

 

GET A LAWYER to help you write a contract!! Believe me my mom has has a rental property since i was born and it has been nothing but hell since the people that rented it for 7 years left. The law is on the TENANTS side BELIEVE ME!

Be sure to include in the contract:
1) any legal fees you go through because of the tenants actions or lack thereof must be paid for by the tenant
2)as you said earlier, the tenant is responsible for any laws that are broken, including drug related.
3)Have them give you a $1000 depository check incase anything is broken, or rent isnt paid and they feel its necesary to move out and cease contact with you, be sure to include that if all goes well the money will be returned to them.
4) tell the tenant that anything broken is their responsibility to fix, although you must realize that some situations do give cause for you to be responsible, such as a broken water heater, furnace, and pretty much anything like that which was in the house when they moved in. BUT if something like shelves, or a door etc. is broken because of the actions of the tenants it is their responsibility to ave fixed.

There are many other things that must be addressed but those are all very important ones right there

Be sure to do a VERY thorough background check on each and every person that is going to reside there, whether it be the tenant or not. For example: Someone rents the house and their girlfriend or boyfriend will be staying there, ask for any and all background information on the girlfriend or boyfriend, be sure to include that this is necesary in the contract.

Again i definitly did not address all of the aspects that you need to cover, but this should give you a start. Renting property can be a very prosperous investment, but be sure you dont get ****ed over in the process.

 

Dennis,

You may not want to hear this but I don't care for Ruud/Rheem units for a couple of reasons. ONe is that the evaporator coil is usually mounted above the blower motor in the air handler. This makes it very hard to clean and if the drain clogs, the pan will overflow on to the blower motor. The condensers are usually armored or covered with "grated" metal around the condenser coil. They usually aim the fins downward so the condenser fan sucks leaves, lawn trimmings, bugs and all other kinds of crap up in to the condenser coil and clogs it up. I have to hose out my Ruud/Rheem condensers about twice a year. You should see the crap that runs out of the bottom when I do.

Any condenser with a rotary or scroll compressor will be quiet. Also, unarmored condensers are usually quieter because there is less sheet metal to rattle loose. However, this can be solved with a few extra screws in certain places.

Efficiency is rated on AC's by EER or SEER. The bigger the SEER number the more efficient it is. Usually this has more to do with the condenser. The SEER rating of a condenser can be a combination of lower speed fan motors, different pitch fan blades, scroll compressors and most often larger condenser coils. Larger condenser coils help the most since it allows quicker dispersion of heat to outside air with the same amount of energy used by the compressor. The cooling process occurs quicker this way.

The most efficient way IMO to cool a place is to get an air handler that is one half ton bigger than the condenser rating and get a 12-14 SEER condenser. I installed a 5 ton air handler in my house with a 14 SEER 4 ton heat pump. I have about a 2000 square foot house. I can set my AC at 69 at night and 75 during the day for less money than my old 10 SEER 3.5 ton system.

There are also some really cool air handlers now that work in stages. There are others that accept two condensers and can run both or one based on need. REally cool stuff. But not for rentals.

A digital thermostat does a lot of good too. Proper insulation and aiming the AC grilles to the farthest point of the room is also helpful. Most people overlook this.

IN Florida Frigidaire or Tappan are identical and offer the best warranties and neat installations. I use Gibson (made by same company) air handlers in duplexes. They are the AWB style with the front panel that comes off for easy coild maintenance. The can be set or hung several different ways and are very easy to install. Gibson condensers are also good and are the quietest I've heard. Ruud/Rheem is a good selling point though, name recognition like Carrier and they don't make dishwashers and ranges and all kinds of other stuff.

I buy deadbolts keyed the same 4-6 at a time so I never seem to run out of keys and don't have to keep track of so many different keys. When I have move outs I only switch the deadbolts around amongst vacancies if needed. It's nice only having to switch the deadbolts. The same hall closet ***** have been on for years.

 

Dennis, I used to be fascinated with day trading until I met a guy that had four computers that ran constantly. He sat in front of them 16 hours a day and watched CNBC on TV and listened to some other market news on AM radio. All at the same time.

I was then horrified by day traders.

I still don't know a whole lot about the stock market. Buy low sell high seems to be the trick. I don't have time to follow it and too many people have told me to be a long hauler and as I get older maybe throw a few thousand around here and there buying low. Such as your K-Mart stock you spoke of.

With the money I've spent at Lowe's and Home Depot this year, I am expecting some stock from them for Christmas.

 

Seacrow,

Unfortunately, your favorite brand is not sold here. Choices are very limited. Rheem, Carrier, Trane, Lennox, and Janitrol is about all there is for central a/c here.

I know what you mean about condensers sucking up yard junk. The latest installation, we mounted all five condensers on a concrete pad and fenced the whole thing in with the lower part pretty much sealed off. The other house, I have the three condensers in two locations on small pads. I then spread gravel around the pads and landscaped around the two installations.

Another house, I have a 2-speed Janitrol. Hey, it was cheap... Sounds like a damned jet engine, though. That one really sucked up trash because the fan was just so damned big.

I've been really intrigued by the high velocity a/c air handlers where the air vents are just little round things in the ceiling. Uses really small ducting and it's supposed to be great at dehumidifying air, so would be good for places like we live in. So far, nobody I know has this kind of air handler. Have you seen this kind of system?

 

Yeppers, that was me a while back, although I did it with just two computers, two televisions, two phone lines, one fax, and a cellphone. My trading friends, a couple, had three computers EACH!!! In one room! We pretty much followed trends. The only stocks I ever held were my Dell which I eventually dumped in 2000, my BYD which I bought for under 3 and still hold, and my 2 shares of BRKa which I also still hold. The BYD and BRKa are the only stocks I allowed myself to get attached to.

These days, I only buy stocks that used to be worth at least 10 and are now selling for less than half that. I especially like the airline stocks. I predict they will continue to go up until Bush decides to invade Iraq. When that happens, I will dump and short because airline stocks will fall. I figure all the talk about invading Iraq will quiet down now that this election cycle is over. I'm expecting it to come up again a few months before the next election cycle starts up again.

I first started trading when I was in high school back in the early 70s when the Dow was under 1,000. I think it was in the 700 range at that time. The head of the local EF Hutton came to talk to my class one day. I got my mom to open an account for me the next week. My biggest profit was made from selling the shares in a locally owned savings and loan for 8 to 12 and sold it for 125 a share when it got bought out by a bigger bank. Then I bought another family owned savings & loan for 11 and sold it for 45 when it merged with another S&L. I pretty much laid off trading when I went to college and started up again when I graduated and got a job, just dabbling here and there until I got close to retiring.

When I retired, I devoted more time to it. Then I went totally nuts when online trading happened along at just the right time.

You are way ahead of where I was when I was 29. Have you decided when you are going to retire? I was forced to retire by my doctor. He said, "Retire or you will need surgery on your back or you will be crippled in less than 2 years." Well, I didn't need to be told twice.

 

Dennis,

It sounds like you know a lot about what's available in your area. It helps a lot to know about AC. Janitrol is the Chevy of the AC world. They make some other names like TempStar and Heil. Janitrols aren't really too bad for the prices.

I haven't heard of the high velocity AC's yet, but I have heard of a system that uses one condenser and one seperate air handler in each room. Small quiet air handlers that can all be set at different temps and fan speeds. You can run electric heat in one room and have another room at 50 degrees.

I don't have retirement plans just yet. It has taken me five years to get all of the rentals rehabbed and running smooth. When I get these three flipper houses done, which should be by Thanksgiving, I am gonna take a six month break. I'll get the sales under my belt and get caught up on my honey do list at home.

I am also gonna go pick up a Bose Lifestyles home theater system as a small reward to myself.

I have worked seven days a week since August first. I couldn't even tell you what comes on TV anymore. Surfing the net is about all I do other than work. I deserve to sit in my chair for a day, enjoying my Counting Crows CD collection on a new Bose system. I have never figured out my Pioneer system anyway.

 

Seacrow,

You're gonna love the Bose. Good friends of mine have one hooked up to a plasma screen on their master bedroom wall. The sound is incredible. Those tiny speakers are awesome.

I don't know if I had ever said it here before or not, but there was a time when I actually worked over 16 hours a day, 7 days a week without a vacation for 3 or 4 years straight. On weekdays, I'd be out of the house by 8:00 am. I wouldn't get home until midnight. 3 or 4 times a week, I'd have to catch a plane in the morning and fly home in the evening. Know, what? All that hard work and stress paid off in the end. I'm sure you can see how it will pay off for you too.

You're talking about a ductless split a/c system. They're ideal for installation in older homes where there isn't any ducting and the electrical, refrigerant, and drain lines all fit through a round 4" or smaller hole in the wall. They're also ideal for installation in secure rooms. Nobody human can get through the hole in the wall.

We've been using them here for years. The first brands to hit our area were Mitsubishi (Japan) and Daikin (Thailand, if I recall correctly). Now all kinds of brands are available. Carrier, Friedrich, Sanyo, Lennox, etc.

The big disadvantage is the price. They are very expensive. Costs about $1500 for a single room (3/4 ton). Multi-split systems might run about $1000 per room. You're looking closer to $2,000 for a 1 ton unit. I've seen some that go up to 4 tons, but they are all ceiling units and really big.

They even have units that mount flush in the ceiling that are really slick. The Mitsubishi model has 4 ducts, one on each side of the square unit, that are individually adjustable (swing, close/far, off/on) with a remote control. The major disadvantage, at least in my mind, is the condensate is removed via a pump. I shudder to think what would happen if the pump were to fail.

The other thing is the wall units have really long squirrel cage blowers. I've seen some where the blowers are more than a foot wide on each side of the motor. They require careful cleaning otherwise, the dust will throw them off balance. The filters leave a lot to be desired, too. They're no better than the filters you find in a window a/c.

The Janitrol has been dependable. It cost just $3,500 for a 4 ton unit installed in a house that didn't have any ducting. The house is about 3,000 sq. ft. and luckily, the layout allowed the cooling of the kitchen and dining room by installing the vents in the opposite wall of the living room. If they couldn't have done it that way, it would have meant the installation of another unit for the kitchen/dining room area because the living room which divided the house has a vaulted ceiling. If we had used a ductless split system, it would have cost over $6,000 to do the whole house.

The only reason I haven't used Janitrol since is because of the noisy condenser. Stick your head over the exhaust of the Janitrol and it'll blow your hair straight up, compared to the sedate Rheem. I swear you can see the leaves of the tree 20 feet above it blowing around. I can even hear the Janitrol through the windowless insulated stucco'd wall.