All Forum Posts by: Jo W.

@Jun Deng

I'm assuming that you already collected first / last / and deposit.

I'd charge the deposit if your lease allow it (Check your lease!) and tell the tenant that if he will find a qualified replacement tenant you will return his deposit.

@Paul Martinez 

I personally think that starting with a house hack is a great way to go as you will learn a lot during the process and there is minimal risk (If you run your numbers correctly of course).

I looked on prices in your area so i can give this example: if you can put 3.5% down (FHA loan) and get a duplex for 500K and the rent covers 85% of your expenses (PITI) you already cut your monthly expenses by not paying over 2K a month in rent so you can save money in a higher rate while getting equity as the mortgage is getting paid. 

@Nadir M.

You did not mention in what city it is so it's hard to answer.

In my market (Buffalo NY) i bought a two family home with a sec 8 tenant occupying one of the units, i had no problem increasing the rent to market value and my lawyer said that i can give them a 30 days notice to vacate (They were on a month to month lease).

"Should I try to avoid section 8 all together?" Personally i think that it's all depend on the tenant itself, sec 8 has a lot of benefits and my tenant is great so far. Be aware that you cannot deny an applicant bc he is a sec 8 applicant. However, you can deny based on the income.

Good luck.

@Bruce Chang

1. The original lease states that no pets are allowed. Is the verbal agreement still valid? Can we now reinstate a no pets policy and enforce the original lease?  

Once you purchased the property the previous lease is in place until you sign a new lease with the tenant. Most leases will have a clause stating that any verbal agreement would not take effect - check the original lease.

In the new lease you can set your own rules and policies. You did not mentioned in what city you are so just make sure there is no rent control rules that you need to follow.

2. Can we ask for a pet deposit? Old landlord only had a $500 deposit which is nothing compared to how much a uncontrolled dog can damage the property. 

You can create your own lease and rules. I would try to work with the tenant and make a payment plan to get the higher deposit or increase the rent to market value (If your market support it) and not asking for extra deposit.

I have a 7 month old puppy in my own house and when she was younger she did some damage (Chew some drywall and trim (But she's still cute :) )) but she grew out of that phase. If your tenant's dog is older you don't have to worry too much about damage (Of course there are exceptions). 

@Steve Smith

Great questions!

1. Should title be in llc name. If so will that cause problem with Mortage company?
If the title is not on the LLC name you have no protection. Technically speaking most if not all Mortgage companies have a "Due on sale" clause and when transferring title it's technically a sale. I spoke with a few mortgage brokers who claims that as long as the payments are made on time the banks don't care.  

2. Insurance in llc name? Will this also cause problem with Mortage company ?

Not a problem but sometimes you can see an increase in the premium - talk to your insurance agent. 

3. Can Mortage be in our name with title in LLC name?
My answer for question one should answer this. When you take a new mortgage for a new home you cannot do that but you can transfer the title after purchase and hope that the bank will never demand the whole amount within 30 days.

@Chris Rizzo
J. Scott famous trick: Go to Home Depot at 6 am for a couple days and see the contractors at the pro desk. Those are the people you want to work with.

Also referrals is a great way. Ask on your social media page - I'm sure you will find some people.

@Denice S.

Thank you for your comment i appreciate it.

Let me change the question , Will a kid under 6 would cause section 8 to regulate building codes more strictly or it's the same as any other sec 8 regulation?

I did not run a background, credit, landlord, and employment check as of yet so the age of the kid is not a factor. I just want to know for general knowledge so in the future i might change my investment strategy and invest in a higher class neighborhood :)

Hello BP members,

I recently bought a 2 unit SMF in a low income neighborhood (Buffalo NY).

I had to evict the upper unit and renovate, now starting to look for a tenant.

I priced it a bit high for the area and i have only one single mother with two kids (18 month old and a 9 years old) interested. She has a Sec 8 voucher and overall left very good impression. I did not run a background, credit, landlord, and employment check as of yet. 

A friend of mine who is also a real estate investor told me that having a kid under 6 year old will bring only troubles with sec 8 as they regulate the building codes way more strictly and can ask me to repair "unnecessary" things.  Did anyone experienced it and think the same way? Does it worth the extra $50 a month i can potentially make renting to Sec 8?

Best regards,

Jo  

@Reggie Maggard

We charge a $250 nonrefundable one time fee per pet.

Up to 40 lbs fully grown

We check with the insurance if they have some breeds that the insurance won't cover but other than that we don't discriminate :)

Good luck! 

Hello,

I'm currently house hacking (Duplex, i live in one unit and renting out the other one). 

My real estate agent contacted me today about a house that he think the seller is willing to sell for 140K and the ARV is 195 - 205 k it needs about 30k worth of work.

The area is much nicer than when i live right now and i can rent my current unit for $800 - $900

The taxes are 4K a year and insurance is about 1k a year.

I was thinking about getting a conventional loan (5% interest 10% down) and fix the house while i live there which means that i will do most of the work myself (So the rehab cost would be around 15 - 20 K) and sell after 2 years so i don't have to pay tax.

How do i run the numbers on it?

If i plug the numbers and don't account for the rent from my unit it looks like it's a bad deal but if i plug the rent of my current unit it seems like a 28% return a year not including the tax benefits.

I'd love to hear your perspective on running the numbers.

Best regards,

Jo