All Forum Posts by: Corby Goade

Hey Rishi- FHA is a great option, and I would use it without a doubt for the reason you mentioned. My point was that a mortgage company will likely require that you carry mortgage insurance (typically about $100 per month) if you have less than 80% equity in the property. I am not sure if that's waived with FHA, but if you have to carry it, make sure it's in your budget. Keep at it and keep asking questions- you're going to kill it!

 Hi Radhika-

Good question, and it's one that we discussed every single month. Here's the thing- the wife is crazy, the husband is rational. If the wife blew up, I would leave, hang up, whatever. The next day I would call the husband and he normally apologized for her behavior and would make an effort to fix the situation. That, and they always paid rent- usually not on time, but always paid within a couple days of the due date. We actually decided that we weren't going to renew their lease for July, but they gave notice instead. In all honesty, I should have done that last summer, but it's a lesson for me. 

@Will M, thank you for the thorough advice and examples. You hit on an issue that I had in mind, but has not been addressed here. I WANT a tenant that gives their landlord 30 days notice, so why would I approve of an incoming tenant that is not giving the proper notice to their current landlord? That being said, the rental market is so tight here that there are lots of millenials living with mom and dad and are fighting for any available vacancy, and would likely have the ability to move in at any time. 

I know it's not typical for investors to include debt service or mortgage payments in their NOI, but that's usually when running numbers for partners or banks so that they get an accurate view of the cap rate. The reality of it is, if you are planning on living at least in part, on the cash flow, you have to include it in some form- either in your rental budget or your personal budget. A quick estimate would put your principle and interest payment around $1250 per month. Typically with a down payment that low, you would have to carry mortgage insurance, unless your appraisal comes back at 20% higher than what you are paying. I am not sure if that is waived with an FHA loan, someone else on here can certainly speak to that.

In any occasion, if you can house hack and get tenants to pay all or most of your mortgage and you are confident you are getting a good deal, then there's a good chance it will pay off in spades. I wish I would have started that way. 

It depends on how the work was done. In my town, lots of people do this. They do a terrible job and create useless, awkward space and destroy the curb appeal of the property. In most cases, it's done without a permit as well, so typically the county does not recognize it as living space in the property which will definitely damage the per square foot value when you go to sell. I've seen it done well a few times, but most of the time it's a hack job. The dead giveaway for a hack job (for me, at least) is having a driveway that bumps in to the house where the garage once was. Looks terrible.

I like Aaron Montague's advice- if you keep the rent and if you find a tenant quickly, refund the deposit. However, I'd check with your state's laws and review your lease first. I have an investor friend here in Idaho that was sued by his tenant for keeping their deposit under similar circumstances. The judge forced him to refund the deposit because the lease (and state law) were clear that it was a "damage" deposit and could only be kept if it were covering damage that the tenant caused. Sounds like you dodged a bullet here. Best of luck.

So much great advice here. Thanks to all who took the time to share their thoughts. There's an overwhelming majority here who have given compelling reasons to wait until they leave to show the house. I had not even considered that the tenant would make claims that they had personal possessions stolen, which I am almost certain would happen.

 Great suggestions, thank you. I will incorporate those in to my screenings from now on. Much appreciated. 

What kind of countertops are installed now? If they are laminate and you can get a clean cut (use a brand new circular saw blade use masking tape over the cut) you could probably slide the new oven in and completely obscure the cut ends anyhow. One other option- I've had a contractor install brand new laminate sheets over my existing laminate pretty inexpensively. Did a 10x10 kitchen for about $250 in just a couple hours. You could do the pre-fab at Home Depot, but the cost of the countertops is the least of your issues. The demo and install and time frame that comes with that could bring you a whole new set of problems.

Yep, you can't screen someone out because they have a service dog. People with disabilities are a protected class and service dogs are covered by that. Unless there is another reason that you wouldn't rent to them (ie; bad credit, poor references, smoking, etc) and you can PROVE that is why they were denied, then you have to consider them as prospective tenants. Take good notes while doing your due diligence and keep them for your records.