All Forum Posts by: Braeden Warg

Without knowing anything else than what is here, my guess is your obstacles are either zoning or prohibited basement habitation. The "sneaky duplex" phrase sounds to me just like "sneaky tax evasion" - it's great to get something illegally until you are caught.

The screaming obvious action for you here is to call your town and ask about the property. We can give you lots of thoughts on what might be happening, but you don't want to invest based on that. Call the town's zoning officer. Here is some context on the two possible obstacles I see:

Zoning - The area is legally limited to single family homes, as in 1 and only 1. You can try to get a use variance, but I don't see how that would ever be successful since you would have to show the property cannot be used for the currently allowed uses (single family home). You can usually get the zoning destination with the property listing, then look that designation up in the town's zoning code to see which uses are allowed there.

Basement habitation - There is a concern that limited egress, fire and CO are major risks to bedrooms and habitation in general of basements. In PA, basement habitation is not allowed if any basement wall is below grade or if the basement exit door to the outside is below grade (PA 6400.81). Local governments may have tighter restrictions. That doesn't stop them from existing. It just means landlords and tenants play the game of making the bedroom look not like a bedroom during an inspection. Sometimes they get away with it, sometimes not.

I think building a whole suite in the basement will be much more noticeable than just a bedroom and they will probably call you on it if it is not permitted. Permits will also be required for your plumbing and electrical work.

So, what if they catch you? You can get fined and ordered to undo your changes. That's no big deal if it's just a room being used as a bedroom, but imagine ripping out that nice kitchen and bathroom you put in! If the local government doesn't catch you during rental inspections, they have a great opportunity to catch you on sale of the property if they do an interior U&O inspection and find the house is a duplex. In that case, they can block the sale and your buyer may have legal recourse against you for misrepresenting the property if you did.

Hello,

Talk to a couple of lenders (not just one) to see what their requirements would be to refinance this property in a couple years.  You don't want to buy it, then when the balloon payment is almost due then try to finance it.  Definitely hire a real estate attorney to draft or review any seller financing agreement to protect your interests.

Ask the real estate attorney how to handle the POA situation...can you talk with any of the other property owners who are short term renting out their properties to see what/if they have any issues? Check with the town/city to make sure they don't have any ordinances on the books or in the pipeline that would affect having a short term rental there.

Let us know how it goes!  Best to you.

@Braeden Warg Distance targets different types of people. Generally speaking, the farther out you go, the lower you charge, and the more you attract "bargain shoppers." The closer you are the more you attract folks that are less price conscience. 

We have a few mid-term units, the farthest away from the hospitals is about 5 min (West Salem). This unit has a converted basement, but we bought it that way, didn't build it ourselves. Whoever did the construction cut some corners and the sound passing between units can be quite loud (we know because we initially bought it as a house hack and lived there ourselves). But we stay rented and have never once gotten a sound complaint. 

That being said there is certain kinds of insulation you can use that is specifically designed to reduce sound. 

 What rates and leverage are you using as your assumptions