All Forum Posts by: Aaron F.

@Daniel Porter

I dove deep into Dallas ADU policies a while ago and from what I remember things are still in flux regulations-wise, but it seems that you can have ADUs for single-family homes, HOWEVER to get a CO for it, it puts a deed restriction on the property that requires it to be owner occupied. I emailed with someone working in dallas city hall about it to clarify because it didn't make sense to me. If you have an ADU, the owner has to live in either the main house OR the ADU, but if you ever move away you essentially couldn't rent out the house (even if you rented the house and the ADU to a single tenant) because of the deed restriction requiring the owner to live in one of the units for the other to be rented. I think that's a crazy policy but that's what it is.

Of course, I imagine people often don’t follow that policy and I would be surprised if someone could give an example of it actually being a problem. I’m super risk averse so I personally wouldn’t do it, but my aversion to risk is also probably why I’m not more successful 😜

Here’s a presentation from the zoning ordinance advisory committee in 10/2020 about it:

https://dallascityhall.com/departments/sustainabledevelopment/planning/DCH%20Documents/ADU/ZOAC_ADU_10.1.2020_FINAL.pdf

@Scott Johnson really cool! And great run-down of the deal. How was your experience with Kiavi?

@JD Martin except the purpose of the moratorium (at least originally) wasn’t to help tenants avoid paying rent, the purpose was to prevent evictions at a time when increased mobility would potentially accelerate COVID’s spread, not to provide blanket tenant relief.

@Jessica G.

I can't answer your question, but I will say that TECHNICALLY you can't rent out both the main house and the ADU. I did a deep dive into this as I was analyzing a deal and the ADU rules in dallas are written so that it must be owner occupied. So, if you want to live in the main house and rent out the ADU you can, and if you want to live in the ADU and rent out the main house you can, but in order to rent out EITHER ONE the owner has to live in the other. In fact, in order to get the certificate of occupancy the property becomes deed restricted to reflect that.

I’m sure people do rent out both, but the actual city ordinances, if the city decides to enforce them, seem pretty strict. I even asked the city because from the way it’s written if you wanted to househack the property, you wouldn’t be able to rent the house at all once you moved out because of the deed restriction, which is crazy to me. 🤷‍♂️

What does “initial cash offer” mean? I see homes (in dallas at least, which is in that list of Zillow Offers cities) that are listed for a price at or below the zestimate, so why wouldn’t the seller just sell to Zillow then? The zestimate seems like a high floor for sellers.

@Jeremy Warren I've never bought a condo for investment purposes but my first personal home was a condo. Obviously, the first thing you need to know is the monthly HOA fee. I've seen some in Dallas are ridiculously high. It's easy to be enticed by a condo price and not initially take into account the HOA fees. The other really important thing is to make sure that the HOA allows renting the unit. The HOA I was in had certain units designated as rentable in the HOA bylaws, so if your unit wasn't one of those, maybe it could still be househacked, but if you ever wanted to move out you'd have to sell the property, which is a huge problem if you're hoping to build a portfolio.

There are a lot of other important things with condos I’m sure. HOAs are the biggest hassle with a condo, because they can issue assessments or impose random rules, but you won’t know how they operate unless you talk to people in a given condo development since they’re all different.

I wonder about this with BRRRR too because when I use the BRRRR calculator, for the taxes I put in the tax rate for the ARV (so if the house is 200k to purchase and has $5500 in taxes but after rehab it would be assessed at ~300k for the refi, I would use 8250 as the annual taxes instead of 5500). Doing that makes deals super thin at a 70% cash-out refi. Maybe I'm doing analysis wrong but I figure it would be stressful to calculate $200/mo cash flow only to have a tax reassessment and have the taxes go up $230.

Hi, I'm trying to get started doing buy and hold / BRRRR investing in the DFW area, but when I use the calculators on BP there's one thing I can't wrap my head around, which is tax projections. With good appreciation comes increased taxes, and it seems like Dallas has been pretty aggressive about property valuations for tax appraisal purposes. If rent prices are going up somewhere around 1% per year but property values go up 5% (or whatever) it seems like cash flow can be completely negated by a reappraisal. When I research properties and look at DCAD, it's not unusual to see houses double their tax burden over the past 5 years. How do rental property owners in Dallas deal with that if they plan to hold on to a property long-term rather than cash in on appreciation?

@Scott Mac Whiskey probably wouldn't have been a good idea, since I was in the driver's seat of my car parked in front of the building where I work, but I'll have to try it at home.

@Nate Bell Yeah, I kept trying to think that the worst case scenario couldn't be THAT bad, and honestly, it's not like anything terrible happened. It's really just an anxiety that I have to overcome. I can't imagine being able to accomplish anything on the phone though given my mental state. Working up the courage to make the call took quite a bit, so once I was on the phone I just was trying to get through it without being yelled at. Once I can make the call without an arrhythmia my next goal is to actually speak intelligently and try to get a deal.

I tried cold-calling today for the first time just from driving/walking for dollars. I was so absurdly nervous I sat in my car for like 40 minutes giving myself a pep talk to finally dial the number, telling myself that I'll at some point need to take uncomfortable action if I'm going to progress. The guy who picked up was actually very nice, probably because my voice was shaking so badly and took pity on me :)

Anyway, I'm hoping/assuming that it gets easier with experience. The insane anxiety of making that call really took a toll on me. My heart was pounding and my whole body was shaking. Did anybody start like that and actually become good at cold calling?