All Forum Posts by: JT Spangler

@Pat Martin  Thanks a lot for that! How many quotes did you get, if you don't mind me asking?

Yeah, depending on the scope I may DIY, but I need an estimate or two to go back to the sellers with and negotiate. I've got queries out to two plumbers, but thought I'd also check in here.

I certainly hope I don't have to replace the sewer line, though! @Jon Holdman 

Got a 2/2 cottage under contract, and the inspector reports that the water pressure and drainage is not great because of the original galvanized pipes. This isn't a job I've tackled before, so my questions are:

(1) What's the difficulty level for me to repipe it (with PEX, maybe? And PVC drain lines)?

(2) What's an approximate price to hire it out, so I can ask for an allowance from the seller?

@Account Closed, I never questioned you being more experienced than me (which is practically the definition of damning with faint praise, btw :) ) -- only saying that more than one lender (both of whom I'm dealt with before and found to be intelligent and competent) flatly contradicted what you said here. I just want to find out which is the truth in my particular case, since it impacts a property I currently have under contract. Thanks for the info about 1003 -- I'm looking forward to digging into that and then revisiting with both lenders.

To answer your question about why they'd be asking what my rental income is -- they aren't. Because I don't have 2 years of income history in my current home, the rental income doesn't come into play (again, this is my understanding from what I've been told by multiple local lenders -- I or they may be mistaken). What they *are* asking is that I have a signed lease in place and 30% equity in the home in order for that mortgage payment NOT to be counted against my d/i ratio. 

Anyway, thanks for the info. I'll do some further investigating and report back.

@Account Closed: are you a lender in the state of Tennessee, or a landlord there with firsthand experience? I ask because two different local lenders told me something different than what you're saying there. If you can direct me to a primary source that clarifies, I would love to see it. Thanks!

Your only real options are to (1) find a lender who will qualify you, (2) find a co-signer, (3) find a cheaper property and pay cash, or (4) start heavily looking into creative financing options, like lease-purchase/subject-to financing.

I'm in the process of doing exactly what you're wanting to do (except after having occupied for only one year), and both lenders I spoke to said as long as I had (1) 30% equity in my current home and (2) signed leases from the roommates, I didn't have to count that payment as a debt on my d/i ratio. 

Alternatively, if you plan to occupy for 2 years, my understanding is that if you claim the rental income (even with you living there) for those 2 years, that's sufficient for the property to be considered an investment for tax purposes, which should also keep it from being a debt on your personal balance sheet when you get ready to buy house #2. Maybe someone more experienced than me can chime in and verify that.

Good luck!

Thanks, @Jared DeValk! I definitely am interested in his answer.

I'm currently in the process of purchasing a 2/2 cottage with a 1/1 basement apartment (that needs quite a bit of work, but it permitted). I'm wondering what the process is to get a separate lease signed for the ADU, and to get a separate mailing address for it -- is this even possible? Basically, where to start? County records, inspector, USPS?

Property is in Nashville, TN.

Thanks, BP nation!

Yeah, @Mike H., you raise good points. This is my first real world entry into landlording, so as the rubber meets the road I'll learn some of this stuff I've only read about so far. I follow the neighborhood facebook group (~10k members, really active) closely, and I see demand for studio and 1bdrm apts, so a daylight/walkout basement should rent pretty well, I'm thinking. I'll leave it vacant for a few months if that's what it takes to get it fixed up really nicely, because there's a big difference between nice basement apt and sketchy basement apt.

As far as the rehab goes, I'm not a flipper, but I suspect that with ~2k in paint, drywall, flooring, and a new bathroom vanity I could flip this for 20k profit. But I don't have a well-defined rehab scope at this point, nor an ARV. The area is crazy, but I'm really hoping for a long term buy and hold. If I need to get out of it I'm pretty positive I can just from updating some finishes and cleaning the junk out of the front yard.