All Forum Posts by: Bill B.

You’re saying they are “low income”. This means you are going to eat pretty much all damage they cause. I HOPE YOU are are getting this money.(The PM isn’t keeping 1/2 or all of it.) Because you’re probably still going to lose money in the deal. 

Ps. Many/most of the problem tenants are going to “lie” and say they are ESAs so you have to waive the pet fees and pet rent. So there is that. 

I hate AI replies as much as anyone. But thsi is more of a Google results post. Of that makes it any better. :-). 

Mr. Google says 1/2% is normal, 5% might be common, 12% is the upper limit of acceptable and 17% is a cause for concern. I assume your inspector has inspected other beachfront condos since he purposely brought the moisture tester. What’s his average result?

GOOGLE; 

If you've detected a high moisture reading in your drywall, especially in a beachfront property, it's crucial to address it promptly to prevent further damage and potential mold growth. Here's what you should know and what to do:What is Considered a High Moisture Reading?

• Drywall moisture readings above 0.5% Moisture Content (MC) are generally considered higher than acceptable.
• While a range between 5% and 12% MC might be considered acceptable depending on the specific environment, levels consistently above 17% suggest significant moisture damage and potentially require replacement.

Potential Causes for High Drywall Moisture in a Beachfront Property:

• High Humidity: Beachfront properties often experience higher relative humidity due to their proximity to the water.
• Poor Ventilation: Inadequate ventilation can trap moisture indoors, leading to elevated humidity levels.
• Leaking: Even a small leak can significantly increase drywall moisture content.
• Salt Air: Salt in the air can contribute to moisture issues, especially in coastal regions.
• Condensation: Poorly insulated walls or single-pane windows can lead to condensation buildup.

Risks of High Drywall Moisture:

• Structural Damage: High moisture weakens the drywall, causing it to crumble and lose structural integrity.
• Mold Growth: Moisture provides an ideal environment for mold and microbial growth, which can pose health risks.

Actions to Take:

• Further Investigation: If you have high moisture readings, investigate the source of the moisture and the extent of the damage.
• Professional Assessment: Consult with a professional mold inspector to assess the situation and recommend remediation steps, especially if you suspect mold.
• Address the Source: Fix any leaks or issues contributing to high humidity.
• Drying: If the moisture content is below 17% and the damage is recent, drying may be possible with proper ventilation and dehumidification.
• Replace Damaged Drywall: If the moisture damage is extensive, replacement of the affected drywall may be necessary.
• Mold Remediation: If mold is present, consult with a professional mold remediation service.

This is a source of last resorts. 

You lose the depreciation tax write off

You make borrowing harder/more expensive/or impossible

You can’t use or work on the property or provide any material service

You can’t partner with close relatives  

You convert capital gains tax rate to the usually much higher regular tax rate

When it comes to RMDs you usually have to sell the entire property. 

You screw up your separation rules and the entire account, not just the real estate portion is considered withdrawn and subject to taxes and penalties. 

Please consider house hacking with roommates if possible, buying a new primwry every year and renting out the previous home if not. Good luck. 

Are you the 100th person to post asking is the 1% rule dead? I think you are…

You can easily make money at 0.6% and you can easily lose money at 1.5%.

Quicken and a credit card. It’s overkill until you have 25-30 properties. Buts it’s super cheap and easy.  

So to keep it. He gets 1/2 of $750k minus $290k owed. So you owe him $230k. Plus pay off $290k. So you have to borrow $520k. That’s a payment of $3,500/mo PLUS insurance, property taxes, utilities, maintenance. So your payment goes up $1,500-$2,000/mo. Can you afford that and can you be approved for it?

The alternative is you sell, net $710k. Pay off $290k and walk with $210k in cash. Pretty obvious which is a better decision. Are you forced to stay in California? Can you move somewhere $210k would be you a house outright? Or at least cut your payment down to current or lower payment? Seems like to perfect time to escape to NV,TN,SD or worst case TX,FL.  

It’s “on the market” and you still think it could be a year before you close? Anything over 30 days is bad, anything over 60 days is a problem. 

If you dropped the price $100k you’d save $35k in “interest” and $35k or more in income taxes and only cost yourself $30k or less. 

Ps. You probably have to put a “due date” on the $135k. It turns in to a bad deal if you decide you can’t or don’t want to sell and the lender borrows you $100k for 10 or 20 years for $35k in interest. But then the downside is you lose even more money if you have to fire sale to pay off this new lender.  But being a 2nd loan on your primwry home they’ll be even more scared of you declaring bankruptcy choosing not to sell. No judge is going to make them.  Good luck. 

The same lender you used? Or if you paid cash seller financing? Offer it tot he entity that owns over 50%? They’d pry be excited to extend their control. 

Would it be allowed, and could you make money if you combined 2 pairs of units into bigger units and converted the building in to a fourplex? (Maybe you could collect almost as much rent, reduce vacancy, and supply a less common product to the market. (As well as reducing parking, noise, etc.) Or would these codes also apply to a 4plex in your market? (I know some markets only apply certain fire code, like sprinklers, to buildings with 5+ units.)

As mentioned, you’re essentially collecting over market rent for waiting what, a week? Two? If you don’t like it simply increase the rent $100 or $200/months and tell them it’s because of their late payments. Either they’ll 1) Fix their behavior, and you can lower the rent back down, 2) Not change and you’ll collect the higher 
late fee you want” 3) Move out and let you find a better tenant as you don’t seem to be willing to just non-renew them. 

The alternative is to hire a PM and let them deal with it. Good luck.