All Forum Posts by: Eugenia K.

I'm planning on renting out my condo after purchasing an owner-occupied investment property, and am considering doing some renovations. While the location of my condo is strong, the finishes are dated. I'm considering doing updates like bathroom flooring, kitchen counters/backsplash, etc to modernize the space and make it more competitive to the newer construction condos in the area.

How should I think about this investment considering rents during COVID are ~30% below pre-COVID levels, and there would be wear and tear on the new finishes long before rents return to "normal"? Given long term rents are so low and I think the condo location is so strong, I'm considering giving it a go as a short term rental. How would you compare the ROI of these improvements on a long term vs short term rental?

I'm working on an offer for a 4plex that looks to be in great condition. The seller provided a pre-inspection and sewer scope, along with several photos and receipts of recent renovations. It is likely going to be a competitive deal, and I was wondering how common it is to waive the inspection contingency for a residential multi-family property?

I'm considering not waiving the contingency but instead shortening the inspection period + making it clear that I am not looking to haggle. 

@David M. thank you for your thoughtful reply! I'm looking at 2-4plexes, and was told by my mortgage broker that I'd need at least 20% down in order to avoid MI. 

I have reached out to understand what the MI delta might be on a conventional vs. FHA. I had been looking at 20% on a conventional up to this point. The ~50bps difference was between 20% down on a conventional (ex. 2.875% with 0.5 points) vs. 15% down on a FHA (2.25%).

I've been looking at investing in my first small multifamily property with 20% down, but recently started exploring putting 15% down in order to hold on to more cash (to invest in my next property) and pay the PMI (or MIP). Given interest rates are at historic lows, how do you think about the decision to pay MI? Any good calculators to weigh my options?

It seems like I should be optimizing for using the least amount of my own cash as I can (while holding on to a good chunk of equity) and finding ways to earn a greater return with that cash than the MI. 

More details:

• I have very strong credit
• I plan to hold the property for a long time (20-30 years)
• The property would be in a high appreciating but low cash flow market
• I would be owner-occupying
• It looks like if I go the FHA+MIP route, I'd save 0.50% on the interest rate

I'm weighing putting in an offer on a duplex that has an additional non-conforming unit in Seattle. I'm wondering how home insurance (and for the renter, renter's insurance) works on the non-conforming unit. Would it be covered?

Great points @Michael Haas! I heard from the city the option to convert to SFH + 2 ADUs, though was wondering if that approach might have any negative impact on appreciation and/or desirability upon resale. Do you have any thoughts on this? If one is converted under the low income housing requirement, I could see that not being so attractive to other investors/house hackers?

I am considering legalizing in order to buy a 3 unit for less than the cost of a triplex. I would be occupying the non-conforming unit in the interim of making any updates to code. I understand that if I were to rent the unit out while non-conforming, there could be risks to insurance should there be something like a fire. 

I am actively on the market for 2-4plexes in my area, with the intent of 1031'ing several of these into an apartment building (or some other commercial property) someday. I'm wondering what advantages there are in acquiring a portfolio of these smaller MFH (aside from serving as a warm up to make the switch to commercial), and if there's a case to be made to never make the switch to something larger?

One clear advantage is the relatively cheaper financing and availability to owner occupy. I've also heard second-hand that rent control is usually imposed on larger landlords. However, I expect that managing several addresses will result in more tenant/property manager headache and lower economies of scale on expenses. 

Thanks @Carmen Dettloff! Would you be able to share a ballpark on what the remodel/approval process might cost? And same here!!

There appear to be a handful of grandfathered duplexes with non-conforming AADUs on the market! I was wondering if people had experience with and/or perspectives on legalizing the 3rd unit by converting the duplex to a SFH (which then would have 2 AADUs)?

Wondering how this might impact:

- Appreciation and buyer desirability 

- Financing (after buying with a 2-4plex interest rate initially)

- Cost to legalize

Example listing: https://www.redfin.com/WA/Seat...

So helpful, thanks @Thomas Mattausch!