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First Rental Property

Scorpio

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outstanding Davey,

best to you for sure!
 

davycoppitt

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The best part about all this for us is that this building is learning commercial rental and real estate with training wheels. The two residential will cash flow us. Our profit is the two offices and retail. Just the contacts we have gathered and knowledge we will get from this building will be priceless.
 

dacrunch

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I like welding & welding shops - sad to see it getting "gentrified"... but better $$$ I'm sure...
 

hammerhead

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I like welding & welding shops - sad to see it getting "gentrified"... but better $$$ I'm sure...
Hard to find a tin knocker around here since Mills closed down.
 

davycoppitt

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I like welding & welding shops - sad to see it getting "gentrified"... but better $$$ I'm sure...

Zoning. Even if we wanted one city would not allow it. Same family ownership since 1948. His son still welds but didn’t want to take over the family business. Shit could you imagine living over a welding shop.

He did let us keep the sign. We will hang it on the inside in the mechanical room. He wanted it to stay with the building.
 

dacrunch

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Shit could you imagine living over a welding shop.

When I was "home shopping" 2 years ago, I looked all over for an old cinderblock auto-repair shop to buy... and turn the "office space" into an "apartment" to live in. Keep the vehicles (camper, car, bikes) and all my tools & workshop & welding & woodshop in the "repair bays"... Pretty "fireproof" too...
But they were all above my budget...
Would've been great for long-term absences...
- with no "grounds maintenance"
- almost "breakin-proof"
 
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Uglytruth

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Zoning. Even if we wanted one city would not allow it.

There is going to come a time when no one knows how to do anything but bitch.
Skilled trades is a very lost art. Without manufacturing we as a society are N O T H I N G !
Young engineers with zero experience and all the answers.
No one wants to work, get dirty, learn, think, experiment, challenge. Just order parts from Amazon & throw the old junk out.
Spent a few days in and out and in and out and in and out of a pit changing out a 480v pump.
One guy looked & said I don't want to do that. I thought it was interesting & a challenge.
I fix & repair things, design and build test fixtures, then modify them if they don't work. I love thinking and figuring things out.
Of course you can't do that with one hand while playing with your phone.......
 

dacrunch

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There is going to come a time when no one knows how to do anything but bitch.
Skilled trades is a very lost art. Without manufacturing we as a society are N O T H I N G !
Young engineers with zero experience and all the answers.
No one wants to work, get dirty, learn, think, experiment, challenge. Just order parts from Amazon & throw the old junk out.
Spent a few days in and out and in and out and in and out of a pit changing out a 480v pump.
One guy looked & said I don't want to do that. I thought it was interesting & a challenge.
I fix & repair things, design and build test fixtures, then modify them if they don't work. I love thinking and figuring things out.
Of course you can't do that with one hand while playing with your phone.......

Fortunately, Trump is responsible for 10,000 NEW Factories being built in the US SO FAR due to HIS ACTIONS... (from his statements at "Black Voices for Trump" back in November...)

 

newmisty

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There is going to come a time when no one knows how to do anything but bitch.
......
That's clearly evident by simply hanging out here and browsing these threads.
 

dacrunch

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There is going to come a time when no one knows how to do anything but bitch.
Skilled trades is a very lost art. Without manufacturing we as a society are N O T H I N G !
Young engineers with zero experience and all the answers.
[...] I love thinking and figuring things out.
Of course you can't do that with one hand while playing with your phone.......

During my career as an industrial pipe-fitter, I spent half my time "re-engineering" the "installation plans" made by "architects and engineers" on the routing of the pipes in factories... (saving my contractors thousands each time)... They're "smart on paper" but dumb as a box of rocks in the field...
 

davycoppitt

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During my career as an industrial pipe-fitter, I spent half my time "re-engineering" the "installation plans" made by "architects and engineers" on the routing of the pipes in factories... (saving my contractors thousands each time)... They're "smart on paper" but dumb as a box of rocks in the field...

Service pipefitter here. Just switched to a refrigeration shop. I hear you about changing things. At the old shop did a lot of startups. That’s when I really found the design issues.
 

hoarder

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Auto mechanics have the highest rate of engineering related problems. The percentage of shop expenses for car owners is probably over 50% engineer related, the rest being normal wear, abuse and operator error. Having done mechanic work for 21 years, my respect for engineers is minimal. Sorry for thread drift.
 

Thecrensh

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Dropped the ceiling on the first floor where the welding shop was. Had 50 years of welding dust on it.

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THIS is the kind of thing that pisses me off; seeing someone put their time and money (and a LOT of each) into a project like this just to have some FU****G socialist "Bernie Bro" type want you to pay "your fair share" of it. I'd love to throttle every one of them.

The ONLY person I know on social media and real life who supports Sanders is a chick who does effing Yoga all day long.
 

davycoppitt

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Took out the old boiler. Moved the new boiler to a new mechanical room in the building. Finished all the piping in two days, but they were long. Only control wiring and venting and its all finished. Also will put an outdoor reset on the boiler to save money. Kinda wishing I would have painted the walls before I put all the piping up.
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dacrunch

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Took out the old boiler. Moved the new boiler to a new mechanical room in the building. Finished all the piping in two days, but they were long. Only control wiring and venting and its all finished. Also will put an outdoor reset on the boiler to save money. Kinda wishing I would have painted the walls before I put all the piping up.
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Neat job - (this from a retired Union Plumber/Pipefitter).... Kudos on keeping things "clear"...
 

Bottom Feeder

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Kinda wishing I would have painted the walls before I put all the piping up.
Yeah, ain't that always the way it happens. Ya carefully lay out your plans, execute the program, then take a look back at the aesthetics.
Good work, davey.
BF
 

dacrunch

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Started on windows today. Got 4 finished. It was a learning day, so from here on will go quicker. Turned out awesome. View attachment 157643
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Uh... when are you going to install the burglar-proof cross bars into the cinderblocks? ;)
I have them on my downstairs windows... Peace of mind, but a bummer if there's a fire...
But when I leave for weeks... along with the solid 1 1/2'' thick wood shutters on the upstairs windows, somebody would have to make a neighbor-waking racket to break in...
 

davycoppitt

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Got all 24 windows set and looking good. Set the furnace and A/C. Went with a high end Trane unit. Got the duct work ran though the block wall. Im not the best sheet metal guy, but this one turned out decent. Our massive front door came in and Im preparing to cut the opening for that. Its 6'X9'. Building is really starting to take shape. People walking by are starting to slow down and look.

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davycoppitt

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Well we finally finished. Already got back from the welding shop today and I ran out of things to do. Started the project in March of this year and passed our final inspection two weeks ago. We estimated our cost to remodel would be roughly 150k and we are sitting at $180k right now. Not too bad considering the building has new mechanical, electrical, and plumbing from the ground up. Split all electrical and installed a breaker box in each tenant office. Went high end on everything and didn't cut corners on any spot.

During the project we were meeting with the Fire marshal going over our fireproofing. On the way out he told us he was so impressed with what we are doing. He asked if he could give our number to his friend who wanted out of his last two properties. We ended up buying this guys 3 plex in a high end neighborhood located right across from a park. We most likely will buy the guys 7 plex in 2021. He is 80 worn out and ready to be done with everything. I believe he owned over 10 properties at one point and he is down to his last one.

The real credit to this goes to my partners wife. She managed the jobs, picked out and ordered almost all material, dealt with all contractors, and took all inspections. Having a straight up knock out blond meeting inspectors helps allot. We only failed the mechanical inspection and that was only adding a little bit of insulation to some pipes.

Anyway we have the 3 plex full and cash flowing $1100 a month. We will remodel that in May and should bump that cash flow up to $2,300.
Have a signed lease for the 1 bedroom in the welding shop at $1,300 a month, which pays our mortgage. One more space rented out and we are cash flowing.

Anyway this building was a huge learning curve and after remodeling a 1949 welding shop we could do just about any building out there.

Because of the building we became friends with a successful land lord in the area. He gave us his playbook as far as rental agreements and has given us a world of knowledge.

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BackwardsEngineeer

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Davy congrats... you busted your butt and came out on top... most of my leasing clients look more like 80 yr old, worn thin and tired. Enjoy this phase but realize there is another side of the curve, if at some point you get tired sell before you regret it... cash is always good!
 

hoarder

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Davy congrats... you busted your butt and came out on top... most of my leasing clients look more like 80 yr old, worn thin and tired. Enjoy this phase but realize there is another side of the curve, if at some point you get tired sell before you regret it... cash is always good!
True story there. Also remember that with baby boomers dying off in the next 10 years, there will be many changes that landlords will have to take into consideration (reasons to sell).
 

davycoppitt

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True story there. Also remember that with baby boomers dying off in the next 10 years, there will be many changes that landlords will have to take into consideration (reasons to sell).

We are always looking and talking about options. For us we believe this is the place to be right now. I strongly believe you can stick a fork in Minneapolis. What we are seeing is wealthy people fleeing MLPS to the suburbs. We are parked right center in an up and coming area. The city just finished a large street project that we are located on. This area is the city's area of focus. Then as the people fleeing bring there ideals with they destroy where they relocate. We also believe this will eventually happen to our area, so we are always looking at where will people flock to. Right now our next area to start watching will be South Dakota. As Minnesota falls I believe the wealthy in Minnesota will migrate to surrounding states. Easier said than done, but hopefully we can stay ahead of the fall of MN. Long term long term I don't have faith in the Twin cities, but hopefully this will get me out of my daily grind, which will give me time to look at what to do next. Things are going to change quickly and you will have to be super sharp and a little lucky to survive.
 

hammerhead

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Do you draw a dividend or get a paycheck?
 

ttazzman

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True story there. Also remember that with baby boomers dying off in the next 10 years, there will be many changes that landlords will have to take into consideration (reasons to sell).

get some paying tennants in there and at least do some calculations on selling you might be extremely supprized what a unit like that will bring on the open market with tennants in place .......i have been out of the market for a few years but we used to get in a sale #1 the full appraised value of the building + 3-7 years of rent .......this worked well doing a 1031 exchange of the profits for a property you have spotted you want to buy and upgrade and avoided taxes etc.....all i am saying is to look into it now and understand the process in case you want to do something like that in the future and you get tired of being a landlord....you might find your much better at fixing up propertys than you are at dealing with idiot tennants :)....it becomes very important to learn to monitize and bank your profits without being taxed
 

hammerhead

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get some paying tennants in there and at least do some calculations on selling you might be extremely supprized what a unit like that will bring on the open market with tennants in place .......i have been out of the market for a few years but we used to get in a sale #1 the full appraised value of the building + 3-7 years of rent .......this worked well doing a 1031 exchange of the profits for a property you have spotted you want to buy and upgrade and avoided taxes etc.....all i am saying is to look into it now and understand the process in case you want to do something like that in the future and you get tired of being a landlord....you might find your much better at fixing up propertys than you are at dealing with idiot tennants :)....it becomes very important to learn to monitize and bank your profits without being taxed
Sounds like work. Did an accountant help you with those calculations or was it your brilliant mind that figured it out
 

ttazzman

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Sounds like work. Did an accountant help you with those calculations or was it your brilliant mind that figured it out

mentors...brilliant mind.....extreme aversion to giving the government any taxes on money i worked hard to make..(and a degree in accounting didnt hurt)...i can live with any of those descriptors LOL....another concern is while CapGains taxes are very low now ...i can see a Biden world where they would be very punitive indeed ...might be a good time to roll out some gains and reset his tax base
 

hammerhead

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mentors...brilliant mind.....extreme aversion to giving the government any taxes on money i worked hard to make..(and a degree in accounting didnt hurt)...i can live with any of those descriptors LOL....another concern is while CapGains taxes are very low now ...i can see a Biden world where they would be very punitive indeed ...might be a good time to roll out some gains and reset his tax base
There's a big difference in knowing how to do something and making it a successful business. Have yet to read anything positive about Biden as far as independent business is concerned.
 

itsamess

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Congrats on a really nice job.

We are always looking and talking about options. For us we believe this is the place to be right now. I strongly believe you can stick a fork in Minneapolis. What we are seeing is wealthy people fleeing MLPS to the suburbs. We are parked right center in an up and coming area. The city just finished a large street project that we are located on. This area is the city's area of focus. Then as the people fleeing bring there ideals with they destroy where they relocate. We also believe this will eventually happen to our area, so we are always looking at where will people flock to. Right now our next area to start watching will be South Dakota.
I would guess you are thinking Sioux Falls, SD. They would be way better off going to Bismarck, ND for a safer, cleaner big city life style. East river SD is already shitty IMHO.
 

ttazzman

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There's a big difference in knowing how to do something and making it a successful business. Have yet to read anything positive about Biden as far as independent business is concerned.

very early in my entrepreneurial life i had a mentor ...one of his sayings was "making money can be difficult but keeping it after you make it is much more difficult" i think profits are to be expected when your in business due to the risk....but when taxes can be 50cents on each dollar you earn ..... in theory you can work half as much and spend half your time working,learning, legal tax avoidance strategy's and still be money ahead ..... three money things that need as much attention as you daily job.....tax management....intrest management.....insurance management or avoidance
 

dacrunch

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Location, location, location

A good trustworthy property manager with iron-clad leases and quick problem solving, essential when you "grow" or relocate or have personal issues.

A good accountant

Paying attention to city's plans to penalise and overtax landlords

Good luck!
 

davycoppitt

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We got the top filled in the old welding shop

Office $800
One Bedroom $1300
Two Bedroom $1500

One bedroom and office went almost instantly. What we found is in our area there isn't much interest in 2 bedrooms. Everyone who wants a two bedroom wants a house or townhouse. Took us about 2 months to fill the two bedroom. Lots of interest in the 1st floor commerical, but nothing locked in. We are cash flowing pretty good, so we can sit on that for a long time.

We decided to dump our 3 plex. The two bedroom market isn't what we thought it would be and small multi-family in the area are still selling for extreme prices. Going to stockpile the cash and sit on our hands for a while. My partner is also going to sell one of his 4 plex units for the same reason.
 
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edsl48

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We got the top filled in the old welding shop

Office $800
One Bedroom $1300
Two Bedroom $1500

One bedroom and office went almost instantly. What we found is in our area there isn't much interest in 2 bedrooms. Everyone who wants a two bedroom wants a house or townhouse. Took us about 2 months to fill the two bedroom. Lots of interest in the 1st floor commerical, but nothing locked in. We are cash flowing pretty good, so we can sit on that for a long time.

We decided to dump our 3 plex. The two bedroom market isn't what we thought it would be and small multi-family in the area are still selling for extreme prices. Going to stockpile the cash and sit on our hands for a while. My partner is also going to sell one of his 4 plex units for the same reason.
I only rent out single family residences but have found one bedroom houses are big winners. They are hard to find and never built these days but the demand is there in my area. The people that want to rent, do not want an apartment and appreciate a yard seem almost endless in my area. One big group I have found is someone that is into their car or motorcycle. They love having a garage to tinker, polish and do whatever is highly desirable to them and with a decent garage they will pay way more than the typical 2 bedroom unit renter. Let me add that to this day I have never ever had problems with rent, taking care of the property and overall tenant happiness with a one bedroom place...the only problem is finding them.
 

dacrunch

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I only rent out single family residences but have found one bedroom houses are big winners. They are hard to find and never built these days but the demand is there in my area. The people that want to rent, do not want an apartment and appreciate a yard seem almost endless in my area. One big group I have found is someone that is into their car or motorcycle. They love having a garage to tinker, polish and do whatever is highly desirable to them and with a decent garage they will pay way more than the typical 2 bedroom unit renter. Let me add that to this day I have never ever had problems with rent, taking care of the property and overall tenant happiness with a one bedroom place...the only problem is finding them.

I'm surprised that rent income on a 1 br house is enough to cover ownership expenses....
Different market than I'm used to?
I have very high property taxes... and ANY housing is very expensive to purchase...
 

TAEZZAR

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I'm surprised that rent income on a 1 br house is enough to cover ownership expenses....
Different market than I'm used to?
I have very high property taxes... and ANY housing is very expensive to purchase...

You must be on the left coast, AKA, the COW, CA, OR, WA !:don't    know2::finished:
 

dacrunch

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edsl48

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I'm surprised that rent income on a 1 br house is enough to cover ownership expenses....
Different market than I'm used to?
I have very high property taxes... and ANY housing is very expensive to purchase...
At the moment housing prices seem to be high everywhere and is why I haven't bought anything in the past couple of years. My experiences have been that searching for the right priced property can be like panning for gold which is a dayumed hard situation. Property is risky and if you think it isn't there are one hell of a lot of landlords stuck with tenants that are trashing properties that can not be evicted at the moment. On the horizon is the high possibility that Biden will be resurrecting the provisions of the 1968 housing act. With that in mind remember you are buying a depreciating asset and with that I mean you will need roofs, furnaces, technological upgrades with some of the old issues like termites. It is not the bed of roses many claim it to be regardless of what they tell you on 2 am television.
With the benefit of hindsight I have been able to attract some very well financed single individuals that just don't want to live in an apartment. They want the privacy of a house and not having to live across the hallway from who knows who. So while they may not be as profitable on paper in an analytical point of view in actual practice they can attract a much better renter and believe me it has been my experience one bad tenant can mess up a property's years of profit in one swipe.
Landlording is risky and the road to profit is cluttered with undercapitalized landlords that thought it was a road lined with gold and unicorns and in my case, and many others I know, it is one very tough business to be in.
 

dacrunch

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... which is why I've been paying 10% of all income to a good property manager for 20 years... I don't have to get involved unless new roofs are needed...