All Forum Posts by: Robert Kohnfelder

Hey everyone. I just bought a house that needs plenty of rehab and renovation in order to get it where it needs to be. That is, a mid-grade (B class?) rental in a pretty good area of Pittsburgh. We have begun doing most of the large projects/repairs, and intend on being finished with that type of work by the beginning of March (jacking the house up, leveling the floors, replacing the kitchen, etc.) so that we can get the finishing touches (exterior work, landscaping, etc.) wrapped up for an April 1st tenant. I know things can quickly change, but that is the current plan.

My question is this: When is the best time to get my rental listing posted on websites? I have had no problem whatsoever finding tenants with quick turnarounds for a nearby duplex, but they haven't needed any major work done, so the pictures and descriptions are pretty much ready-to-go at a moment's notice. For this SFH, I'm not sure if posting a listing without pictures makes sense, especially this early, but if the work isn't done until mid-March, that may not be enough time to find a quality tenant for April -- my opinion is that people renting/moving into houses are looking to lock something up more than a few *days* before their lease ends/begins, whereas I've had tenants in my duplex units lined up just a week before their current lease ends...

Does anyone have any experience with a dilemma/situation such as this? I was thinking about posting a listing with the updates that are coming, along with basic house info, just to get a few interested tenants lined up (conservative route). However, I think the finished product (and pictures) will be much better in order to get a wide range of quality tenants (upside route)... Thoughts!? 

Hello All,

I recently closed on a fixer-upper behind my first property, a duplex that was owner-occupied before we moved out and bought a SFH. We now rent that duplex out for a pretty penny, and the new SFH/investment property is located directly behind it, sharing a property line (overgrowing across it!) and an adjacent empty lot as well. I bought the FSBO property by making a great connection with the owner and being somewhat relentless from Day 1 after seeing the for sale sign in the yard. With a wedding and other expenses looming, we weren't necessarily in the market for our next investment (although I am always willing to consider), but this opportunity was too hard to pass up. Having said that, we put 20% down and secured financing in order to make it happen. Anyway, with a strong feel for our area's rental market and a desire to keep the property for the foreseeable future, we have firm plans to rehab the property and keep it as a rental. I am extremely confident that this was a sound investment based on many factors, including the purchase price, which came in much lower than appraisal.

So, my question(s) are: once we put the cash into rehabbing the property and have solid rental income here in a few months, what is my best option for refinancing in this scenario? Just to offer some ballpark numbers... Assume we purchased the house for $60,000 with 20% down and plan to spend around $20,000 in order to rehab it to where we'd like. Let's say the house will have an ARV of roughly $150,000... Being somewhat familiar with BRRRR, my goal IS to purchase another rental/investment property (and many more) as soon as possible, but with some upcoming wedding expenses, I just want to know a few options that I can discuss with a bank/lender. Any recommendations would be awesome -- let me know if there are any questions I can answer to help.

Any responses at all are greatly appreciated in advance!

Happy Holidays!

Hard to make a top three with so much uncertainty, but a few areas I'm confident will increase in value are Beechview, Crafton, Carnegie, Brentwood, Allentown, South Side Slopes... just to name a few. Born & Raised in Mount Lebanon, always tracking neighborhood trends (especially in the South Hills) and friends with some great local realtors who can say the same. I currently reside/invest in Mount Washington -- it's been an awesome area thus far, but I wouldn't call it "under the radar" anymore. I just closed on a FSBO home behind my house this weekend, and I'm very intrigued (excited) to see what a few repairs + improvements can net me in rental profit a few months down the road. And as someone who lives just up the road from Allentown and South Sides Slopes, I get a real sense of hope and potential from these spots. Crime is still far too frequent, but from an investment standpoint, I feel there are still plenty of cheap run-down properties in the area that are ripe for the picking for rentals or flips.

@Glenna Wood that is all very helpful information... and another question, if I bought the property with my girlfriend and her name is on it as well as mine, would we be further dividing up (in half?) all of the percentages you mentioned above, plus the rental income we received? Is this something that is necessary or just a preference based on tax return amount? As you can tell, this is all very new and confusing haha... Any input is appreciated!

@Glenna Wood this is an interesting idea... So if I went this route, would I be better off claiming each of the units as "multi-family" or "single family" properties? Does that matter? And when given the option to enter "personal use", would that just be the amount of days I lived in the unit and did *not* rent it out? 

Thanks in advance!

Last year's online tax return (turbo tax) was fairly simple from what I recall, as I had no major confusion selecting that I lived in the property and also rented it out. This time around, I can't find a clear-cut choice to select when describing the rental property I no longer live in. I lived in it for about half of 2019, but did not end the year living there. I tried using TurboTax again as well as H&R Block this year, and I've run into the same roadblock on both sites. My options are basically as follows:

• -It's a spare room I rent out in my home.
• -It's multi-family housing and I live in one unit.
• -It's property that changed from being my main home to a rental in 2019.
• -It's rental property I (or my family) used personally for one or more days in 2019.

The third option makes the most sense, but then it goes on to ask how many days I used the property for "Personal Use", which doesn't seem quite right to me (but as a tax novice, I could be totally wrong here). Is this a correct option? Should I go get my taxes done by a pro? I'm really just looking to do this the right way, but would like to learn for myself and for the future -- even if it means sitting down with a pro this year.

Any advice/opinion is much appreciated. Thanks!

Update: I bought a SFH in summer of 2019 and I have no regrets. My fully-rented duplex is paying for 100% of my SFH mortgage, and I have been able to save up enough for some important trips/investments with my family and girlfriend.

Not sure what my next purchase will be, since I'll hopefully be acquiring another investment property by the end of 2020... Great early success with the duplex has me leaning towards another multi-unit if the right one surfaces, especially since I'll be staying in my current home for the foreseeable future. It's just the down payment that scares me away from another multi, because I don't want to own 3 homes (possibly twice as many units) without a sizable emergency fund in my bank account...

Anyway, just wanted to update this post and say thanks - any additional insight is always appreciated, since this is a topic that is sure to be an on-going debate in my mind.

Happy new year!

@Ki Lee I'm also in a very similar situation... I have some debt to income issues (thanks to student loans among others), but own/occupy a duplex as well. I'm looking to add another multi-unit but don't want to move into it myself, so I'm guessing I'll have to put 25% regardless. In terms of finding a place with good cash flow potential and factoring that into DTI ratio, I'm curious to see what others think here.

@Jeremy Taggart Thanks for the insight. Really good points you made... I do like the idea of possibly looking into a SFH that would serve as a slightly longer-term living arrangement with the end goal of renting it out in the next few years. Ideally I'd pursue another multi-unit but that 25% mark is daunting at this stage -- don't want to go house broke.

Also, @Nicole Duncan I agree that paying the entire mortgage without any rental income from the property will be very different, but I don't know if I'm ready to jump into another multi-unit as an owner/occupant. If I could save up that 25% on a reasonably priced multi-unit, I think it would sense to purchase a 100% investment property and start raking in rental from each unit, no? I understand it would require more money down, but if the 25% down payment were no longer an issue, I tend to believe that would be the best move.

Thanks for the input. I wouldn't say I "need" a SFH, although I would also be occupying it with my girlfriend, which is what I'm currently doing in half of the duplex we own. However, I'm just not sure how I feel about constantly moving into the new multi units that I'd be interested in. I'd rather do a SFH for the purpose of settling in long term (and getting more investments later), or just buy an investment property that I can rent/manage without having to move out of my current situation yet (and get that SFH later). Not sure if one makes more sense than the other.