All Forum Posts by: Bonnie Low

Hi, Derrick - I don't have any advice for you, but I'm interested in this topic, too. I'm following to see what others recommend. Good luck!

Have you looked into getting creative with your tenant options? Since your HOA costs are fixed, do you really need to pay a property management company? Even when you're abroad, you may be able to manage it yourself - you can collect rents virtually then just hire out the maintenance piece if needed. If you have someone local who can keep an eye on it for you you may be able to pay them considerably less than the PM. Try renting it out as a furnished rental and marketing it to traveling nurses. That has been really popular and lucrative lately. Or try getting two 1/1 tenants in there - you might be able to collect just enough extra with two renters paying for the space, at least enough to cover your fairly small loss at this time. But if you can stand the loss, it sounds like it's worth it in the long run and real estate is a long game.

@Daniel Rasmussen have you considered actually going bigger? In other words, find more than one home and put the multiple properties together in a portfolio loan. The underwriting might be more palatable to a small local bank right now. Just a thought.

I'd be nervous about finding someone to rent it as a salon while this whole COVID thing is going on. At least in our area salons have been shut down a few times. Can it be used for anything else? Commercial buildings in general seem risky right now.

My understanding from my accountant is that you can claim the expenses in the year in which you put it on the market to rent. So list it in 2020 even if you won't have renters occupying it until 2021. Double check that with your accountant, of course, but this is how we have always claimed our write offs on new purchases or newly occupied spaces.

That does seem high. I'm currently closing on a loan of $256,000 (residential owner occupied) at 3% and my closing costs are very similar to yours.

We had an odd situation during a home inspection during the snowiest winter Boise experienced in recent years. We're out of state investors and had gotten an offer accepted on a SFR in a good school district. Our Realtor had done a face time walk through with us before we put the offer in, which is how we usually operate. We flew back there to get our eyes on the property during our due diligence period and we were so glad we did! The home inspector had been there and called out the usual issues, but there was about 3' of snow on the ground at the time and it had iced over so removing the snow took some effort. The floor sagged noticeably in several rooms so we really wanted to look underneath the house to see what was going on. Rather than a traditional crawl space, this house had exterior cellar doors with stairs that took you down below the house. We had to dig out the cellar doors to get down there and what we found was that someone had excavated (by hand) to a depth of about 5' beneath the entire house! Imagine what looked like termite mounds were all that were holding up the house. They had propped some bricks and 2x4's in a couple of places for extra support, but essentially the house was sitting on dirt mounds. We backed out of the deal because it was going to be our first and was more than we felt we could take on, but had we not been there in person and took the effort to dig through the snow, we would have missed it and so would our home inspector. Granted, the inspector should have tried harder, but it just reinforced for us that you have to get your own eyes on the property - even in the dead of winter. I wouldn't hesitate to buy a good deal in the winter, but I would sure bring a good snow shovel with me!

Real estate is a long game and is very forgiving over time. Even if you don't hit it out of the park on this first one, it's likely to return some value to you. You mentioned it's in good shape - just needs cosmetic repairs - so you shouldn't have to worry about any expensive, unforeseen repairs. People always need a place to live and over time it will appreciate. Having tangible assets is a good thing. But you know all this. Every one you'll ever hear talk about getting into investing wishes they would've starter sooner. So there's no time like the present.

Have you been to Boise? It's a great town, great location. Definitely an outdoor paradise with a strong emphasis on healthy outdoor activities, plenty to see and do, all the amenities you need without being in a crowded place. Strong employment opportunities and a great place to invest for appreciation.

This is one of the craziest things I've ever heard. Who does that??! I totally agree with @Bill Hampton. You need to get rid of this tenant because they don't respect the terms of your lease AND they could be setting you up for a lot of expense and a lot of liability. You now have unpermitted plumbing and electrical work in your home. If it had to be re-done, it's doubtful you have enough money in their security deposit to cover it. Get it inspected, get them to cover as much of the cost as possible - use the security deposit to cover the cost of the inspection at the very least - and then hopefully you can move forward without too much cost to yourself. You may want to be prepared to get an attorney involved because they might want to be "reimbursed" for their expenses or want their "property" back (i.e. kitchen appliances.) Best case scenario, they just leave and if the work was done well, you could have a duplex now - if your city allows multi-family in that location. Good luck to you - you'll have to post a follow up so we know how this turns out.