All Forum Posts by: Craig Parsons

I'm working a flip in a commuter town about 60 miles south of San Jose CA. Current house is 2500 sqFt 4 bed 2.5 baths. We will be installing new cabinets, floring ,paint etc. All of that is pretty cut and dry. One of the major deficiencies of this property is it has no garage. This house sits on 5 acres in a 'ranchette' subdivision. Every other house has at least a 2 car garage. Many have Barns and some have and ADU. While I would like to add an ADU I do not have the time for the permitting process. I can however relatively quickly add up to a 500 Sqft garage. (larger would require fire sprinklers). Although this would add a few weeks to the schedule. Is it worth it? What kind of questions should I be asking and what kind of a return should I get? Is just the fact that no garage could be a no go for some buyers enough to build it even if it only raises the value by the actual cost?

Is it like Watsonville Santa Cruz County or Pescadero. How long do you want to stay there?   Personally If you like your current residence and hope to stay there long term I would forgo major improvements on my primary and use all investment savings to make you more money and cash flow.  Hopefully in just a few years the cash flow can help fund your Primary rehab and enlargement. Yes 1k sqft is small but probably much better than living with family. I have not done much work to my personal home in Hollister since it wont make me any money in the short term. I feel my money is best spent building a portfolio of cash flowing units.

Quote from @Dan H.:

Some of the advice above is not well thought out or not aware of the rules in CA.  My thoughts:

- best advice above is to get a good attorney that specializes in evictions. 
- Who ever told you that only 30 days notice is required does not know CA law.  You need to provide 60 days notice if they have been a tenant more than a year.  Hopefully the attorney informed you of this

- selling a long owned CA property that likely has significant appreciation owned by someone going into long term care is crazy stupid.   At death, the property gets a stepped up basis.  For appreciating CA properties this could easily be a 7 digit step up in value but i would think in all CA markets would be significant.   In addition due to prop 13, the tax base is a fraction of if it sold today.   This can save thousands annually.  This tax base benefit goes away at your father’s death. Much better off paying the eviction lawyer to do what they do than give up those 2 benefits.   The savings from either will be many times the cost of the lawyer.  Selling before death would be a costly mistake   

- you did not explicitly state this was not a multi family but it seems likely from your description.   Single family homes are exempt from rent control everywhere in the state.  The implication is your ex-wife cannot simply choose to stay beyond a 60 day notice.  An eviction will make it challenging for her ever to find a quality rental in low vacancy areas.  I hope your attorney has explained this to you. 

Have the lawyer deal with this.  Realize there will be a cost but also realize the value in a highly appreciated property in CA and the consequences of selling.  You will likely save 6 digits on the gains as well as 4 digits (maybe 5) on property taxes annually by waiting until death to sell the property.  

Good luck

Thanks Dan  Yes  we are not selling for the reasons you mentioned and yes we are talking 7 figures of appreciation . I was under the impression of 60 days as well. I am not sure if the Legal person I talked to understood the length of her time there so that could be the confusion.  The goal is to rehab this house then rent it to a qualified tenant until my fathers passing, at that time he has it in the will that the property is to be sold and then the profits are to be divided up between the family.  Our biggest problem is getting her out so we can do a proper rehab 60 days of dead dime waiting for her to vacate is not Ideal obviously.  I do  think your point about having an eviction on her record is a bit of leverage though.   The other potential problem is the term of the proposed renter not sure exactly we are going to deal with their lease when it comes time to sell.  

Quote from @Craig Parsons:

Quote from @James Wise:

Quote from @Craig Parsons:

So this here is a hot mess.  My Ex-wife currently lives in my fathers home. She has lived there for 8 years paying no rent as he was trying to help her out.  Now the situation has occurred that we need to rent the house out in order to help pay for his long term care expenses.  We have told my ex-wife that we are willing to let her stay in the house for a time but she needs to pay rent. She refuses to pay rent and says she cant be out until April. We could possibly live with her staying there until April but I do not believe that she will even leave then. My father just went into the long term care facility on December 23rd so the circumstances regarding the use of his house have definitely changed. Someone in the legal profession told me that we can give her 30 day notice and then proceed with an eviction.  We have offered to allow her to pay a reduced rent for the first few months as well but I am worried that may create some sort of limit on how much we can raise the rent on her in the future. There has never been any sort of lease signed nor has she ever paid anything more than a few electric bills which are next to nothing since he has solar.  Help please!!!!

 Have you considered domestic violence? If that's not an option, hire an attorney and evict her.

 I would never consider that. Really I wouldn't would I.....  Anyways we are working with an attorney now.  

 Funny story is my ex wife's mother went to grammar and high school with OJ. And we all know how that domestic violence turned out

Quote from @James Wise:

Quote from @Craig Parsons:

So this here is a hot mess.  My Ex-wife currently lives in my fathers home. She has lived there for 8 years paying no rent as he was trying to help her out.  Now the situation has occurred that we need to rent the house out in order to help pay for his long term care expenses.  We have told my ex-wife that we are willing to let her stay in the house for a time but she needs to pay rent. She refuses to pay rent and says she cant be out until April. We could possibly live with her staying there until April but I do not believe that she will even leave then. My father just went into the long term care facility on December 23rd so the circumstances regarding the use of his house have definitely changed. Someone in the legal profession told me that we can give her 30 day notice and then proceed with an eviction.  We have offered to allow her to pay a reduced rent for the first few months as well but I am worried that may create some sort of limit on how much we can raise the rent on her in the future. There has never been any sort of lease signed nor has she ever paid anything more than a few electric bills which are next to nothing since he has solar.  Help please!!!!

 Have you considered domestic violence? If that's not an option, hire an attorney and evict her.

 I would never consider that. Really I wouldn't would I.....  Anyways we are working with an attorney now.  

Quote from @Greg Parker:

Thats a mess. Find her a new boyfriend she can move in with.  Pay him cash.

LMAO now that I would do  but it wouldn't be very Gentlemanly to wish her on anyone.

Quote from @Greg Parker:

Yep, lawyer.  And, then offer her some cash to sign the paperwork.

She has somewhere in the range of $150,000 to $200,000 in free rent. I know it may be against my best interest but I cant bring myself to give her cash for keys. I would rather call the sheriff. I know Im being petty but.......

Quote from @Mike Dymski:

He should just sell the house.

Separately, I would not rent to her.  She freeloaded off your dad and now wants to screw him over again.

I do not want to rent to her but I cant just kick her out since its California  and to sell the house requires rehab which makes her think she can stay longer.

Quote from @Theresa Harris:

If she's lived there 8 years rent free, what is her excuse for not moving out? She can move to a short term rental at the start of Feb until she finds a place.  Was there something in the terms of the divorce that allowed her to live there rent free?  

I agree with the others who said you should sell the house.  That is reason enough for her to move.  Selling it now vs renting, will give your dad more money and he won't have to worry about renters or cap gains.  He can put the money into a savings account.

Her excuse is that she had to pay off her student loans because I left her high and dry after our divorce. LMAO.  Funny how she managed two 10 day plus oversea vacations per year for the past 8 years.  

We could sell the house invest the money and pay his bills with the  investment proceeds but in order to do this we need to rehab the house which will still take a few months and obviously she needs to leave before we can put it for sale in order to get the best price.  

I'm not sure why selling now vs renting will give him more money. The rent plus his retirement will actually produce positive cash flow. But I am willing to be wrong if someone can explain it to me.

So this here is a hot mess.  My Ex-wife currently lives in my fathers home. She has lived there for 8 years paying no rent as he was trying to help her out.  Now the situation has occurred that we need to rent the house out in order to help pay for his long term care expenses.  We have told my ex-wife that we are willing to let her stay in the house for a time but she needs to pay rent. She refuses to pay rent and says she cant be out until April. We could possibly live with her staying there until April but I do not believe that she will even leave then. My father just went into the long term care facility on December 23rd so the circumstances regarding the use of his house have definitely changed. Someone in the legal profession told me that we can give her 30 day notice and then proceed with an eviction.  We have offered to allow her to pay a reduced rent for the first few months as well but I am worried that may create some sort of limit on how much we can raise the rent on her in the future. There has never been any sort of lease signed nor has she ever paid anything more than a few electric bills which are next to nothing since he has solar.  Help please!!!!