All Forum Posts by: Christopher Jason Lloyd

On an FHA assumption, you are assuming the loan by qualifying for FHA underwriting standards and the lender approving the assumption. You must meet the same FHA qualification standards in regards to DTI and Occupancy. In most cases with owner occupant financing, this means you will occupy the property within 60 days of closing.

Pest control definitely.  As far as the pet policy, I wish someone told me this so ill say it even though not related to this thread:

I love pets and I have a wonderful dog.  However, dogs in particular can get territorial and considering this is a quadplex, I am guessing there is limited space. I have unfortunately have had a tenant's dog attack another occupant's dog (expensive breed too).  It never went legal but I realized that I needed to ensure that my liability policy and umbrella insurance was sufficient if they couldn't collect from the tenant/tenant's renters insurance since the lawyer will go after anyone they can in this situation especially if it were a kid.  Also find out if your insurance won't cover attacks from specific breeds.  Good stuff to check when allowing pets in higher density living spaces (:  I wish someone had told me.

Hey, we deal with situations like this a lot with clients.  1st off, find yourself a good househack friendly agent.  They will have experience navigating this.  Some properties will be fully leased with leases ending way far out and they don't want to move but I would say in most cases, this isn't what the situation is.  Here's some options.

1. If one of the tenants is on a month-to-month lease, put in the contract that one unit is required to be vacant at closing.  Also, do the walkthrough to make sure it's actually vacant especially if the property is rented below market value.  Chances are, the tenants will have a tough time finding a place these days.  

2. Cash for keys can also help ensure it is vacant by closing if the leases are up further into the future.  I am a big supporter of putting it into the contract to be vacant by closing so you don't have both a tenant problem but also a living situation problem.

3. Find one already Vacant

4. Line up closing around one of the lease end dates. We just don't like closing on a househack property fully occupied. This could result in issues if they don't actually move out since now it's yours. I also have had one situation with a VA appraiser about 10 months ago that made the appraisal subject to one of the tenants moving out and the buyer couldn't close unless one of them moved out.

We ran into a similar issue here in Hampton Roads. Seller would not take any FHA offers at all because of this self-sufficiency rule. My buyer was in the same situation, he could qualify for a single family priced much higher than this particular multifamily without needing rental income. Our lender didn't think it would matter but we never found out because they simply wouldn't consider the buyer. There needs to be clarification on this. Interested in this thread and looking to see if anyone else has encountered this.

I agree with @Conner Olsen above.  I am a Realtor and househack as well.  I am currently in a single family house hack.  I include utilities in the rent and the tenants are perfectly fine understanding that they pay a little more for the room but everything is taken care of.  I set up payments through RentRedi.  I love this platform personally.

As far as the lease and renting to friends:

Yes, have them on a lease.  Rules need to be spelled out up front.  Renting to friends is a personal choice depending on your comfort level with mixing business and friendships.  At the end of the day, rental property is a business.  If they don't pay, they don't stay.  Period.  Unfortunately being "understanding" of hardships or being too accommodating can get you screwed in this business if you are a people pleaser.  I learned the hard way. Be very upfront with the terms and let them know, the lease is not flexible and the terms are to be followed explicitly to protect both the tenant and owner.  It can be very tough to 1. have this conversation with a friend, 2. enforce the lease if things go south with a friend.

For group living/househacking I get higher-end Scratch and Dent from local used appliance companies that take in a lot of perfectly fine appliances with small dents from the big stores.  Most of these companies will also warranty their products for the first few months at least.  Yeah, I have had a couple duds but our used appliance guy here will swap them within 3 months of purchase at no charge. See if you have one of these near you. If you find a good local used appliance company, you can save thousands on appliances.  Plus, they will take a beating anyways in a group setting so scratch and dent is the way I prefer to go as long as the scratch/dent isn't crazy.

I would recommend looking to see if you get lucky and find what you need here before investing full price into a new appliance that will take a beating anyways.

Depending on your market, you may be able to find deals on market but I know that isn't the case with many markets. We have luck here with both on and off market. Find a well connected agent that can bring both on and off markets to you. Many well-connected investor agents are on most local wholesaler's buyer lists and know how to work this type of transaction even if you are VA or FHA. Find a househacking agent that also understands transactions outside of the typical resell.

If the contractors state it is in good working order, I would let the tenant know that they are at liberty to get a window unit for additional cooling if they desire.

Haha, househacking was the best thing long term but can be a headache in the short term.  A little bit of pain now for prosperity later - thats the motto with this game haha!  Keep it up!

Reach out to the lender to find out why it jumped.  Sounds like the seller is doing what they agreed to in the contract.  Looks like people above already answered the home insurance so I won't go into that.  For the tenants, If per the contract the seller is to provide notice to vacate, that's all they need to do.  If they don't that is now your issue.  Usually when inheriting tenants renting at below market rent there is risk.  On Defense, I would highly suggest talking with a property manager that knows how to get them out if things go sideways or studying the eviction process for your state.  It will save you a lot of stress and time if you are familiar with it before going through it.  If the eviction process isn't followed to the tee, it can last a lot longer than expected depending on the State.

Regardless, take notes and learn.  Real Estate Investors all make mistakes at some point, just don't make the same mistake twice.  As yourself how to better approach the same situation next time. (: