All Forum Posts by: Account Closed

I have been having a very hard time understanding this "loophole".
I called RAP yesterday to try and get clarification, I called my tenant lawyer to try and understand it, neither were clear.

I haven't seen any language in my reading online about the "one-time" quality of this. It mainly seems like, after 2 years of owner-occupancy full-time your entire building is no longer covered by RAP, and you can adjust rents as you please. Prior to two years of living there, you are covered by RAP (in MFD <= 3 units)?

Not super complicated, but the RAP call lead me to believe I was actually exempt from RAP until 2 years in? The RAP woman I spoke with said my safest bet is to not raise rent on my one tenant who's been living there a while and came with the house (they also have access to the ADU for their niece) then after 2 years I can adjust rent to whatever I want. Sounds fair to me...

I guess, ultimately, I still need to establish a lease with my tenants who came over in the home-sale, and I guess I should match their rent stipulated in the estoppel agreement.

Ben Gross helped me file my S-Corp + personal taxes last year. I just bought a multifamily in West Oakland in November 2017 with FHA and he's going to help me file that this year.

I believe he was doing CPA work part time but this year is his first year doing it full time, with his new business: https://gaallp.com/

Well, the policy that's being cancelled is $2,052/yr, with a 5k deductible. Total dwelling value of $566k (less than the mortgage), but loss of use at 226k. For an "owner occupied triplex", insinuating I had family members occupying all units in the triplex...but that seems like terrible due diligence on their part to not establish/confirm that I was renting two

The broker I reached out to shared a policy document from an insurer for $1,311/yr, covering dwelling value of $725,000. The document doesn't actually list a deductible, but it did list the structure as a Single Family Dwelling so I clarified—which is when the broker let me know I need two policies, one for myself as the owner occupier, and another that covers having tenants.

@Andrew Muff, makes sense.

I'm wrapping up renovations ASAP for sure, and if the new insurance company tries to schedule an inspection I'll delay until everything is buttoned up.

As it stands, my agent totally goofed the policy and made it for an "owner-occupied" residency but not acknowledging tenants at all. The broker I am speaking with informed me that this policy would not cover any claims stemming from the renters (of which I currently have 1). So I view my current policy as useless as it stands.

They recommended two policies.

I just bought a triplex in Oakland, built in 1917, my plan was to rent out the 2x 1br's downstairs, and owner occupy the 2br upstairs.

I got a quote for insurance through an large agency, and a policy—and we were able to close escrow. 

My lender was trying to help me achieve a low downpayment using FHA loan so I could use my liquidity for renovations . So they even went as far as to call my insurance agent and negotiate a higher deductible with a lower premium so that my monthly payment would fit within the FHA requirements.

After closing I started renovations—a few weeks into my contractor redoing my kitchen, an inspector from the insurance agency called and scheduled a time to view the property. They come, and seem nonplussed at some things, taking pictures of the entire property, and even the unit being renovated.  Capturing photos of plumbing, and exposed electrical the electrician was actively working on.

I received a notice about a week later saying my insurance was being cancelled effective 2/1/2018. The notice included no reasons for cancellation, simply saying "4 major systems must be renovated." So I call them up, my agent was out from December 1st to Jan 8th, so I spoke with someone else. They say they want all new electrical (ROMEX), new plumbing (copper or PEX), a new roof, and new heaters (the heaters are new).

Basically it feels like they decided they don't want to insure me and threw everything they could at me to make it insurmountable to maintain my insurance with them.

I'm currently looking for another company to insure my property before my insurance runs out. Ultimately, based on what I've read, it seems insurance providers can do this as they see fit, and it's unlikely I'm going to find someone to cover me with with the dated electrical in some units.

I am feeling very much between a rock and a hard place with the needed renovations; I'm working with an electrician to see how we can upgrade the electrical, and most roofers are completely slammed this time of year and none are available, and as far as the plumbing goes—redoing the galvanized steel with copper will require gutting huge portions of the house. Basically the time-scale this will play out in is much longer than 60 days, and the costs will be much much higher than I can feasibly bite off all at once.

I feel like this should have been caught in escrow. How can I possibly be lead to believe a house is insurable and then have the rug pulled out from under me the second I own it. Dying from anxiety over here, trying to manage all this and my day job.

Advice?

@Arlen Chou, @Katie P., I just closed on the house.

I got signed estoppel certificates from all tenants stipulating their leases are month to month.

One of the tenants was actually convinced to move out prior to closing by the seller. They were using too much water for gardening and were sick of being harassed so they left.

I have an Oakland based tenant lawyer (Anthony Leung) helping me serve my Owner Occupancy notice for the larger of the 3 units.

Hopefully I can finish the renovation on the vacant 1br by the end of the year and begin renovations on the upstairs 2br when I occupy the residence in January!

I'm going through the process of assessing and making an offer on a multi-tenant building in Oakland.

My main concern is that all the tenants are paying well under market rate ($800 for 1br, $700 for 1br, and $900 for a 2br).

If purchase happens, I would like to do renovations on all of the units, progressively. I would also like to owner-occupy one of the units.

The owner's agent says that the tenants have handshake-agreements with the current owner, and they are all "month to month". 

One of the tenants (1br) is actually moving out in October (which is great).

Ultimately, I'm trying to avoid cash-for-keys, but raise their rent on the 1br from $800->$1200, and the 2br from $900 to $1500 min.

Does anyone here have advice/experience with this kind of situation? I am also reaching out to an Oakland tenant law lawyer.