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Bizatch said:   How do I fix this?  Tenant sent me a photo of 'damaged' floor in kitchen.  This is a wood floor, cheap stuff, not sure what you call it.  It's not hardwood.  Do I call it a laminate floor?

Anyway, how do I fix it?  Cut the bad board out?  If I do, how on earth do I get a replacement board that matches?

  typically I think they do cut it out. If its floating, then they make a tool to disengage pieces if you want to go through the work. Should always try to have some extras, check the attic etch... gonna have to replace with a piece from closet, under fridge, or other area.  then can possibly pass off another brand in swiped area, or place warped  back down.

rated:
vadeltachi said:   
dpa789kd said:   Thanks. I planned on doing that when I realized it wasn't as cut and dry as I thought. After a little more reading it appears you must use the cost basis the day before the fire. So even though there are substantial additional costs to bring it up to new codes, I will still need to pay tax on the difference. I will report back when I have a definitive answer.
  Something seems amiss to me...if you are not conveying (specifically selling) the property, there is not an IRS taxable event involving basis (or anything else), right? You suffered a casualty loss and were reimbursed by the insurance carrier. A gain on that reimbursement should could toward the property's income flow, no? Also, since there are unexpected and unplanned, but for the fire, costs for code upgrades you must pay presently, those costs should be used to offset any gain and are expenses for the current year, not basis adjustments, right?  

  http://www.bizfilings.com/toolkit/sbg/tax-info/fed-taxes/casualty-loss-rules-differ-for-personal-business.aspx

 The IRS page wasn't clear to me, but this link explains it as I can only count my cost basis at the time of fire against it. It doesn't make a lot of sense to me either, because I'm going to sink another $120,000 into it to get it back to the way it was. Basically insurance estimates it will cost $360,000 to repair. Our total loss coverage was $320,000 so they cut us a check and said they don't care what we do with it because it's a total loss. My cost basis at time of fire was approx. $175,000. So an accountant friend thinks I'll owe taxes on $145,000. Doing the work myself I can do it for $120,000-$140,000 I think. I can salvage the entire shell even though insurance has paid to have it torn down.
I guess the IRS reasoning is even though I'm sinking more money into it, it will still have a low cost basis since insurance paid for the repairs, so they want a cut of what I pocket. It seems ridiculous to me, but my friend is confident that's the way it works. They weren't familiar with being able to buy a house with those proceeds as in a 1031 to put off the taxes.

rated:
TravelerMSY said:   Old house here. Upper/lower floors separate units. Upstairs has central. Downstairs apartment has window units for A/C but only gas space heaters (removed at request of insurer) for heat. What's the cheapest way to put a functional heating system in there, short of traditional central or ductless mini-split? We do live upstairs and are likely keeping the place in either a residential or investment capacity for the long haul. New Orleans area, so average winter low temps 40 degrees.

Electric baseboards? Newer, safer gas space heaters?

  Probably electric baseboards if you have the electrical capacity and wiring to support the loads. Wiring is not cheap, nor is electricity in that area. So, if there is gas plumbing in place, and functional window units, I would check into safer gas heaters.

rated:
dpa789kd said:   
vadeltachi said:   
dpa789kd said:   Thanks. I planned on doing that when I realized it wasn't as cut and dry as I thought. After a little more reading it appears you must use the cost basis the day before the fire. So even though there are substantial additional costs to bring it up to new codes, I will still need to pay tax on the difference. I will report back when I have a definitive answer.
  Something seems amiss to me...if you are not conveying (specifically selling) the property, there is not an IRS taxable event involving basis (or anything else), right? You suffered a casualty loss and were reimbursed by the insurance carrier. A gain on that reimbursement should could toward the property's income flow, no? Also, since there are unexpected and unplanned, but for the fire, costs for code upgrades you must pay presently, those costs should be used to offset any gain and are expenses for the current year, not basis adjustments, right?  

  http://www.bizfilings.com/toolkit/sbg/tax-info/fed-taxes/casualty-loss-rules-differ-for-personal-business.aspx 

 The IRS page wasn't clear to me, but this link explains it as I can only count my cost basis at the time of fire against it. It doesn't make a lot of sense to me either, because I'm going to sink another $120,000 into it to get it back to the way it was. Basically insurance estimates it will cost $360,000 to repair. Our total loss coverage was $320,000 so they cut us a check and said they don't care what we do with it because it's a total loss. My cost basis at time of fire was approx. $175,000. So an accountant friend thinks I'll owe taxes on $145,000. Doing the work myself I can do it for $120,000-$140,000 I think. I can salvage the entire shell even though insurance has paid to have it torn down.
I guess the IRS reasoning is even though I'm sinking more money into it, it will still have a low cost basis since insurance paid for the repairs, so they want a cut of what I pocket. It seems ridiculous to me, but my friend is confident that's the way it works. They weren't familiar with being able to buy a house with those proceeds as in a 1031 to put off the taxes.

  Your friend is probably right, and it does make a bit more sense to me now; however, the IRS can't have it both ways. If if wants the gain taxed now, based on the $145k boot, then it has to give you the higher basis on the rebuilt property since you are, quite literally, rebuilding the structure from a total loss. On the other hand, I think you could argue for a tax-free exchange, but you might have to start from scratch without the shell, hire a builder or laborers, and pass it through some sort of corporate entity. Not to diminish your loss and pain, but these sorts of losses happen often enough that there should be a clearer way forward tax wise. The gain was not intentional and you are upgrading the property. It's enough pain to lose a structure, and dealing with the IRS should not add to that pain.

Not to add more confusion, but is the $175k your cost or depreciated basis?

Could you hire your kids or other family members to do some of the work and shelter some of the income that way?

rated:
vadeltachi said:   
TravelerMSY said:   Old house here. Upper/lower floors separate units. Upstairs has central. Downstairs apartment has window units for A/C but only gas space heaters (removed at request of insurer) for heat. What's the cheapest way to put a functional heating system in there, short of traditional central or ductless mini-split? We do live upstairs and are likely keeping the place in either a residential or investment capacity for the long haul. New Orleans area, so average winter low temps 40 degrees.

Electric baseboards? Newer, safer gas space heaters?

  Probably electric baseboards if you have the electrical capacity and wiring to support the loads. Wiring is not cheap, nor is electricity in that area. So, if there is gas plumbing in place, and functional window units, I would check into safer gas heaters.

agreed. those DeLonghi (sp?) ones at Lowes have worked great for me...and they save money (over central) if you only heat certain rooms at night. i personally would not want to rely on them entirely (that is, with no central AC to warm the house quickly and evenly when needed), but for a rental, yeah.

you can swap the window units out for ones with heat, but they're not very economical (for you), and they arent reliable or efficient.

there are new gas wall heaters with safety features to keep insurers happy, but your ins co still might not want them.

rated:
JaxFL said:   
Bizatch said:   How do I fix this?  Tenant sent me a photo of 'damaged' floor in kitchen.  This is a wood floor, cheap stuff, not sure what you call it.  It's not hardwood.  Do I call it a laminate floor?

Anyway, how do I fix it?  Cut the bad board out?  If I do, how on earth do I get a replacement board that matches?

  typically I think they do cut it out. If its floating, then they make a tool to disengage pieces if you want to go through the work. Should always try to have some extras, check the attic etch... gonna have to replace with a piece from closet, under fridge, or other area.  then can possibly pass off another brand in swiped area, or place warped  back down.

  reason number infinity to never install "wood laminate"

rated:
TravelerMSY said:   Old house here. Upper/lower floors separate units. Upstairs has central. Downstairs apartment has window units for A/C but only gas space heaters (removed at request of insurer) for heat. What's the cheapest way to put a functional heating system in there, short of traditional central or ductless mini-split? We do live upstairs and are likely keeping the place in either a residential or investment capacity for the long haul. New Orleans area, so average winter low temps 40 degrees.

Electric baseboards? Newer, safer gas space heaters?

  If you can run the electrical easily baseboards would cheapest.

rated:
vadeltachi said:   
dpa789kd said:   
vadeltachi said:   
dpa789kd said:   Thanks. I planned on doing that when I realized it wasn't as cut and dry as I thought. After a little more reading it appears you must use the cost basis the day before the fire. So even though there are substantial additional costs to bring it up to new codes, I will still need to pay tax on the difference. I will report back when I have a definitive answer.
  Something seems amiss to me...if you are not conveying (specifically selling) the property, there is not an IRS taxable event involving basis (or anything else), right? You suffered a casualty loss and were reimbursed by the insurance carrier. A gain on that reimbursement should could toward the property's income flow, no? Also, since there are unexpected and unplanned, but for the fire, costs for code upgrades you must pay presently, those costs should be used to offset any gain and are expenses for the current year, not basis adjustments, right?  

  http://www.bizfilings.com/toolkit/sbg/tax-info/fed-taxes/casualty-loss-rules-differ-for-personal-business.aspx 

 The IRS page wasn't clear to me, but this link explains it as I can only count my cost basis at the time of fire against it. It doesn't make a lot of sense to me either, because I'm going to sink another $120,000 into it to get it back to the way it was. Basically insurance estimates it will cost $360,000 to repair. Our total loss coverage was $320,000 so they cut us a check and said they don't care what we do with it because it's a total loss. My cost basis at time of fire was approx. $175,000. So an accountant friend thinks I'll owe taxes on $145,000. Doing the work myself I can do it for $120,000-$140,000 I think. I can salvage the entire shell even though insurance has paid to have it torn down.
I guess the IRS reasoning is even though I'm sinking more money into it, it will still have a low cost basis since insurance paid for the repairs, so they want a cut of what I pocket. It seems ridiculous to me, but my friend is confident that's the way it works. They weren't familiar with being able to buy a house with those proceeds as in a 1031 to put off the taxes.

  Your friend is probably right, and it does make a bit more sense to me now; however, the IRS can't have it both ways. If if wants the gain taxed now, based on the $145k boot, then it has to give you the higher basis on the rebuilt property since you are, quite literally, rebuilding the structure from a total loss. On the other hand, I think you could argue for a tax-free exchange, but you might have to start from scratch without the shell, hire a builder or laborers, and pass it through some sort of corporate entity. Not to diminish your loss and pain, but these sorts of losses happen often enough that there should be a clearer way forward tax wise. The gain was not intentional and you are upgrading the property. It's enough pain to lose a structure, and dealing with the IRS should not add to that pain.

Not to add more confusion, but is the $175k your cost or depreciated basis?

Could you hire your kids or other family members to do some of the work and shelter some of the income that way?

  I guess they will let me use the higher cost basis once I get it rebuilt. The thing that I dont understand is what if I hired contractors to come in and completely rebuild it. It would cost all of what I was paid and I would still, according to the IRS, have to pay taxes even though I have nothing left. So I'm almost forced to do it myself to have enough left to still pay taxes on the difference.

The $175k is my cost basis roughly. I paid $150,000 for it and put about $25k into it. The worst is I only owned it for about 6 months before this happened. Went in and replaced some carpets, painted, new AC units, etc... and 6 months later a girl forgot to blow out a candle on her dresser and it caught fire. Luckily everyone made it out okay.

I'll look into hiring family maybe. My wife does a lot of our painting, but we don't have kids yet. Could possibly get my parents to help some if that's close enough family.

Thanks for the advice.

rated:
Bizatch said:   How do I fix this?  Tenant sent me a photo of 'damaged' floor in kitchen.  This is a wood floor, cheap stuff, not sure what you call it.  It's not hardwood.  Do I call it a laminate floor?

Anyway, how do I fix it?  Cut the bad board out?  If I do, how on earth do I get a replacement board that matches?

  I'm assuming that you, or whoever put down the floor, didn't follow laminate/carpet/tile rule number one.  Save some.  You can cut it out and it might have some details on the back about exactly what it is, but you're not likely to find a brand new one that is going to match that well.

rated:
That Laminate floor is toast, Likely got water on it and the rest of the edges are going to look like that in short time, Time to cut your losses and pick one of the 2 choices,

Either go all out and tile it which is what I do and lasts as long as I care to be a landlord or be cheap and use some roll out laminate. Heck if you go with the laminate no need to even tear out the BS that's there, just glue it down over top

roll out laminate flooring is a 1.5 tenant flooring and it costs about 300$ per room installed.

Tile is a lifetime product and costs about 4-5$ psf installed with smaller jobs being on the high side of that or higher.

rated:
Yeah only place id want wood laminate is in bedrooms, no water and and low traffic. Love porcelain tile, or if laminate get same quality you'd find in hotel rooms or mall.

rated:
Are there any TV shows or movies that anyone would recommend on rehabbing a house or remodeling? I don't like the reality TV stuff just the how-to stuff.

rated:
Just about any how-to in the trades is on YouTube.

rated:
mastroadam said:   Are there any TV shows or movies that anyone would recommend on rehabbing a house or remodeling? I don't like the reality TV stuff just the how-to stuff.
  Pacific Heights, The Money Pit. If youre old school,  Mr Blandings Builds His Dream House. haha.

rated:
mastroadam said:   Are there any TV shows or movies that anyone would recommend on rehabbing a house or remodeling? I don't like the reality TV stuff just the how-to stuff.
this old house is the gold standard

"hometime" on pbs is good if it's in your area.

movies? that's a good one.

rated:
I like Mike...as in Mike Holmes...Holmes Instpections...and his other shows. Shows you a lot of ideas, plus shows you how NOT to do something. I've learned a lot from watch his shows over the years. Do it right, the first time.

rated:
drew2money said:   I like Mike...as in Mike Holmes...Holmes Instpections...and his other shows. Shows you a lot of ideas, plus shows you how NOT to do something. I've learned a lot from watch his shows over the years. Do it right, the first time.
  Holmes on Homes was awesome.  I didn't care for Holmes Inspection because basically the show just used his name.  He'd just 'phone in' the first and last 30 seconds of show.  Lame.  The content was good, I just found that annoying.

rated:
tehlorax said:   
drew2money said:   I like Mike...as in Mike Holmes...Holmes Instpections...and his other shows. Shows you a lot of ideas, plus shows you how NOT to do something. I've learned a lot from watch his shows over the years. Do it right, the first time.
  Holmes on Homes was awesome.  I didn't care for Holmes Inspection because basically the show just used his name.  He'd just 'phone in' the first and last 30 seconds of show.  Lame.  The content was good, I just found that annoying.

  

Some of Canadian regulations are different from the US ones. Keep that in mind when watching most of HGTV programs. 

rated:
What is typically upgraded in a bathroom from the mid 80s if it's original? GFI outlets? Can you put tile (or something artificial) on drywall, instead of tearing down the wall paper and drywall and installing concrete board? This house has well water and it smells like sulfur, the plumber that came out said it's a bacteria infection and pouring bleach in the well will cure it. There is a water softener but there are some serious mineral deposits on the tub.

I guess I'm trying to get an idea of how much it might cost to remodel if I do the work and use discount gift cards and coupons. Also looking for something low maintenance and how to get rid of the rust stains.

rated:
mastroadam said:   What is typically upgraded in a bathroom from the mid 80s if it's original? GFI outlets? Can you put tile (or something artificial) on drywall, instead of tearing down the wall paper and drywall and installing concrete board? This house has well water and it smells like sulfur, the plumber that came out said it's a bacteria infection and pouring bleach in the well will cure it. There is a water softener but there are some serious mineral deposits on the tub.

I guess I'm trying to get an idea of how much it might cost to remodel if I do the work and use discount gift cards and coupons. Also looking for something low maintenance and how to get rid of the rust stains.

  
For tile If you want to avoid taking out drywall, Schluter makes some membranes that you could use. May be easier but not necessarily cheaper. Could apply a different stucco type finish to walls once wallpaper is off, if walls are not good shape. Some builders do that in new construction.  A friend in Prospect Heights has well water and had terrible looking sinks, always bought drinking water.  Then he gut remodeled bathroom and think he said used water softener. If yours is leaving minerals, then not using the right softener products perhaps. May need to add a charcoal filter, etc...  Believe you need the right holding tank for sulfer issue.
 
 

rated:
Just a thought on the sulfur smell. Is it only on hot water by chance? I've had this issue with a few rentals if they sit empty. The anode rod in the water heater can get bacteria on it and if it sits for awhile will develop that smell. If that's the case you can pull anode rod and put a cup of beach in the water heater. If it persists I have cut the rod off on some of mine. The water is so hard here that the tank usually fills up with sediment before the tank fails so the anode rod isn't as critical...or at least that's what a couple plumbers here have told me.

rated:
dpa789kd said:   Just a thought on the sulfur smell. Is it only on hot water by chance? I've had this issue with a few rentals if they sit empty. The anode rod in the water heater can get bacteria on it and if it sits for awhile will develop that smell. If that's the case you can pull anode rod and put a cup of beach in the water heater. If it persists I have cut the rod off on some of mine. The water is so hard here that the tank usually fills up with sediment before the tank fails so the anode rod isn't as critical...or at least that's what a couple plumbers here have told me.
  Yep, I agree.  It's probably the anode on the water heater.

rated:
mastroadam said:   What is typically upgraded in a bathroom from the mid 80s if it's original? GFI outlets? Can you put tile (or something artificial) on drywall, instead of tearing down the wall paper and drywall and installing concrete board?
you CAN do whatever half-ass work you want; doesnt mean it's per code, or even a good idea for that matter.

I've installed tile on drywall, but never in wet areas.

as for updates, yeah GFI, maybe ventilation if it wasnt there already...2 sinks if you can fit em (everybody loves 2 sinks)....sometimes you need to swap the double-handle shower valves for a single, and if the valve is on an exterior wall, it has to have this special safety function. Naturally, this is only if you pull a permit.

biggest problem i find with bathrooms is that the plumbers cut the damn joists really clumsily and destroy the floor strength....and of course they tell no one and it never gets reinforced...

rated:
solarUS said:   
sometimes you need to swap the double-handle shower valves for a single, 

  This . Do this instead of repairing the double or triple handle valves.

I would also put in new water supply lines, new toilet ($100 all in), new sink faucet.

rated:
Have any of you done 2nd mortgages on your rentals? What kind of terms are you getting? My CU gives me 5% fixed for 15 years at 25% LTV. They are also flexible and let you choose either tax value of house, driveby appraisal, or full blown interior appraisal. Just wondering if it's worth the time to call more banks and CUs.

I'm using this because fannie backed loans don't let you cash out refi if you have more than 4. Great way to get equity out at low risk.

rated:
rufflesinc said:   Have any of you done 2nd mortgages on your rentals? What kind of terms are you getting? My CU gives me 5% fixed for 15 years at 25% LTV. They are also flexible and let you choose either tax value of house, driveby appraisal, or full blown interior appraisal. Just wondering if it's worth the time to call more banks and CUs.

I'm using this because fannie backed loans don't let you cash out refi if you have more than 4. Great way to get equity out at low risk.

  
Ugh, my bank told me no cash out refis on rental properties, period. I assumed that was a Fannie/Freddie rule, but now I guess it's just the institution? Guess I have some calls to make.

rated:
JohnPaulB said:   
rufflesinc said:   Have any of you done 2nd mortgages on your rentals? What kind of terms are you getting? My CU gives me 5% fixed for 15 years at 25% LTV. They are also flexible and let you choose either tax value of house, driveby appraisal, or full blown interior appraisal. Just wondering if it's worth the time to call more banks and CUs.

I'm using this because fannie backed loans don't let you cash out refi if you have more than 4. Great way to get equity out at low risk.

  
Ugh, my bank told me no cash out refis on rental properties, period. I assumed that was a Fannie/Freddie rule, but now I guess it's just the institution? Guess I have some calls to make.

 Yup, I just did one on a rental a month ago, though the appraisal was crap (required since it's fannie, not portfolio as the 2nd mortgage is) so I only got a few bucks out of it. But I will be doing a 2nd mortgage on it soon 

rated:
ShaftSlinger said:   That Laminate floor is toast, Likely got water on it and the rest of the edges are going to look like that in short time, Time to cut your losses and pick one of the 2 choices,

Either go all out and tile it which is what I do and lasts as long as I care to be a landlord or be cheap and use some roll out laminate. Heck if you go with the laminate no need to even tear out the BS that's there, just glue it down over top

roll out laminate flooring is a 1.5 tenant flooring and it costs about 300$ per room installed.

Tile is a lifetime product and costs about 4-5$ psf installed with smaller jobs being on the high side of that or higher.

  vinyl plank is a better option

rated:
JohnPaulB said:   Ugh, my bank told me no cash out refis on rental properties, period. I assumed that was a Fannie/Freddie rule, but now I guess it's just the institution? Guess I have some calls to make.
  I have done cash out on rentals after cash purchase. some time back there was supposed to be some cooling off period of 6 (?)months before you could do cash out on rentals. Not anymore.

rated:
sharpie130 said:   
ShaftSlinger said:   That Laminate floor is toast, Likely got water on it and the rest of the edges are going to look like that in short time, Time to cut your losses and pick one of the 2 choices,

Either go all out and tile it which is what I do and lasts as long as I care to be a landlord or be cheap and use some roll out laminate. Heck if you go with the laminate no need to even tear out the BS that's there, just glue it down over top

roll out laminate flooring is a 1.5 tenant flooring and it costs about 300$ per room installed.

Tile is a lifetime product and costs about 4-5$ psf installed with smaller jobs being on the high side of that or higher.

  vinyl plank is a better option

  I just laid vinyl plank over some existing flooring.  Pretty good stuff.  

rated:
i am looking to buy investment property in pueblo colorado. good area? we have a family business there. property is $259k and we plan to rent out $1400 per month

rated:
drew2money said:   
sharpie130 said:   
ShaftSlinger said:   That Laminate floor is toast, Likely got water on it and the rest of the edges are going to look like that in short time, Time to cut your losses and pick one of the 2 choices,

Either go all out and tile it which is what I do and lasts as long as I care to be a landlord or be cheap and use some roll out laminate. Heck if you go with the laminate no need to even tear out the BS that's there, just glue it down over top

roll out laminate flooring is a 1.5 tenant flooring and it costs about 300$ per room installed.

Tile is a lifetime product and costs about 4-5$ psf installed with smaller jobs being on the high side of that or higher.

  vinyl plank is a better option

  I just laid vinyl plank over some existing flooring.  Pretty good stuff.  

  Trying to get my DW to let me skip putting the engineered wood down in the rest of the house and using the vinyl plank.  I haven't done it yet, but it looks SO much easier to lay.

rated:
RagingBull said:   i am looking to buy investment property in pueblo colorado. good area? we have a family business there. property is $259k and we plan to rent out $1400 per month
  
You might try the lower end of the market.  You will be loosing money with the property you described.
 

rated:
homeguard said:   
RagingBull said:   i am looking to buy investment property in pueblo colorado. good area? we have a family business there. property is $259k and we plan to rent out $1400 per month
  
You might try the lower end of the market.  You will be loosing money with the property you described.

  Possibly, but with the details he gave, we don't have any real idea...

rated:
RagingBull said:   i am looking to buy investment property in pueblo colorado. good area? we have a family business there. property is $259k and we plan to rent out $1400 per month
  

Read the whole thread, then ask. 

Your property does not pass the basic financial test needed for it to be cash flow positive. 

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