All Forum Posts by: Kristopher Sharpe

BP,

What is the best way for a tenant to share proof of income/bank statements that is secure? I have set up Tenant Cloud for applications etc but I don't see a way to have them upload this proof of income/bank statements. Any ideas on the best way to securely do this? 

Hello BP,

I am under contract at the moment for a duplex. I am getting this deal off market. We just got done with appraisal and supposed to close on Friday of this week, however the appraisal kind of surprised me.

I have spoken with various property managers and they have all told me that I should be able to get ~1400$/mo per side of this duplex, however when the appraisal came back, the estimated fair market rent is 1200$/mo per side. The current owner has had the same tenants in there for 6 years and never increased rent so they are below market rent. 

I am purchasing this from a real estate agent, she was initially asking $400,000 I ran my numbers to be able to make 10% cash on cash ROI and said that was my top dollar to achieve this was 370k.

Here is my breakdown for my initial. I will be managing this property myself so have 0% for the property manager rate. 

The duplex appraised at 380k so that is good, however with the rent being 1200$/side here is the breakdown:

Do appraisal values typically come in higher/lower than reality, or are they usually pretty spot on? 

With the appraised value/rent would it make sense for me to just walk from the deal and lose my earnest money & inspection/appraisal costs? Or is it better to go with the estimated rent from a property managers estimation?

Any suggestions/advice would be greatly appreciated.

 Thank you Steven, I appreciate your input. I will look into the tenant landlord laws just in case things go south. 

Hello BP,

I am currently under contract to purchase a duplex in Colorado and had a question regarding the tenants that currently are in place. I am going to get an owner occupied loan and wanted to know your opinion should this scenario play out.

Currently the tenants have been in place for 5 years and have been on month to month basis with the current owner. The current owner has also not increased their rent since their initial lease. Currently they are well below market rent and I would 1) need to kick at least one of them out so I can get my owner occupied loan, and 2) need to increase their rent to market rent since they are substantially below.

Worst case scenario the tenants do not vacate at which point I cannot get the owner occupied loan. Theoretically, if they refuse to vacate would this be considered trespassing when they are on the property at the end of their notice to vacate? Or would this just fall under needing to evict them at that point?

I am completely working in hypotheticals here, they may just leave without issue, but just trying to go through possible scenarios. 
 

Any input would be greatly appreciated. 

 Bradley, thank you for your feedback. After talking to my lender for a couple of different properties their estimated taxes were almost identical to Zillow which is usually ~0.6% of the assessed fair market value of the property. The insurance figure is simply an estimate, I have not gotten an actual quote yet but rough number.  

 Thank you Darius. From what I've researched my state/county has ~0.6% of the properties assessed fair market value in taxes. 

Thank you Brock. I am planning on managing it forever. Long term goals would be to create a property management company, but that's a few years and a few more deals down the road. 

Thank you @Forrest Faulconer I appreciate your input. I was running the numbers as though both sides were rented out even though I would be living in one since eventually I would be renting out both sides. Additionally, while I am living there I will likely be renting out 1 of the spare rooms so should be living for free. I did not want to account for that additional income since I tried to keep my calculations solely as though I was not living there and what I could get for it being 100% tenant occupied. 

Hello BP,

I found an off market deal and I wanted to see your opinion on my analysis and whether or not I should move forward with this deal for a house hack. The property is a duplex each side being 1160 sqft 3 bed 2 bath, 2 car garage and a yard. Both sides also include a washer and a dryer. I am running my numbers based off 1350$ per side. My realtor believes I can get 1400$-1500$ especially if I allow pets (which I intend to do). 

The seller was initially asking 400k, I offered 370k and they cover closing. They countered at 375k and they cover closing. Here is my analysis for the 2 different scenarios with a conservative rent of 1350$ and a more aggressive rent of 1500$. 

Any advice would be much appreciated!

Conservative Rent:

Aggressive Rent:

Hello all,

I am looking at making my first REI and finally found a property I am extremely interested in but wanted to make sure I am not missing anything. I found an off market deal for a 3 bed 2 bath duplex each unit having a 2 car garage and a decent sized yard. Each duplex is individually metered gas and electric, the water/sewer/gas is shared and the previous landlord has been paying that separately. I would be moving into one of the units for probably 2-3 years while saving for a down payment for another deal, for my calculations I am assuming both units are rented out. Am I missing any costs or not budgeting enough towards any of the costs. Additionally, if I were to allow pets (which I will) I could likely add another 50-100$/month, I did these calculations as conservative as I could.

Any advice would be greatly appreciated!