All Forum Posts by: Byron Broughten

Ah, great, that's good to know. I'm actually right nearby in Saint Paul.

On Monday I suppose I'll call the city, then, and hunt down whomever I'm really supposed to talk to about this.

I have a 1BR/3BR duplex in an area zoned so as only single family homes and duplexes are allowed. The 3BR unit, however, used to be two units, and could feasibly be rented as a 3BR/Studio or maybe (with a little work) a 2BR/1BR--but then I would be using the property like a triplex.

So I wonder, given the zoning law, would illegal be to rent the 3BR unit with two leases? Or if so, would a viable move be to put everyone on a single lease but specify different portions of rent from those who reside in different parts of the property?

Advice much appreciated.

Last year I got my first rental property, so to prepare my taxes I figure I'd best find a preparer who knows a thing about real estate.

So I'm just wondering, do any of you near the Twin Cities with real estate know any tax preparers with whom you are so pleased as to recommend?

@Chris Mason Huh! Wow, that is really good to know. Thank you!

Hello!

I just closed on my first rental property (house hacking), and after taking a second to bask in the glory, I'm thinking ahead to the next one.

So I ask: if I claim a bunch of deductions (floor refinishing, bath surround, depreciation, paint, etc.) and try to buy another property in a year, might lenders consider the property to be operating at a loss and thus a source of overall debt rather than income, thereby harming my buying power, even if the property would count as a source of income if I didn't claim those deductions?

I would appreciate any insight.

@Kevin S. That's just the kind of advice I was looking for, thank you!

Hey BP,

I'm trying to buy my first property, and I'm going to send out a bunch of mailers to people who own the specific type of property that I'm looking for; who knows if that'll work, but just in case I want to be prepared.

So I ask: if I get a call from someone interested in selling, should or can I involve my real estate agent in the process, such as to help with paperwork and closing, or should I try to line up a lawyer to help with closing and leave my real estate agent out?

One more consideration: like I said, this is my first property, and thus far my agent has been a tremendous help both to my learning and with connecting me to other team members, and he has taken me to view so many places—I would feel bad cutting him out of the purchase that I finally make. I feel like I'd at least owe him something.

Advice appreciated.

Hey BP,

I'm trying to buy my first property, and I'm going to send out a bunch of mailers to people who own the specific type of property that I'm looking for; who knows if that'll work, but just in case I want to be prepared.

So I ask: if I get a call from someone interested in selling, should or can I involve my real estate agent in the process, such as to help with paperwork and closing, or should I try to line up a lawyer to help with closing and leave my real estate agent out?

One more consideration: like I said, this is my first property, and so far my agent has been a tremendous help both to my learning and with connecting me to other team members, and he has taken me to view so many places—I would feel bad cutting him out of the purchase that I finally make. I feel like I'd at least owe him something.

Advice appreciated.

Hello!

I'm trying to compare the potential for appraised after-repair-value among several multifamily properties, and I'm stuck. I know that making repairs and adding neighborhood-friendly features is of principle importance for raising the value of single-family residences, while increasing cash flow is the bottom line for raising value on properties with 5+ units. But how does that balance out in 2's 3's and 4's?

Consider two scenarios:

1. I buy a duplex for $200,000. It has two 3BR units renting for $1300 each. I do nothing to enhance the property, but I replace the tenants with section 8 tenants and thus pull in $1500 per unit, increasing the cash flow by $400 per month. Would the appraised value of the property increase even though the property wasn't improved?

2. I buy a quadplex for 350,000. It has four 1br units renting for $900 each. I improve the units significantly, but I can't raise the rent—let's say it came with section 8 rent, and the market in that area won't bear any higher. Would the property's appraised value increase significantly even though the rent didn't go up?

Hey Bill, thanks for the reply. My thought process is that refinancing to investment would allow me to get a second property, and second stream of cash flow, much sooner, maybe six months sooner, both because I would be free (theoretically) to use another 5% down payment on the second property with another primary residence loan and because my first property would no longer negatively affect my DTI as much.

I just want to know, would I be allowed to do all that?