All Forum Posts by: Ben Kirchner

Does anyone have experience of renting a room or entire house on Airbnb?  I had always thought Durham was not a good place for an Airbnb, as I don't see it as a location for people to spend a weekend out of town, or a week long vacation.  However, someone recently said when we was arriving in town and needed a place to stay for a night, she was finding a lot of places in Durham were booked in the middle of the week.  Therefore, I'm curious - does anyone have experience with this?

What do you rent out?  How much do you charge a night?  How much goes to you and how much goes to Airbnb?  What is your overall average profit when considering utilities, cleaning, restocking, etc...?

In this case, the seller would be moving onto a house with her husband, which is already purchased. Knowing her situation, she would not need the house purchased right away. Good to know what is needed to make this official. Thanks for the help @Account Closed

Here is the situation:

My friend is about to sell her house.  She says she is looking for $180,000, and will put it on the market in about 6 weeks.  My wife and I are interested in her house, and have discussed trying to purchase it.  However, if I close on this other investment property I'm working on, my capital wouldn't be enough for the down payment on my friend's house.  I'm thinking how I could be creative in a proposal that works out beneficial for both parties.  I've heard of people having sellers carrying the mortgage for periods of time in a purchase.  I wanted to get insight on people's experience with this, and how it works exactly.  

First of all, take the fact that the seller is a friend of mine out of it, I'm making the proposal as if we're strangers, and both parties are to benefit.  My proposal would be that the seller carries the mortgage in her name for 3-6 months.  We would pay her mortgage + $100, and she would continue to gain equity of the house during this time.  We would then purchase the house for $180,000, within the 6 months.  This benefits us in that we're not missing the opportunity to buy the house due to bad timing, and it benefits the seller in the sense that she is guaranteed to get her desired $180,000, and will get an extra $100 a month + all gained equity in these 3-6 months. I have yet to make this proposal.  In my head, it sounds like a win-win.  Am I right?  Do I need to sweeten the pot more?  Or dial it down any?

If all is well on both ends, I will plan on making this proposal.  However, how exactly does something like this get executed?  What ind of arrangement and document needs to be put into place to protect both parties?  Something that states the house is ours if purchased in 6 months, and that the price is locked in at $180,000?

A big thanks to the experience and knowledge of those chiming in on this!

My wife and I are currently looking for a new primary residence, that we would eventually look to rent out. We would hope for around 1% rent of purchase price.However, it seems hard to make work in Durham. My job is south Durham, where we are leaning toward (27713 or 27707), her job is at Duke. Are there particular areas that do particularly well as rentals around these areas?

We're looking at houses in the $200k range. I really don't know much about the market of rentals at around the $2000/month range. However, I've heard from some that Doctors here temporarily may be looking for a nicer home for a period of around 4 years at a time or so. Can landlords in Durham chime in here? Is there a market for ~$200k homes in Durham? If so, what areas?

On a side note, attached bathrooms to the bedrooms are a huge perk for us, as we would be renting out a room while we lived in the residence as well.  Any knowledge of neighborhoods with this type of layout, I'd appreciate the recommendation.

Thanks

Ben

    Update:  Tried to file police report.  Police officer said this is a civil case, not a crime.  Suggested I talked with an attorney and took it up with small claims court.  Does anyone have experience or have an idea if this attempt at recourse would be worth while?  She's going to say she didn't do anything with the appliances.  I'm going to say they are missing, and show old pictures or receipts of the appliances.  Will this be enough for me to have a case?

Add this to the stories of nightmare tenants...

My tenant was late on rent payments month after month. She ends up writing two bad checks in July, and not paying at all in August, then blocking my phone number. I evict her. Court ordered her to be out by 9/5/17.

She is now out, but so are my appliances. Refrigerator, washer, and dryer are all gone. Walls are dirty and scuffed, floors are dirty, trash is spread throughout the house. I filed a police report of the missing appliances. However, I'm guessing she threw them on craigslist and sold them. I don't imagine she would go through the trouble of transporting them to a pawn shop, or dumb enough to put them in her new residence. Therefore, I'm going to be left paying the deductible for my home insurance to replace the items. Is there any other recourse of action that can be taken? I'm curious to what the police can/will do in the event they don't catch her red handed with the appliances in her new residence?

Missed 2 months rent, paid a property manager twice to find a tenant for the house, spending money to deep clean the place, repaint, have carpets cleaned, replace lights, etc...  Now add replacing refrigerator, washer, and dryer to the list.  This is my nightmare tenant story.

@Andrew Postell that is correct.  I have an investment property with an executed lease agreement.  I prchased this property in 2017. I only received rent from that property from March-end of July 2017.  While I still have the lease for this, I would be getting a new tenant for this property in October 2017.  A question I would have is - Is the executed lease agreement all that is needed, and this is the case in every state?  Also, when I do claim the rental income on my taxes, I'm told only 75% will be recognized.  Is this 75% of the monthly rent, or 75% of the total rental income I received in the calendar year?

As far as my current primary residence, I do plan to rent it out when I purchase a new primary residence.  However, my lender did say they would need a lease in order to offset debt.  He did not mention anything about an appraisal to offset the debt.  However, this will not be a problem, as I should have a lease in place within a month of finding a new primary residence.  

I really appreciate the help!

Thanks @Andrew Postell for additional information.  I had no idea some lenders would accept expected rent.  One experienced lender here even said she had never heard of a lender acknowledging rental income without proof of rent history.  So in my case of lender-3 - if they have told me all they need is a signed lease in place, that is truly all I need?  It was even said even though I have now evicted the tenant who was on the lease since March 2017, I can still use that lease.  Acknowledging rental income just based off the lease will be huge for me moving forward with Lender-3, as I would otherwise have my hands tied until the next year.  So I'm very pleased to hear what you've shared, Andrew.

I was given a pre-approval letter from Lender-3.  He knows my credit score, income, mortgage debts, rental history, and anything else he has asked.  Therefore, I'm assuming when one of my offers for the next house purchased is accepted, I should have nothing to worry about the funding going through?  I always wonder what happens with a deal doesn't go through as a result of funding not going through.  Are these more than likely someone lying about their income/debt?  If that's the case, I would have nothing to worry about.

I have talked with 3 different traditional mortgage brokers. I have been told different things with proceeding with a conventional loan through them. I'm in North Carolina, and purchasing a a home in this state.

- Lender-1 says I cannot offset the debt on the mortgage of my rental property until I have claimed it on my 2017 taxes.

- Lender-2 says I can offset the debt on the mortgage of my rental property with a signed lease in place, proof of security deposit, and at least 3 months proof of rent payments.

- Lender-3 says I can offset the debt on the mortgage of my rental property simply with a signed lease, nothing else needed.

My question is can this be right? Do different mortgage companies have different qualifiers with their underwriters? The last thing I want is to have a deal fall through because my lender ends up denying a loan when an offer is accepted. Particularly in this competitive market where I'm offering a higher due diligence.

The case with my rental property is I did have it filled with a tenant from March 2017 to current, with a lease that was through May 2018. However, I have evicted that tenant this month. I will likely have the house filled with a new tenant by October 1st. Therefore, if all I need is a lease in place to get a loan, I'll go with lender #3. If this is not the case, I will need to wait until 2018 to purchase a new home under a conventional loan.

All help is appreciated.

I'm looking to get my real estate license in North Carolina, in interests as an investor. I wouldn't foresee myself marketing to get new clients and such. More just being able to represent myself as the buyer of properties, and maybe help out out a friend buying or selling, with the latter being a big maybe.

I wanted to reach out to this community as far as my best route for this. I imagine there are different avenues for learning the material - classroom, online, independent study type. What are recommendations? How involved is the process, what is the cost, and what is the typical time frame to get licensed?

I live in Durham, work full time, and would be unavailable for classes during the day. I would be able to devote 5-10 hours a week to studying the material.

Thank you

Ben