All Forum Posts by: Kayla V.

@Anthony Dooley I won't be occupying one of the units (it's out of state) but it would still be a traditional loan if it's a 3-unit. Officially converting it is an interesting idea. 

@Ryan Murdock I assume I could avoid that issue by being up front with the lender? 

Hi everyone. I'm looking at a 5-unit property. It's a house that has been split into multiple units but the tax records list it as a three family. 

How does this affect lending? Would this be a residential or commercial loan? 

Are there any legal ramifications to renting out five separate units if it's only permitted as a three unit? 

Thanks!

@James Carlson My husband and I own a house in Denver and we're planning on renting out one of the bedrooms part time on Airbnb. We've also been contemplating buying a condo downtown to Airbnb essentially full time. Do you know if it would be legal for one of us to claim the house as our primary residence and the other to claim the condo? 

Could you PM me with the date of your next seminar too? I'm just starting to research this as an alternative means of real estate investing. Thanks!

Hi @Chris Sellers. I live in Denver now, but I lived in Akron for all of 2016 on a short term work assignment and that is where I'm looking to invest. I'd highly suggest attending the REIA- there were several active investors and great networking opportunities. https://www.acreia.org/

Good luck and if you decide to go the wholesaling path and find a great deal, let me know! 

@Rich Zellmer I'll look in to that option- thanks!

For capital gains, we just have to have lived in the property for 2 of the past 5 years when we sell it in order to claim the exclusion. The depreciation we'll take in 2016 and 2017 is essentially a tax deferral- we'll have to pay income tax on that in the year we sell the property. 

@Christopher Phillips Thanks for the link- that's helpful. 

Welcome Daniel! 

I'm an electrical engineer down in Denver and while the market has gotten a bit high for me to keep buying in CO, the appreciation gains from 2010-now sure have been nice!

My husband and I purchased a primary home in June of 2015. In October, I was offered a one year work assignment and we took it and moved to Ohio for all of 2016. We rented out the house starting on 4/1/16 and the lease runs through 7/31/17, at which point we will move back in. 

We'd like to build a deck in the back. My husband thinks we should do it now so we can deduct the expense since it's currently a rental and it would be a benefit to the tenants. I'm leaning towards waiting until we live there again so we can oversee the construction and don't bother the tenants. Also, this feels like a Capex item that would be depreciated over time. Since it will only be a rental for another few months, I don't think we'd get much value out of the deduction.

Am I wrong and we'd be able to deduct the full amount in 2017? Thanks!

@Michael Wentzel I lowered the offer by $26,000. The house is in an A/B class neighborhood (670 Mentor Ave if you're interested), but needed updates in addition to the leveling (kitchen, baths, paint, landscaping, new furnace, etc). The walls were already cracking and the leveling likely would have caused more cosmetic issues that would need to be fixed. The numbers are:

ARV: ~$150K

Listed: $75K

Original offer: $62K 

Bank counter: $65K. 

Original rehab budget: $38K, including $5K to level the house (structural engineer said $1200-$4000 so I thought $5000 was safe)

New offer with $33K leveling quote attached: $36K 

They responded with "And we're done". I figured the odds were low of them accepting but it didn't hurt to try. With a $66K rehab budget, a purchase price of $62K-$65K didn't make sense.

@Ericka G. From what I learned through this, the price can vary widely. It cost me $250 to send someone out there and I would recommend you do the same before closing. I'm grateful I spent the money now rather than buying the home and finding out later. I only got one quote, so maybe they were just high, but I called about 6 places and they were the only ones I found that were willing to quote it before I owned it (although for a fee). 

The quote was $10.9K to permanently stabilize the walls (using a brace system), $14.5K to permanently stabilize the upstairs floors (new steel beams and footers) and $11K to waterproof the basement (new vapor barrier and sump). They then gave me a "preferred customer discount" (no idea why) of $2700 to bring the total down to $33.7K. The quote included all materials, permits and engineering. 

Update: I paid for a company that specializes in jacking up and leveling houses to go out there yesterday and give me a quote to fix the problem. The off the cuff numbers I'd heard from various contractors were between $1200 and $20,000 and the quote came in at $33,000.

Needless to say, I resubmitted a considerably lower offer and it was rejected. On to the next one!

Hi all. I've been searching for a rental property in Akron, Ohio and I found a short sale that looks like a good BRRRR. The main issue? The floors are noticeably sloping on the main floor and the walls are cracked all over the place. There is a report from a structural engineer stating the house is sound, but it's an old house on a hill and has settled significantly.

There is evidence they tried to fix it at some point- steel beams and footers in the basement and a newer wall along one side of the basement.

I've made an offer and got a counter from the bank. I'm getting a quote to jack up the main floor before responding, but I'm wondering if this is something I should just steer clear of? 

Thanks for any help, BP!