Make $ make sense

I often times do not understand what people are thinking when they buy properties. I sold a property a few weeks ago for a price that #1, I would never pay for the building and #2, I can’t believe I got for the building when I sold it. Drove by today and there is brand new siding going on the building, but it’s not going to do anything to really bump the rents up. Why would someone do this? --174.240.xxx.xxx

Make $ make sense (by Landlord ofthe Flies [TX]) Posted on: Apr 25, 2024 7:37 PM
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Education can be expensive sometimes. All those home improvement shows make it look so simple. And every home in those shows has a buyer before the end of the credits. --108.69.xxx.xxx

Make $ make sense (by ken [NY]) Posted on: Apr 25, 2024 8:04 PM
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they are looking to show off to there friends so they put on new siding.You are looking to show off to your accountant so you didnt put siding on and sold it.We are in a spot in the cycle where people think they have to buy property or they will be left behind financially and you know in a year or two you can probably buy it back for a 30% discount --74.77.xx.xx

Make $ make sense (by Bonanza [NC]) Posted on: Apr 25, 2024 8:28 PM
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Sometimes dumb is effective. Look there are several "luxury" apartment complexes that charge crazy prices and they don't seem to have a problem filling them.

These places are not any different than any other complex. Maybe they have a pool and gym.

$1365 for a 2 bed 1.5 bath apartment 1000sq ft

duplex for the same thing is averaging $850 to $900

Perhaps big money is collecting money from little fish and then buying something at crazy prices with little fish money and telling them they are going to get passive income (if there is anything left). --65.188.xxx.xxx

Make $ make sense (by NE [PA]) Posted on: Apr 25, 2024 8:44 PM
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OK, so I’m not crazy in seeing and thinking what I am seeing and thinking. I told my wife, granted it could’ve used new siding during our ownership, but there was no money in me putting the siding on the property. --24.152.xxx.xx

Make $ make sense (by 6x6 [TN]) Posted on: Apr 25, 2024 8:55 PM
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I am learning this lesson. --76.129.xxx.xx

Make $ make sense (by RB [TN]) Posted on: Apr 25, 2024 9:03 PM
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Ya sold it to a siding expert who can buy at discount.

--69.130.xxx.xxx

Make $ make sense (by Mapleaf18 [NY]) Posted on: Apr 25, 2024 9:06 PM
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We put siding on but that is strictly to avoid painting the exterior. We get a great deal on it and DH is an expert sider. Plus we got our properties for a song. --64.246.xxx.xx

Make $ make sense (by NE [PA]) Posted on: Apr 25, 2024 9:18 PM
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I’ve done a lot of siding on buildings. But when it makes financial sense. --24.152.xxx.xx

Make $ make sense (by OREO [WI]) Posted on: Apr 25, 2024 11:04 PM
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Many improvements we've done were to eliminate work as MAPLELEAF stated...and they also added value to the property. --75.11.xx.xx

Make $ make sense (by Small potatoes [NY]) Posted on: Apr 26, 2024 12:57 AM
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New siding will only make your appreciation go up when the assessor drives around and can see the improvements. Mine looks so bad the insurance adjuster thought it wad vacant and I received a dancellation notice, lol --172.59.xxx.x

Make $ make sense (by Sisco [MO]) Posted on: Apr 26, 2024 6:42 AM
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I think the long term financing with no out of pocket money required by increasing the mortgage amount is the key to understanding the timing of improvements. The 10 year wish list gets pushed forward with urgency in order to get long term financing.

It is another version of the non needed new roof for first time home buyers. --149.76.xxx.x

Make $ make sense (by NE [PA]) Posted on: Apr 26, 2024 6:51 AM
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Sisco, this was a cash purchase and I’m assuming a cash job for siding as well. Which is why I’m more confused at the high purchase price and siding being done. Seems to me it will take them forever to get their money back. If they refi the full amount with a 20 yr commercial, they negative Cashflow no doubt. --24.152.xxx.xx

Make $ make sense (by Sisco [MO]) Posted on: Apr 26, 2024 7:28 AM
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It sounds like the buyers are betting on inflation to make these improvements now rather than later. On this point they may well be correct. --149.76.xxx.x

Make $ make sense (by Ray-N-Pa [PA]) Posted on: Apr 26, 2024 8:03 AM
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I assume this often NE. But then I ask myself, what is the business model that they are using. perhaps they are going to make the place into a STR or maybe a special needs place like senior housing. Using a straight BRRRR model, prices can go only so high. Maybe they are going owner occupied?

I have multiple places that I have had for 20 plus years now that when they come open, I have been doing a $15,000 upgrade and slamming on a for sale sign on them and they are flying off the shelf. So I have buying non-traditional replacement properties for a few years now. It provides me with a level of diversity in a contraction of the market. --24.101.xxx.xxx

Make $ make sense (by plenty [MO]) Posted on: Apr 26, 2024 8:22 AM
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I'm getting ready to put vinyl siding on a house cause the way it is now it's difficult to carry insurance. It will save me $500 a year in expensive. Won't take long to recoup the siding cost --172.59.xxx.xxx

Make $ make sense (by zero [IN]) Posted on: Apr 26, 2024 9:03 AM
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I sided the house my mother-in-law is in a couple years back. It gained me no extra finances and I will get dinged on property taxes.

It looked really bad outside though. I rehabbed the inside before she moved in. Now it is no longer the ugliest house on the block. One neighbor commented that it made the block look better, Another whined that it made his place look worse.

Will take a while to recoup the money but I was between projects and now when the wife goes over she doesn't complain about the outside. --107.147.xx.xx

Make $ make sense (by NE [PA]) Posted on: Apr 26, 2024 9:13 AM
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Why would insurance care about siding? Seems they’d have more expense insuring new siding. Not that anything makes sense. --174.249.xx.xx

Make $ make sense (by plenty [MO]) Posted on: Apr 26, 2024 9:41 AM
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NE agree but they stopped insuring houses with asbestos siding. Which I think is great however they have changed their minds. The policy I have, along with a loan with escrow every year I get notified that the policy isn't paid and they'll provide more expensive insurance. I'm really tired of dealing with this cycle that can't seem to work itself out. So if I put on vinyl siding I can just have my regular agent's insurance

--172.59.xxx.xxx

Make $ make sense (by NE [PA]) Posted on: Apr 26, 2024 9:43 AM
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Plenty, That must be specific insurer. --174.249.xx.xx

Make $ make sense (by plenty [MO]) Posted on: Apr 26, 2024 9:49 AM
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Shelter insurance. Midwest. My other Homes that I purchased before the change they will continue to cover. Foremost is the policy on the new purchase of about three years and every years it's a paper push as escrow isn't paying out. It may be a money grab but it should be automatic and just happen instead I have to be notified and pay with my credit card and get reimbursed and geez it shouldn't be this hard. Plus the policy is twice as much as the other similar homes. Just a way to solve this problem.

--172.59.xxx.xxx

Make $ make sense (by plenty [MO]) Posted on: Apr 26, 2024 9:49 AM
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--172.59.xxx.xxx

Make $ make sense (by Dodge [PA]) Posted on: Apr 26, 2024 10:55 AM
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It'll be interesting to come back to this question in a few years or decade.

Like another had said it may be to get it done now and it's good for years. Labor and materials aren't getting cheaper. I keep seeing houses sell for way more than I'd pay, but people are buying them. With a fixed rate mortgage perhaps it's just an inflation hedge?

Maybe they want to retire to the house in a few years and did the work now so they can expense it rather than add to cost basis when it's owner occupied.

--98.235.xxx.xxx

Make $ make sense (by BRAD 20,000 [IN]) Posted on: Apr 29, 2024 12:28 AM
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NE,

Keep us posted on the prop.

Was the buyer a Mature Investor? Ambitious Newbie? Flipper? Hedge Fund? AirBnb'er?

Lead laws?

HGTV has changed how people see homes. Flip, STR. MTR, are all the rage online.

A local investor sides, replumbs, new HVAC, cuts down ALL trees on every new purchase before renting. He says "I don't want any maintenance".

My criteria has changed. Sure I consider ROI but HF (Hassle Free) is #1 criteria - minimal work needed/turnkey and desirable/easy to rent.

BRAD --73.103.xxx.xxx

Make $ make sense (by Ray-N-Pa [PA]) Posted on: Apr 29, 2024 4:57 PM
Message:

I get what you are saying NE.

I am not sure if BRRRR and FIRE have changed the market place to the point that the rules that have been around for a long time just don't exist or don't apply. Will these trends stick? Hard saying. --24.101.xxx.xxx

Make $ make sense (by Jim [CA]) Posted on: Apr 29, 2024 5:09 PM
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Might have sold to someone lacking good real estate knowledge or can see great potential down the road. I have bought properties that seemed high but have increased significantly. I paid $250,000 for one that I thought was only worth $230,000 but today Is worth $900,000. --146.70.xxx.x

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