All Forum Posts by: Jeffrey K.

Unfortunately, the answer depends a little on what you are buying. Traditionally, 2-4 units fall under conventional lending standards. This means that the appraisal is mostly done on a market based approach, i.e. what are other similar units selling for. However, 5+ units are a commercial loan that usually offer worse terms for you loan. The advantage is that income drives the value. Either way, I would say do your own research. Presumable you are buying a property because you think you can do better than the last guy unless you are looking at a turnkey. The current market is extremely competitive and most properties (depending on you area) do not have very much room for cash flow at the current rent rates. Again, this depends on the type of property you are buying and your strategy but the most important question is can you make money on the deal. If your numbers are conservative and accurate, who cares what the sellers were doing with it.

I am no expert, but if you want I can take a stab at your deals and numbers. LMK

In order to not bury the lead... hardwood, hardwood, hardwood. 

In my experience, people often rave about hardwood but I have never heard "OMG that is amazing carpet"

Furthermore, I have found that noise issues are usually resolved between tenants as opposed to a landlord issue. Additionally, carpets are significantly less resilient than hardwood. On a practical basis, this can mean less frequent replacement and/or chasing down tenants for a moving out expense that their security deposit is insufficient to cover.  

Finally, the hardwood is already in...why spend money on something that the tenant will not actively appreciate.

As for the trim...that is one of my favorite cheap replacements that can go a very long way. If you just need to paint or finish the trim in place, thats great news and will cost about $50. New trim can give a more modern look to a rental without breaking the bank.

Hey, 

I will preface this by saying that I am not into gun sports. I would expect that there is a fairly serious amount of regulation around a gun range and some significant insurance premiums. However, I would think that you could parlay this into some other profit sectors...specially ammo sales. Furthermore, I have a friend that does three gun competitions and there could be a huge upside to repacking bullet casings. I know people do this, but the legality of doing it correctly could be a minefield of regulation.

To give another spin on this, usually land financing is 65% LTV at best. Where are is if you were willing to house hack, you could utilize a low down payment loan for around 97% LTV. The downside is that you would like be unable to count your roommate income to qualify (there are exceptions to this depending on the banks standards.)

I have a ton a respect for your innovation!!!! In my mind it comes down to do you want to set up a business with marketing, membership management, local laws, etc. or building passive income. You are already basically house hacking and still have access to low down payment loans. My probing questions would be: is your money really going further with land and is the juice worth the squeeze setting up a business instead of a room in your house?

I am pretty good with the conventional loan side, so let me know if you have any questions on high LTV stuff. Still love you creativity

Hey, 

1st off I, personally, cannot see a situation where a ceiling fan could actually increase rent. I my mind if a tenant were willing to pay increased rent for a ceiling fan, they would likely be better off with a cheap window fan unit that the could easily purchase on their own.

However, I have had success with offering portable air conditioning unit to tenants for increased rent payments. I usually offer them a $400 floor AC unit for $25 dollars a month. I believe this offers a couple advantages. 

1. At $25 per month, the unit is paid for in 1 year and everything past that is profit. 

2. If the tenant elects to pursue this route, you have tangible buy in vs. an arbitrary rent increase.

3. The units are easily movable. Therefore, if a new tenant elects not to have an AC unit you can easily transfer them to another unit.

4. They look better than window AC units or window fans. 

5. I believe that it build trust with your tenant. If you pitch it as an add on, you are solving a problem for them at a very reasonable rate. The key is pitching it correctly.

6. I do this quite often, but it opens the door to improvements that would better the tenants experience and pay for themselves in under a year. I have had tenants reach out and advocate for additional improvement essentially on their dime.

A very common and true adage is that good/happy tenants are cheaper than the alternative. If you can solve a problem for them, make a little money and avoid the relationship becoming adversarial...its a win win.

I have an investment property that I am planning on moving to, remodeling and refinancing. Given that rates and terms are better for a primary residence mortgage, how long do I have to live in the property before mortgage companies will allow me to refinance? Side note I have owed the property for 2.5 years.

Hi,

I have some tenants on a month to month lease that have not paid rent. Therefore, I would like to terminate their lease. The problem is that I am finding conflicting information online. The Colorado landlord/tenant handbook says I only have to give 10 days notice pursuant but  C.R.S. § 13-40-107 says 7 days. However, I have found a newer bill SB17-245 that says I have to give 21  day notice. Both can be found on colorado.gov sites. I did notice that section 1 of the SB bill says "without a written agreement" for rent increases. Is that true for section 2? 

I know this is a technical and sticky question, but I would be really appreciate any help! 

Hey I was wondering if anyone had experience with using ADU income to qualify for a home ready loan. My questions include:

Was the ADU income income just passed through the DU program or manually evaluated?

Do you have to use the ADU's income or can I live in the ADU and claim the primary houses rental income?

What are the major hurdles in trying to buy a house this way?

Thanks!!

The biggest thing here, in my experience, is the self sufficiency test. With FHA this states that 75% of the rents need to cover the entire PITI. I bought a fourplex with FHA, and this was the major hurdle.

As for the occupancy aspect, yes its mortgage fraud. Conversely, in my experience no one from the bank has ever come knocking on my door provided my payments are on time. However, one the the units must be vacant within 60 days of you buying the triplex so you can move in. The loan wont get pasted the underwriters without verification of this. 

Thanks for all your input, I think I needed reminding that this is a business and the terms of the lease are the rules that both I and the tenants have agreed on. The lease is there to protect me from being taken advantage of and should be treated as such.

Truth...thats the easiest approach. but throwing a woman with kids and a pregnant couple on the street without regard seems unnecessarily cold. Plus, I made more money than my property would have normally taken in. Is there any consideration for that?