All Forum Posts by: Syed Kamal

I am in Canada and have used credit unions for years. Best part is having a mortgage with them you get patronage dividend back at the end of year. You are part owner. I recommend them. 

What regulations would apply to such as operation in Houston, TX. Its not your typical rooming house, every room has mini-fridge, LED-smart TV, utilities are included and all the safety and security measure one can imagine. Rented mostly to professionals or semi-professionals who have not yet made more long term housing arrangements. Its not a B&B either, they usually have shorter stays and food service. We have all the facilities but no food service. The tenants are fully screened, do not have any disabilities (physical or otherwise) or infirmities requiring special care or supervision. It is not a halfway house either because typically they not any criminal history. Its not senior home either they are all under 65. There are many homes like this all over the city providing yet another option for the public. 

How should such an operation be registered and or licensed under the city of Houston bylaws. The current city bylaws seem to have no slot for this segment of housing market. Any guidance shall be greatly appreciated.

Operate fully furnished residences with rooms rented on monthly basis to Individuals just moved to city and who have not yet made longer term housing arrangements.

To me answer is an obvious NO. But don't forget to look for a 203K lender. Lenders who can roll in the cost of rehab into the mortgage. Why sink your money into rehab if you can borrow, of course restrictions apply. Just do a google search for lenders in your area. 

Don't know your investment objectives or goals. But here is what I would do. Buy the largest multi-family building you can. i.e. with greatest number of units. Up to a fourplex can be considered primary residence. Live in one of the units rent the others. If you wanna further maximize the cash flow. In the rental unit rent by the room (furnished with no lease, call them guests. Most cities allow up to 3-4 unrelated people living in the unit without being considered a rooming house. By all means make it a true guest house with all the amenities, safety and security. Make sure there is sufficient on-off property parking is available for all. You will be surprised how much revenue you can generate.

I am glad to report that I like to rent rooms and it has worked well for me. Although most places put the cap at renting to no more than 4 people. But mine is not a typical rooming house it is more like a guest house. Every room is fully furnished with matching furniture, including the living, dining, and kitchen. the home is equipped with everything right down to smart tv, forks and spoons, small appliances, iron and ironing board. Every room has a mini fridge, lockable door, smoke detector, peep hole. First aid kit, fire extinguisher. Fortunately in our area parking is not an issue and I cultivate good relations with all of my neighbors. 

I think rooming/guest houses fill an important need. Tell me where is a guy just coming in from out of town going to find a reasonable priced furnished room with no lease to sign. With couple of exceptions I have not had a bad guest. Recently we got our first female guest. We do not allow smoking, minors, couples or over night guests. I live in the house. I would really like to replicate this success in another city I love in Texas.  I charge $475 pm plus $75 each for all the utilities (power, gas, water, cable TV, internet). I would think this arrangement only works in large or college towns. Make no mistake this arrangement is quite a bit of work for the owner. I am retired I don't mind. 

You could but you would pay 5-10% of gross monthly revenue. What would have the company do you that you can't do yourself. Unless you are planning to move away and rent out both units. 

They will charge for each service separately such leasing, emergency repairs, their fee only covers rent collection. Tell your renters to pay by E-transfer, that is what all of my 6 guests do. 

In the mortgage company scenario you are working with a professional who makes his living placing funds into real estate mortgages. They are paid commission by the funder and usually don't charge you anything. They answer questions you may have regarding financing of your deal. Mortgage brokers may or may not have access to their own funds. They are certainly well connected in the market place and know policies and guidelines of multiple lenders for mortgage funding. They can review your credit report and help you clean it up. They prepare your document/ application package for presentation to funders. They save time and money to the consumer. Personally I prefer finding financing thru them rather than go to individual lenders. I would have no hesitation about using them. 

I would like to acquire a property in a Texas city, I know well. I am buying to hold and have experience in creating substantial positive cash flow. I can come up with 20-30% of the purchase price but I do not have the income to qualify for a mortgage. This has become the stumbling block for my plans. Any ideas on how I can make an offer with guaranteed financing available. Any guidance from any source appreciated.

The napkin based financial analysis presented at this site is great. I am trying to understand and use it. I have just one question:

In calculation of net income why do you exclude principle and interest payments. Shouldn't at least the interest paid on mortgage be included in the expenses of the property. Otherwise doesn't estimated net income become overstated.