All Forum Posts by: Joseph Shevy

Thanks for the advice/suggestions/insight everyone! I got a lot to consider it looks like and in setting up exactly what I want to do.

Joe

 Hi Damian,

Yes that is true. Then again, I will likely be in this property for a while to renovate as it is. I may end up being here for that long. The plan is to renovate the top unit as we reside there, and when the bottom unit tenants move out, (October) then we will move downstairs, rent the top, and renovate the bottom. Thanks for the insight though.. You are probably right in the fact that they will want a reason.. I guess I will have to see how it work out..

At the end of the day, I wanted to renovate the units anyway. If i dont end up refinancing, I'd be collecting higher rent (assumably) on the same monthly expenses I have now. Thanks for your input!

Joe

 No.. I would not be raising rent due to refinancing... I would raise rent due to a newly renovated unit.

And yes, that it something to think about. Renovations will all be out of pocket, I'm a good little saver. Thanks for the response!

Joe

Welcome to BP!

I was/am in your shoes not too long ago.. Im 23, graduated from college about 1.5 years ago, with accounting degree, job in accounting, and I just bought my first duplex on 3/31/15. Very similar backstory! Goodluck with everything and its always a good idea to work on your credit score regardless!

Joe

Hi BP,

I just purchased my first property on 3/31 of this year through an FHA loan. It is a duplex and I am living there now and going to start renovation very shortly. The house was appraised for 107k and I have a note on it for 100k. The property was in fair condition.. It had nothing to desirable inside the house, but the location is good.

My idea right now is to fix it up, (both units), to something a lot more desirable.. This way, when I move out, I can get more rent/unit and put sweat equity into the house. Now i'm wondering... If I could get the value of this property re-appraised for 125-130 through renovation (which I think is possible after seeing what it looks like as it is), would it be worth it to refi to a conventional loan to drop the monthly mortgage insurance payments?

My idea was that, if I could refinance through a conventional, I could increase my monthly income on that property, and use a new FHA loan on another property with 3-5k down again. This would make it very easy to get into a second property.. and perhaps repeat the process.

There are a few things I'd have to take into consideration: whether my renovation would bring the loan value/appraised value to 80%, refi costs, whether a bank would go for it, etc.. 

I plan on doing renovations regardless, since we are living in the property it will feel more like a home to us, and I could increase the rent income/property value at least some. 

Let me know what you think! I don't know a lot about loans and stuff yet, but I am learning a lot as I go. All opinions and suggestions will help.

thank you!

Joe

Thanks for the advice guys! I went over there last night and they gave me only part of the rent.. I told this tenant that they need to pay another payment next week in the full amount of $550 and to have $400 by the 1st. (or 5th for grace period.) And If they can not come up with that, I am sending a 5 day notice. I am NOT dealing with this stuff. Everyone has bills, everyone has excuses. The bottom line, if you cant pay me, you are costing me money every month. 

We will see what happens. 

PS. I was very firm with the lease agreement and that even though im much younger than them, I mean business and will not let them take advantage of me. Thanks for the help everyone :) 

Joe

 I will continue to go over the rental laws. And yes, I received their security deposit in the form of a credit at closing. And if one month goes by and they only payed the $400 at the beginning of the month, then if I have to wait until the 5th or 8th or 10th of the following month to file for eviction IF NEEDED, then thats the case. I don't see that happening, but thats my thought behind it. If they get behind, and something like that happens, and I keep their security deposit, then so be it. 

Not the best situation to be in, only 8 days after closing on the property, but I will deal with it I guess.. with much needed help and advice from you guys of course.

Joe

All great points. Thanks everyone. Ive concluded that I am not going to do the weekly stuff. I think what I am going to do is keep the payment contract the same: rent due on the 1st, late fee of $25 after the 5th. And I will let them do $400 on the 1st and the remaining $350 + $25 late charge on the 15th to work with them a little.. like most of you said, its not my problem that they cant handle their money.. That being said, I do want to work with them a little. They said they will probably want to leave once their lease is up, So August 31.. They are very clean, and dont break anything, so I think I will take this chance.

what do you all think about that?

Hi BP,

Quick question.. looking for some good advice!

I just purchased my first duplex on Mar 31, (yay!) and I will be living in the top apt since it is through an FHA loan. The bottom tenants are very nice people and are already a little slow with payment.. They are giving me the rent today that was due on the first.. 7 days late. Not a huge problem, to be honest, but its not a great sign. I texted them today and they want to set up payments due every week instead of every month.. so instead of 750/month, it will be 200/week per the tenant. Thats an extra $50/month. She said it will help her budget her money and enable payments to be timely. Should I do this? My brain says yes.. just want to take the proper precaution. Is there anything I should watch out for, or is there anything I should do beforehand.. (such as making a new payment contract?). I really want to work with these tenants, and definitely don't want to have to evict them!

Friendly advice?

thank you!

Joe

Thanks everyone! 

@Brandon Turner, i love the idea of house hacking! 

@Eric Munson, My plan is to become addicted ;)