All Forum Posts by: Duane Ward

Was listening to On the Market episode 64 and Amanda Han stated that 1031 exchanges could work on house hacks. Anybody know if this could apply to a mother daughter Adu to a duplex? The Adu was rented by family so that did make it a legal Adu. By theory, that should qualify it for the 1031 in regards to it being an investment property right? It fits the other 2 criteria I'm aware of. Lived in the property for 2 of the 5 years and it was a double closing exchange of properties. 

By your understanding, would this qualify for a 1031 exchange? We already know we qualify for the capital gains exclusion per our CPA.

Quote from @Rick Bassett:

Quote from @Ron Brady:

Were we in your shoes, we'd offer them two options. 1) 6 month lease with higher rent, 2) 12 month lease with lower rent. Tenant thus pays a premium for the flexibility of the 6 month lease. Best wishes.

Given where you are now, I like Ron's suggestion. But I would not have let the tenants get into the driver's seat in the first place. I would've offered them a six-month or an eighteen-month lease back when they first came in to keep the property on track with the clear understanding that all renewals must be twelve months. 

We originally offered 6, 12 and 18 month options. We needed them to ideally do the 6 or 18 because it would put us into the beginning of rental season if they decided to exit. The tenants have their own home. The husband is in the process of transitioning his business to the new owners. So the place is one that they use JUST in case he's working late and doesn't feel like driving home. Their fear is they won't need it at some point and will be stuck in a lease that doesn't allow them to leave for a long time after they no longer need it. 

My first thought was def to increase the option for the 6 month as a convenience fee while the 1 year would remain lower as somebody suggested above. The idea of having an early out clause seems intriguing as well. Originally they were told that the one month was a one time offering. I'll most likely use a combination of the suggestions mentioned above.

We're also on long island and a out to start attending meet ups. Suzanne is an awesome resource and even helped us get our first tenant. Let's connect and meet at one of the meet ups or beforehand if you're up to it. Which part of LI are you in?

We ended up having to get our first tenant late in the season. Needless to say, we didn't get the price we wanted for the rent. However, we offered them a one time opportunity to have a 6 month lease to start. This way, if they decided to leave, it would place us at the beginning of the rental season. Their lease runs out next month.

Our problem is they are great tenants, but they want to continue doing 6 month leases which aren't beneficial to us. For them it works cause they aren't sure how long they will need the place. So do we take the risk and push them into an annual lease knowing they might walk and take our chances with the season, or do we give in to the 6 month lease and hope they bow out at the 6 months that are best for us?

Quote from @Joe Villeneuve:

You do realize (at least you should have realized) you answered your own question,...right?

Take the two scenarios, play them out virtually, and see which one gives you more/less control, and which one has the worst potential ending.

Keep in mind, in the end, your choice may be between no deal or ending up having to carry a bad one for a long, long time.

I find that 90% of the problems have the solutions buried right in the problem,...hidden, in plain sight.  You just have to train your brain to know what to look for, your eyes to see it when you're staring right at it, and the will to accept the solution...or the consequences if your don't.. 

Yeah I figured I had, just didn't know if I was seeing it from only the angles I'm familiar with with my limited experience.

So what happened was, the lawyer negotiated a closing date without checking with us. When we responded that it wouldn't work, he called with his para on another phone and they both started yelling at my wife, who was handling it at the time. His level of unprofessionalism and disrespect was enough that it made me feel I couldn't trust him any longer to fight for our best interests. 

Everything is done in the deal except for the closing itself. The main concern is we would be inheriting a tenant who is leaving less than a week after we close. So I wanted to ensure we had anything we needed legally to make sure the exit was above board and wouldn't come back to bite us. Our agent did an amazing job in handling the situation with us. 

However, after the interaction, I just don't have faith he will act without malice on our behalf as we near the end. I'm fully aware that during this moment since we're paying him, he works for us in this transaction and thus the contract holds him to certain standards that are legally binding. However, we all know people who use loopholes when disgruntled to not go the extra mile legally. Since it's a duplex house hack from a double closing and it's taken SOME time to get here, blowing it up would cause us to possibly not have a house for some time. It could also put us in the position to lose our locked rate which could cost us even more with a new rate. So that's the long and short of it.

I know my options are limited in this late stage and feel there's not much I can do without it costing us big. So I was wondering what others with more experience have done with zero hour failures within your team.

When a lawyer no longer has your best interest in mind and you're almost to the finish line, what are your best options? If you switch, it can potentially destroy your deal or cost you tons of money in recovering the closing. How do you handle people on your team not handling things to your satisfaction at zero hour?

My wife and I are a few weeks away from closing on our first investment property. I have used various software in my other businesses with quick books self employed being the most recent one. I like many things about it, however to me, its better for overall money tracking not specifying details of multiple streams of income like various properties, etc. I'm wondering if there's a better one for this particular venture of real estate investment. One that I can do overall tracking, but it also allows me to break out the details if individual properties so I can track multiple rents, etc. One that I can track expenses from the various tenants, etc. Is my best bet to build my own that does everything I want it to or there one people generally use?

We're getting ready to close on our first investment property. Theres an opportunity to expand the one of the units in the duplex. What are some good resources to understand what people may be after more in that particular market in a rental? 

ex: the apt is a 1bd 1ba that we're debating on expanding into a 2 or 3 bd 1ba. This would take away from the other unit which is 5bd 3 ba converting it to a 4 or 3bd 3ba. 

Essentially trying to understand what people moving into the area may be seeking so we know if it's worth the dollars spent to go for the extra bedroom.

Quote from @Ben Wagner:

You'll need to check with the building department. Most likely a variance will be required and you'll have to submit plans.

Ah OK. We had a property in East rockaway and the building department just told us a flat out no when I inquired lol originally wanted to turn it into a 3 plex unit. Have you found many neighborhoods that allow more freedom with conversions or expansions?