All Forum Posts by: Devin Mills

@Daniel Lynch you should absolutely charge your girlfriend rent to live with you especially since she is your girlfriend and not your wife. I was in the exact same situation as you. I put the full down payment for the duplex, and my fiancé had barely an emergency fund saved as she was aggressively paying off her student loans. She helped renovate the duplex and we got it to the point that the other side covered the mortgage and all expenses. I still charged her rent (about 80% of market rent) and I paid the same, putting both in my landlord checking account should any unnecessary expenses come up with the property. Now we are married and do a % income split based off how much money we make, with leftovers after expenses being reserved for future down payments on more property.

A few months ago I bought a duplex.  I fixed up and am now living in one side, while the other side is rented by a couple who has rented their for 17 years.  Their rent has gone up marginally over the 17 years from $610 to $700 per month.  Based off of comps, I should be getting $900/month.  Their lease expires at the end of November.  The fact that their lease ends right before winter in Ohio is not ideal as not many will be looking for a place.  

I have narrowed my options down to a few. 

1)  I could not renew their lease and fix up their side (which would take 2 months to renovate) then try to get it rented in February.  Remodeled it should be able to rent for $1,000/month. 

2)  I could offer them to renew their lease upping it from $700/month to $800 or $850 to get it closer to market value.  Which would be a shock to them but necessary if they are staying.

3) Since winter is not an ideal time that renters are looking in Ohio, I could renew them on a month to month at their current monthly rate or new increased rate and give them an ultimatum to sign a year long lease in March or move.  That way I could get them on a year lease or get them out and fix it up by Summer when more renters will be looking for a place.  

They are good tenants who keep to themselves and pay on time however it is obvious that they do not pay market rent and their side needs remodeled in order for me to get maximum value and make the numbers work.  I have the cash to fix up their side, however the odd timing of their lease is putting a wrench in things.

Thanks for your suggestions.

 I would love more details on what specifically this vinyl plank is called and where I can find it.  How much did it cost to have it installed since you had someone do it? 

Yes one tenant is month to month. The other is a year long lease that ends in November. Getting the current tenants and owner to fill out an estoppel agreement to prove what each is paying monthly, security deposit, and what they own.

 Brandon, so with this deal. I am estimating closing between 181K-184K with repairs needed of roughly 20K.  With that information and based off the comps this would seem to fall around the area of the other 2 comps.  Rents would need to be upped to what to make this a good deal?

Robert, Location is the most important thing for me and my fiancé. We both grew up in Westerville and love the area. She works at Easton I work at Polaris. To me, the numbers aren't great but are good enough for where I want to be. We were originally looking in Westerville at SFH for around 175K and 1300 or 1400 square feet. Seeing SFH that high when I don't have a family and need the space is when I switched my mindset to a duplex. So compared to SFH I think the deal looks good, compared to other Multi-Family probably not so much.

7598-7600 Cortina Court was the other duplex I was looking at that was listed at 250K and sold for 270K.  In a similar neighborhood and only 150 sq feet bigger.  That one to me seems very overpriced and this one is more reasonable even with the repairs.

Let me know your further thoughts on the deal.

So after months of looking I finally offered and had a contract accepted on my first duplex.  It is in the Columbus, Ohio area in a B quiet neighborhood with duplexes (don't have much info on comps because people have held these since the neighborhood was built in 1980) and nice single families in the 250K range throughout the neighborhood.  I am 24 years old and my fiancé and i were looking for a duplex to owner occupy and live for the next 10 years.  This meets her requirements of being a good enough neighborhood she feels comfortable in and my goal of house hacking using a buy and hold strategy. 

So, this property was listed at 190K.  The auditor's website says current seller purchased the property 4 months ago for $145K.  I got the seller down to 186K sight unseen and he accepted my offer despite supposedly having 4 other offers because i put 20% down and could close by the end of May.  Fast forward 2 weeks and I just had my inspection completed.  Repairs for both units are roughly 20K total including 1 new HVAC unit, rotted out floor below sliding glass door, new flooring thorughout.  I have asked the seller for a 6K credit to help with repairs. The current seller is an agent and he got a great deal when he bought the place in an off market deal 4 months ago.  However he has not lifted a finger to fix anything and will profit 30K+ for doing nothing.  I talked with the current tenants and not much has been done with repairs over the years.  Not my concern that he got a great deal but I want to make sure I am getting a good enough deal and not getting ripped off.

1 side is rented month to month at $730 (tenants have been there 8 years, but I will need to get them out to occupy myself).  The other side is rented for $700 on a year long lease thru November.  They have rented the place for 18 years and rent has stayed the same.  Needless to say I will likely need to kick them out and need the rent upped to at least 900 or 1000 month for the next lease which I believe i will be able to get after repairs.

So, would you take this deal? 186K contract price-6K in credits from seller+20K in repairs takes it up to about 200K total.  I want this deal to work but don't want to overpay, what do i need to increase rents to to make this deal work financially?

I am 24 years old and in contract on my first real estate deal which is a duplex in a B neighborhood where I will be occupying one side and renting the other.  Purchase price of the duplex is $185K and will need roughly 20K in repairs to get rents up to meet the 1% rule.  Anyway,  I am looking to find out whether I should go with a 15 year fixed (3.5%) or 30 year fixed (4.25%) mortgage.  I originally was going to go with the 30 year fixed however seeing all that interest in the first few years of monthly payments is killing me.  Why waste that money toward interest?  Is the fact that interest is tax deductible make this a little less painful and worth it to do a 30 year?  Do the majority of investors go with 15 or 30 year mortgages?  Wondering if most investors invest with 30 year mortgages and leverage their lower payment to buy other deals.  Any advice or experiences would be appreciated.

Thanks,

Devin

Brandon I am in the same boat as you.  Currently looking at duplexes in an area my fiance would feel safe in and found our first one pop up in our price range ($250K or less).   It's in Worthington for list of 250K and has 1 side rented for $1075/month.  Even if it is in a B to B+ area, I can't get myself to move away from the 1% rule for rental price/list price.