Any of you hunks purchased property and renovated it yourself?

[Dalnet]

One of my first rentals many years ago was to a young couple with a 2 year old. Both had good jobs, dressed nice and had amazing credit.

About 6 months into the lease a hurricane came through the area (Houston) and damaged the roof a little. They had a small leak in one of the spare bedrooms that the husband used for an office.

I showed up two days later expecting a little water damage, which there was. But the entire room was filled with half empty disposable cups filled with milk or juice and a few dozen half empty plates of food. The room was filled with flies and a disgusting smell. Most of these items had been there for months. It was unbelievable.

They didn't even act like it was a big deal, but it was the most disgusting thing i had seen or smelt in years. I made a big deal out of it and told them they had 24 hours to sanitize the room or i would evict them.

It was weird because the rest of the house was very clean, but that office was filthy.

People are weird and many people have disgusting habits. If it weren't for the easy money i'd never rent out a house again in my life.

Can relate. I used to work for a landlord in the HMO game (house of multiple occupancy) - basically people on benefits/assistance that are homeless get housing and you get 253 per bedroom per week from the council for the tenant. Now, imagine there's a 5 bedroom house that's 253x5 per week. X4 per month. You're talking 5k per month. Obviously subtract the bills, electric, gas, council tax and the like. Great investment. The downside is: you're putting up with the lowest of the low. Sometimes we'd come into rooms with needles discarded all over the floor. They get given sharps boxes to put needles in at the clinics - so not sure why they couldn't use them.

Oh - open bottles of piss left out because they're too fucked up to stagger to the toilets. Mould growing on top of the urine that's how long some of the shit had been there.

Plates of food left all over the shop going green... Seriously. That's without all the anti-social behaviour crap.

Basically - 1k a month per person for a little room in a house the government pays HMO landlords. One of his properties had 12 bedrooms that's 12k per month he was getting on that property. Crazy. And there's no shortage of junkies/down and outs.

[ProudVirgin69]

Basically - 1k a month per person for a little room in a house the government pays HMO landlords. One of his properties had 12 bedrooms that's 12k per month he was getting on that property. Crazy. And there's no shortage of junkies/down and outs.

on a similar note, I've thought halfway houses are a pretty good opportunity.  In the US, it's where you go after inpatient drug rehab and it's often court-ordered.  There's not enough of these places to go around, so they are in high demand.  There's typically a 'house leader' who manages the place in exchange for free housing, and this individual sets & enforces the rules.

Frequent drug tests, chore requirements, curfews keep the living situation orderly.  Tenants are typically highly motivated to follow the rules, as they can be forced to leave on short notice for rule infractions.

[IroNat]

Not worth the headache unless the cash flow is extreme.

After all is said and done you're better off putting your money in a very low expense equity index fund.

[Dalnet]

on a similar note, I've thought halfway houses are a pretty good opportunity.  In the US, it's where you go after inpatient drug rehab and it's often court-ordered.  There's not enough of these places to go around, so they are in high demand.  There's typically a 'house leader' who manages the place in exchange for free housing, and this individual sets & enforces the rules.

Frequent drug tests, chore requirements, curfews keep the living situation orderly.  Tenants are typically highly motivated to follow the rules, as they can be forced to leave on short notice for rule infractions.

This isn't too dissimilar from that. He hires "Support Workers" which are supposed to check in with the 'residents' and do support plans such as help towards finding drug resources/job resources and the like. Even help with filling out forms and taking time to do 'action plans' or taking them to do shopping, or giving those little red food vouchers they can take to food banks. Trouble is: Support Workers are on minimum pay and get given 35-50 residents to take care of (say 6 properties on average) - so imagine the council says you're supposed to give 1 hour of support per resident. You're only contracted for say 40 hours per week - how does that cover travel time to properties, dealing with fire alarm checks, fire door checks, utility checks, meter reads etc etc on top of giving support? It doesn't add up. The guy I worked for was a greedy girl. I left after 3 years (I wasn't doing support side tbh I couldn't do that thankless task and deal with junkies all day every day just lol)

There's great money to be made but you've got to basically fraud it (the paperwork) and blag your way through it to get the money by not providing real 'support'. I know a guy that started out with nothing - from a minimum wage job as a support worker fresh out of prison. We gave him a start with us and subcontracted him through our company (as we had the contract for the RSL [registered social landlord] and now he's got 6 properties of his own pulling in 30-40k per month. He brought his brother in 50/50 and they're doing well just bought his mother a house and moved her out of a shitty area. Ex con to a few hundred thousand in a matter of a couple of years just by getting in the HMO game.

I like the sound of your end of things in terms of curfews and drug tests because you're right: it's mainly alcohol/drugs which cause 90% of the maintenance issues and damage because of these crazy nutters going psycho when high. The best situation would be a 36/40/50 room ex-hotel that you could get 50k in per month and just hire 24/7 security, as well as on site support workers. Pure profit and one building to deal with rather than individual properties.

[Phantom Spunker]

One of my first rentals many years ago was to a young couple with a 2 year old. Both had good jobs, dressed nice and had amazing credit.

About 6 months into the lease a hurricane came through the area (Houston) and damaged the roof a little. They had a small leak in one of the spare bedrooms that the husband used for an office.

I showed up two days later expecting a little water damage, which there was. But the entire room was filled with half empty disposable cups filled with milk or juice and a few dozen half empty plates of food. The room was filled with flies and a disgusting smell. Most of these items had been there for months. It was unbelievable.

They didn't even act like it was a big deal, but it was the most disgusting thing i had seen or smelt in years. I made a big deal out of it and told them they had 24 hours to sanitize the room or i would evict them.

It was weird because the rest of the house was very clean, but that office was filthy.

People are weird and many people have disgusting habits. If it weren't for the easy money i'd never rent out a house again in my life.

This is my fear and, yeah, people are fucking pigs. I'm already regretting having a kid in the place. But It's good in a way because it forces me to examine when I'm being a prick and contradicting myself (I used to have a nightmare renting as a student because I had a dog). I've just said 'fuck it' and said yes to kids and pets. In retrospect, though, I shouldn't have furnished it with things that I really like, as I'm already fond of them and I'll be pissed off when they inevitably get damaged. Everything is insured, though.

Not worth the headache unless the cash flow is extreme.

After all is said and done you're better off putting your money in a very low expense equity index fund.

This is what I intend to do, mate. I've been getting advice on it and the money will likely go into that. The place is in a good area and the prices are continuing to shoot up. There's a good uni, a medical college, and a good kid's school nearby, so the rental market is really strong. A lot of the students here are millionaires from abroad. I had three of them offer six months' rent up front, but one was a fat Indian guy and the other two were weird as fuck. No deal.

[BayGBM]

Is it a total nightmare? Specifically, could the average spaz (e.g. me) fix things like damp internal walls, replace floors, and maybe do some roof tiling? Can I realistically just YouTube it and give it a go or will I end up spending a fortune?

Date a contractor.  That’s what I did.  Seriously. 

He was an electrician by training but he could do carpentry, plumbing, design—everything.  He even had all his own tools.  I paid for all the materials and compensated him the way he liked to be compensated. 

[Phantom Spunker]

Date a contractor.  That’s what I did.  Seriously. 

He was an electrician by training but he could do carpentry, plumbing, design—everything.  He even had all his own tools.  I paid for all the materials and compensated him the way he liked to be compensated. 

Hahaha. Mild flirting to score a bargain is as far as I'll ever go!

[Humble Narcissist]

Date a contractor.  That’s what I did.  Seriously. 

He was an electrician by training but he could do carpentry, plumbing, design—everything.  He even had all his own tools.  I paid for all the materials and compensated him the way he liked to be compensated. 

Are there female contractors?

[IroNat]

Are there female contractors?

They're called "Hookers".

[ThisisOverload]

Can relate. I used to work for a landlord in the HMO game (house of multiple occupancy) - basically people on benefits/assistance that are homeless get housing and you get 253 per bedroom per week from the council for the tenant. Now, imagine there's a 5 bedroom house that's 253x5 per week. X4 per month. You're talking 5k per month. Obviously subtract the bills, electric, gas, council tax and the like. Great investment. The downside is: you're putting up with the lowest of the low. Sometimes we'd come into rooms with needles discarded all over the floor. They get given sharps boxes to put needles in at the clinics - so not sure why they couldn't use them.

Oh - open bottles of piss left out because they're too fucked up to stagger to the toilets. Mould growing on top of the urine that's how long some of the shit had been there.

Plates of food left all over the shop going green... Seriously. That's without all the anti-social behaviour crap.

Basically - 1k a month per person for a little room in a house the government pays HMO landlords. One of his properties had 12 bedrooms that's 12k per month he was getting on that property. Crazy. And there's no shortage of junkies/down and outs.

I'd never get into something like that. But i have large deposits and everything is written into my contracts.

Years ago, i owned a property next to a subdivision that had a handful of halfway houses. Cop were called almost every weekend and it was crazy drama. The neighbors to these houses had to deal with constant drug problems and violence. I'd never want to be near one, as i've seen all of them be a complete disaster.

I've seen some nasty stuff in my rentals, but all my leases have very strict language on pets, kids and general cleanliness. Most people don't read them closely and act surprised when they don't get their deposit back. But i have become very strict over the years. Also, i do quarterly inspections and also short notice inspections.

If you can manage the properties well it's easy money.

[ThisisOverload]

Not worth the headache unless the cash flow is extreme.

After all is said and done you're better off putting your money in a very low expense equity index fund.

Sheeeeit.

My houses have outpaced any index fund i've ever had, by a shitload.

It's not the rent, it's the sale at the end.

Plus, it's all cash, and i can turn it 2-3 times a year.

[ThisisOverload]

This is my fear and, yeah, people are fucking pigs. I'm already regretting having a kid in the place. But It's good in a way because it forces me to examine when I'm being a prick and contradicting myself (I used to have a nightmare renting as a student because I had a dog). I've just said 'fuck it' and said yes to kids and pets. In retrospect, though, I shouldn't have furnished it with things that I really like, as I'm already fond of them and I'll be pissed off when they inevitably get damaged. Everything is insured, though.

Yeah, it's a learning experience. Most of my rentals were in college towns, very expensive colleges. In areas of good development and high economic profiles. I've worked in land development most of my career, i know all the tricks.

Rich parents have always made it easy for me. I stayed away from other areas.

Kids are 10x worse than animals, most of the time. But i don't allow large dogs anymore. 20 pounds and less.

I've gotten really strict over the years, if i was presented my lease agreement, i wouldn't sign it.

[IroNat]

Sheeeeit.

My houses have outpaced any index fund i've ever had, by a shitload.

It's not the rent, it's the sale at the end.

Plus, it's all cash, and i can turn it 2-3 times a year.

Tio,

Been through the wars like you.

Glad it works for you.  Did you sell your properties yet?  The taxman cometh.  All that recaptured depreciation.  When you say "turn it 2-3 times a year" what do you mean?  I did it for 25 years and made money.  However, if I figured in my time it was like earning a decent wage.  Not bad but hardly free money.  A part-time job.

People think they buy a rental and it just free money.  I rent a house at the shore for a couple weeks a year.  The double house next door is half rental.  The owner is there "enjoying" his property on the weekends and spending most of his time fixing things.  His family is having fun while he fixes.  Presumably he has a regular residence in his hometown to keep up too.  Probably has a few hundred grand invested and after 30 years he sells it for twice what he paid.  Now discount that by his elbow grease and time and the taxman.  Not great.

When it runs smooth it's great until it isn't then a pain in the ass until it's smooth until it's a pain the ass...etc.

It is a way to create wealth like a small business which is also a pain in the ass.  It is a way.

You can create wealth from nothing if you are in the right place at the right time or have a method.
There was a time I had a method and was creating money out of thin air it seemed.

Most small operators don't make much when they factor in the cost of their labor and headache time, such as lawyer fees, repairs, upkeep, time spent in court for evictions, stress, etc.

Some (most) of the people in this thread getting into it will make only headaches.

An index fund like Vanguard TSM has grown 8-10% a year over time plus 2% dividends and you don't do a thing.

Owning rental r/e is a part-time job.  If you are highly leveraged your cash flow is minimal.  If you are not and have a lot of equity then the cost of your capital invested lowers your return but your cash flow is good.

Appreciation depends on location and timing and what you paid going in.  The big money is made going in or if you are in a super hot market and you can flip before the market turns.

What would I do if I could do over?  Buy as many shares of Berkshire Hathaway as I could 40 years ago.  One share then was about $5k and now it's worth $1 million.

[Flexacon]

This isn't too dissimilar from that. He hires "Support Workers" which are supposed to check in with the 'residents' and do support plans such as help towards finding drug resources/job resources and the like. Even help with filling out forms and taking time to do 'action plans' or taking them to do shopping, or giving those little red food vouchers they can take to food banks. Trouble is: Support Workers are on minimum pay and get given 35-50 residents to take care of (say 6 properties on average) - so imagine the council says you're supposed to give 1 hour of support per resident. You're only contracted for say 40 hours per week - how does that cover travel time to properties, dealing with fire alarm checks, fire door checks, utility checks, meter reads etc etc on top of giving support? It doesn't add up. The guy I worked for was a greedy girl. I left after 3 years (I wasn't doing support side tbh I couldn't do that thankless task and deal with junkies all day every day just lol)

There's great money to be made but you've got to basically fraud it (the paperwork) and blag your way through it to get the money by not providing real 'support'. I know a guy that started out with nothing - from a minimum wage job as a support worker fresh out of prison. We gave him a start with us and subcontracted him through our company (as we had the contract for the RSL [registered social landlord] and now he's got 6 properties of his own pulling in 30-40k per month. He brought his brother in 50/50 and they're doing well just bought his mother a house and moved her out of a shitty area. Ex con to a few hundred thousand in a matter of a couple of years just by getting in the HMO game.

I like the sound of your end of things in terms of curfews and drug tests because you're right: it's mainly alcohol/drugs which cause 90% of the maintenance issues and damage because of these crazy nutters going psycho when high. The best situation would be a 36/40/50 room ex-hotel that you could get 50k in per month and just hire 24/7 security, as well as on site support workers. Pure profit and one building to deal with rather than individual properties.

There are far easier ways of doing it in the UK.

You can buy a property and pass it onto a housing association to manage and they give you a guaranteed rent. There is no commission, no void periods, no tenants to deal with, no refurb or repairs to do, they handle everything. You just give them a habitable property and that's it. Easiest money you can possibly make.

Obviously this only works where there are a shortage of social housing (London mostly) so you'll need a fair amount of £££ to get started.

[Never1AShow]

Good idea to apply the DIY philosophy to all areas of your life.  Be you own doctor and dentist.  Fix your own car.  If you get in trouble with the law, represent yourself.

[The Scott]

Are there female contractors?

They're called "Hookers".

    Thanks gentlemen!

[Tapeworm]

Good idea to apply the DIY philosophy to all areas of your life.  Be you own doctor and dentist.  Fix your own car.  If you get in trouble with the law, represent yourself.

Insofar as you're able, yeah. Most people have no interest in nutrition or how things work or learning anything. They're content to throw Big Macs down their necks then be all "That's my cardiologist's problem."

Too many people trying too hard isn't the cause of the world's woes. Have you been to the mall? Holy useless eaters, Batman.

[Humble Narcissist]

They're called "Hookers".

Different type of job working with pipes.

[ProudVirgin69]

Not worth the headache unless the cash flow is extreme.

After all is said and done you're better off putting your money in a very low expense equity index fund.

generally speaking, yes.  My day job is as a carpenter/remodeler so I can do most of this stuff myself, I can't imagine how it would be profitable if you had to pay someone to do everything for you.

It's nice to have cash flow from rent AND asset value appreciation, and the tax law is quite favorable to real estate investors, but if I was to sit down and bill out my time to myself like I do for customers, I don't think I'd be much exceeding the ROI I'd get from an index fund. 

[ThisisOverload]

Tio,

Been through the wars like you.

Glad it works for you.  Did you sell your properties yet?  The taxman cometh.  All that recaptured depreciation.  When you say "turn it 2-3 times a year" what do you mean?  I did it for 25 years and made money.  However, if I figured in my time it was like earning a decent wage.  Not bad but hardly free money.  A part-time job.

People think they buy a rental and it just free money.  I rent a house at the shore for a couple weeks a year.  The double house next door is half rental.  The owner is there "enjoying" his property on the weekends and spending most of his time fixing things.  His family is having fun while he fixes.  Presumably he has a regular residence in his hometown to keep up too.  Probably has a few hundred grand invested and after 30 years he sells it for twice what he paid.  Now discount that by his elbow grease and time and the taxman.  Not great.

When it runs smooth it's great until it isn't then a pain in the ass until it's smooth until it's a pain the ass...etc.

It is a way to create wealth like a small business which is also a pain in the ass.  It is a way.

You can create wealth from nothing if you are in the right place at the right time or have a method.
There was a time I had a method and was creating money out of thin air it seemed.

Most small operators don't make much when they factor in the cost of their labor and headache time, such as lawyer fees, repairs, upkeep, time spent in court for evictions, stress, etc.

Some (most) of the people in this thread getting into it will make only headaches.

An index fund like Vanguard TSM has grown 8-10% a year over time plus 2% dividends and you don't do a thing.

Owning rental r/e is a part-time job.  If you are highly leveraged your cash flow is minimal.  If you are not and have a lot of equity then the cost of your capital invested lowers your return but your cash flow is good.

Appreciation depends on location and timing and what you paid going in.  The big money is made going in or if you are in a super hot market and you can flip before the market turns.

What would I do if I could do over?  Buy as many shares of Berkshire Hathaway as I could 40 years ago.  One share then was about $5k and now it's worth $1 million.

Turning money is taking the profit and putting it into something else, which earns profit, rinse repeat.

I created a system that worked, all cash. Only financed the construction aspect of my first two development projects. Everything else has been cash since then, no banks, no loans. Working with one of the largest builders in America.

Flipped houses and developed land for builders after the housing crash in 07-08. Bought tracts of land for pennies on the dollar, many were foreclosures. Developed them myself and sold finished pads/lots, made a killing.

I stopped doing all that once the market got hot. Now i own raw land and a few properties that pay my bills every month with a healthy profit on top of that. My salary/profits are all invested in new land deals with partners and i travel 2-3 months a year. No worries, no drama.

I've worked in land development most of my career. I know all the tricks. Watched most of the people fail. I did well. When the market tanks again, i'll do it all again. Currently looking to buy some projects others backed out of, will see how things go the next 6-12 months.

Shit, if we could look into the future, we'd all be rich. My index funds and general market investments are about 20% of my portfolio.

I'm also a silent partner in about 15 other businesses and properties. Just a small owner, but i get a lot in return over the years if it plays out right. So far it has done pretty well.

The hard part is done, now i work an easy job and enjoy life. I did work my life away for about 7-8 years but being able to retire at 50-55 will make it all worth it.

[Dalnet]

Turning money is taking the profit and putting it into something else, which earns profit, rinse repeat.

I created a system that worked, all cash. Only financed the construction aspect of my first two development projects. Everything else has been cash since then, no banks, no loans. Working with one of the largest builders in America.

Flipped houses and developed land for builders after the housing crash in 07-08. Bought tracts of land for pennies on the dollar, many were foreclosures. Developed them myself and sold finished pads/lots, made a killing.

I stopped doing all that once the market got hot. Now i own raw land and a few properties that pay my bills every month with a healthy profit on top of that. My salary/profits are all invested in new land deals with partners and i travel 2-3 months a year. No worries, no drama.

I've worked in land development most of my career. I know all the tricks. Watched most of the people fail. I did well. When the market tanks again, i'll do it all again. Currently looking to buy some projects others backed out of, will see how things go the next 6-12 months.

Shit, if we could look into the future, we'd all be rich. My index funds and general market investments are about 20% of my portfolio.

I'm also a silent partner in about 15 other businesses and properties. Just a small owner, but i get a lot in return over the years if it plays out right. So far it has done pretty well.

The hard part is done, now i work an easy job and enjoy life. I did work my life away for about 7-8 years but being able to retire at 50-55 will make it all worth it.

You've done very well, indeed. I got my first rental property at an auction in 2009 just after the crash - similar situation to you looking for a bargain. Turns out, when looking at the deeds/paperwork; I lived a few streets away from the original owners and knew their son in passing - so they must have been hit hard in that crash. Not sure if you had a building/contractor background or not. I didn't, initially so everything was a learning curve and stressful for a while figuring shit out without being scammed. That's why I stuck to new builds initially with superficial fixes. What was your original background were you in a trade/building side so it was easy to take risky projects on?

Congrats, btw and hope you have a great long life in retirement enjoying yourself. I'm nowhere near that league but it'd be nice to be comfortable one day. After all the times I've been let down though; I don't know how I'd be able to risk as many investments as someone like yourself, re: partnering up in businesses etc.

[IroNat]

Turning money is taking the profit and putting it into something else, which earns profit, rinse repeat.

I created a system that worked, all cash. Only financed the construction aspect of my first two development projects. Everything else has been cash since then, no banks, no loans. Working with one of the largest builders in America.

Flipped houses and developed land for builders after the housing crash in 07-08. Bought tracts of land for pennies on the dollar, many were foreclosures. Developed them myself and sold finished pads/lots, made a killing.

I stopped doing all that once the market got hot. Now i own raw land and a few properties that pay my bills every month with a healthy profit on top of that. My salary/profits are all invested in new land deals with partners and i travel 2-3 months a year. No worries, no drama.

I've worked in land development most of my career. I know all the tricks. Watched most of the people fail. I did well. When the market tanks again, i'll do it all again. Currently looking to buy some projects others backed out of, will see how things go the next 6-12 months.

Shit, if we could look into the future, we'd all be rich. My index funds and general market investments are about 20% of my portfolio.

I'm also a silent partner in about 15 other businesses and properties. Just a small owner, but i get a lot in return over the years if it plays out right. So far it has done pretty well.

The hard part is done, now i work an easy job and enjoy life. I did work my life away for about 7-8 years but being able to retire at 50-55 will make it all worth it.

Fantastic Tio!

[BayGBM]

Hahaha. Mild flirting to score a bargain is as far as I'll ever go!

He renovated my house over a period of 15 months.  Every time he came over he noticed something that needed fixing or upgrading.  Off we would go to Home Depot or lowes and when the weekend was over the work was done.  He installed 6 new ceiling fans… new LED lighting fixtures to replace old fluorescents… new external lighting all around the house…  fully renovated two bathrooms… new flooring… installed new hot water heater… hung several new doors… and on and on.  A lot of time passed and we eventually drifted apart but when I bought my new place he brought his new tools and did more work for me for old times sake.  I compensated him accordingly.  Saved me a fortune!

[Gym Rat]

Phil Pfister does houses

[Gym Rat]

Old Man Strength... Calves of Peace.