All Forum Posts by: Caitlin Worrell

@Nerissa Marbury. We ended up putting a clause in the lease that we covered utilities (solid waste, gas, electricity, water, etc), but if any single bill exceeded $200 it would be charged as additional rent that was due with the next months rent. Our big bills tend to be water (can get up to $180 on higher months) and gas (varies depending on the temperature) in the winter. Thankfully we didn’t have to enforce this clause! Wishing you good luck. 

I am currently house hacking. I’m going to be out of town for 4 months this fall and hope to rent my unit furnished. For simplicity’s sake, I am considering rolling the utilities (water, gas, electric, internet/cable) into the rent. Also, the gas bill is spilt on a square footage basis with the upstairs tenant. At the same time, I am worried that “free” utilities will mean the heat is kept at a tropical level or they’ll make a ice rink in the back. Does anyone have strategies to mitigate this? A clause with utilities included up to a cap? Any advice would be appreciated. 

Thanks @Harjeet Bhatti. This is very helpful!

My husband and I have been house hacking a duplex for the past three years. We financed the duplex are currently at ~70% LTV. It has been a great financial decision for us and a great entree into REI.

In the next 2-3 years, we would like to purchase a SFH as our personal residence and maintain the duplex as an investment property. We have 2+ years of rental income history for the second unit and have been using the BP resources to help refine our processes while we still live on site. Based on research of comps for our unit, we should be able to cover all expenses (e.g. PITI, utilities, landscaping, CapEx, other maintenance, vacancy, turnover costs, etc.) with income for both units, plus some cash flow.

We are working on saving up for another downpayment, and I am trying to understand and plan for how the rental could impact our personal mortgage. Will the bank take into consideration any of the future rent for our unit? Is there a standard amount that we need to demonstrate is held in reserve for the duplex? Anything else we should know or prepare?

Thanks in advance!

Thanks, Sam. The duplex comps could support our needed value, if the subject property is compared to them with the correct dimensions/information. The BPO servicer was able to verify the correct information when he saw the interior.

Would the appraisal from loan origination process hold any weight or do tax records trump all? 

I think you are right, Stephanie. The tax records are likely the source of the incorrect information. But the appraisal at the loan initiation includes the correct dimensions/information. I was thinking of including that original appraisal with the dispute form showing the correct dimensions/information and requesting a re-evaluation. Do you think that could work? 

Thanks, Chris. The lender offered us the option of a BPO or an appraisal for shedding our PMI. We went with the BPO option. When we got back the report from the lender, denying our request, I noticed that they didn't account for all of the beds/baths/sqft in our duplex. They've sent us a dispute form, and I hope we can make an argument for a higher valuation.

p.p1 {margin: 0.0px 0.0px 0.0px 0.0px; font: 12.0px 'Helvetica Neue'; -webkit-text-stroke: #000000} p.p2 {margin: 0.0px 0.0px 0.0px 0.0px; font: 12.0px 'Helvetica Neue'; -webkit-text-stroke: #000000; min-height: 14.0px} span.s1 {font-kerning: none}

Thanks, Chris. I was a bit worried about the BPO process, but the price difference between BPO and appraisal was substantial. And I wasn’t very confident we’d hit the needed valuation. Basically, I was willing to make a $200 bet (BPO), but not a $800 bet (appraisal).

What is most frustrating is that the BPO agent did come inside and take pictures of the interior, so the errors are…strange. I get that BPO service providers don’t get paid much, but getting the right number of beds, baths, and GLA shouldn’t be beyond expectation. If they those are adjusted the comps might support the needed valuation.

I will request a re-evaluation with the correct information before paying more money to fix their mistake. I would suspect that justification is stronger than disagreeing with their comps. 

p.p1 {margin: 0.0px 0.0px 0.0px 0.0px; font: 12.0px 'Helvetica Neue'; -webkit-text-stroke: #000000} span.s1 {font-kerning: none}

Thanks for the suggestion, Kyle. Before I shell out $800 for an appraisal, I am hoping to see if the bank will consider a re-valuation given the serious factual errors about the subject property within the report. I’ve requested the dispute form and can clearly document the discrepencies with the loan origination appraisal. Trying to do some research on how to best support my case. If that doesn’t work, I’ll try a real appraisal. 

Given the trajectory of property values in my market, I submitted a request for a BPO in an to attempt to shed PMI on my duplex. The LTV returned as 74.5% ($600,000) when 70.0% was required ($640,000). Prior to the BPO, it was challenging to estimate valuation due to limited and high variable comps/ Though we thought the potential benefits outweighed the cost of the BPO. The property is located in an established and high value neighborhood amongst mostly single family homes. Many similar properties are converted into SFH or torn down for new builds ($1.5 - $1.8 M), making it increasingly challenging to find comps of equal condition and in close proximity.

However upon reviewing the BPO report, I noticed some discrepancies that would impact the valuation. 

Subject as described in BPO:

Unit #1: 2 bd, 1 ba

Unit #2: 1 bd, 1 ba

Gross living area: 1875

Actual Subject:

Unit #1: 2 bd, 2 ba

Unit #2: 2 bd, 1 ba

Gross living area: 2548

Besides pointing out the obvious errors in the report (missing a bedroom, a bathroom, and >500 sqft), can anyone offer any guidance on successfully disputing the BPO valuation?