All Forum Posts by: Lynnette E.

I bought a house in CA that had the garage converted to a bedroom without permits.

It was a HUD home when I bought it and I did not know it was not permitted.

A few years later when I wanted to do a room addition I had to have that garage conversion inspected like I was doing it--on a permit that I had to pay for and to do any upgrades/changes the inspector asked for as a part of doing the new addition.

Everything was ok and within the acceptable requirements.  The inspector was very strict.  He measured the distance between each electrical outlet, measured the size of the 2 windows so they were in the range to provide adequate light and escape, but not too large to be energy wasting, etc.  Everything passed.  

So in the end it was the cost of the permit fees, the 'I got caught" penalty and the school tax based on square footage I had to pay.

If you are really interested in the house, ask the building inspector to come and see it during the inspection period.

You will be glad when you go to sell.

Running into the newest 'hot' real estate market that already has been 'discovered' and the prices have been driven up to a point that its not longer a deal.  Often these prices get driven up to the point that only investors wanting a stake into the hot market can afford the houses.  

The locals have long been priced out of the area.  Their salary only supports a certain rent level, and it won't go up as fast as investors want.  When you want to sell, and everyone knows it is not a hot area anymore, you will take a big loss to sell it to a local.

If you accept the rent for January, they will likely feel entitled to stay through the end of January, causing more damage.  Do you want that?  

Give the letter with the cost of repairs to date immediately, with the notice.  Then explain that if they leave without you evicting them it will be easier for them to rent a new place.  And that any additional damages will be billed once they leave and you will collect through the court system off everyone--so it will be in each of their records--if needed.  Then collect for not fulfilling the lease, not giving the 30 day notice, whatever you are allowed AFTER they are gone.

You might want to check if the SS money is disability and ask how long they have had the disability and how long it is expected to continue and when was the last time SS reviewed their qualifications.  If it is disability based on a disability that will end  (e.g. not ruled permanent) their income could end completely, yet they may have not job or income in the planning.

Also ask about visiting grandkids, long term grandkids they have custody of.  Even though they are retired, they may have custody of a slew of kids.  

It could also be siblings that were married and hence different names, or different fathers.  Maybe ask if they have references for their past residence and see if they are all the same addresses in the past.

And have a clear plan if one moves out what they outcome is....other 2 who do not qualify based on income, do you let them stay?  Or they have an adult child just out of prison for cooking meth, but with a job promised with adequate income, do you take him?  That needs to be discussed just in case its a bait and switch scam.

So, what do they tell you about the tenant?  Do you know how they qualify tenants?  Are they section 8?

Likely the purchase is not the house, but the lot.  You need to see what a lot is worth and how much it will cost to demo the house,

And make sure the lot has road access and it is not landlocked, polluted, have abandoned wells that need to be closed or failing septic systems you need to close.

This could be a money pit.

And see if lots sell in that area.   You may have a long holding time

On the first day of Christmas my Tenant told to me .

I have no rent and wont pay a late fee

On the second day of Christmas my tenant told to me

Hello! We just bought a house and will be closing on Wednesday! We'll be moving out Thursday!

On the third day of Christmas my tenant told to me

We're withholding rent because our Christmas tree was not provided

On the fourth day of Christmas my tenant told to me

it’s not mine - it’s my sister’s dog I’m holding for 3 years now.

On the fifth day of Christmas my tenant told to me

Our toilets are overflowing, yes five overflowing toilets

On the sixth day of Christmas my tenant told to me

"Hey, umm, there are guys with machine guns and DEA jackets kicking in the door of the downstairs neighbors...and I think a helicopter is trying to land in the street....oh and my boss is out of town so I am going to be late on rent this month"...in a voicemail...wish I was joking...falalalalala

On the seventh day of Christmas my tenant gave to me

An emotional support animal letter for a mini horse

On the eighth day of Christmas my tenant told to me

Please get an electrician in my unit by Christmas day

On the ninth day of Christmas my tenant told to me

The turkey fryer caught the house on fire

House hack, but not in the inland empire.  The commute will suck!

Instead buy a single family residence with large bedrooms.  Live in one of the bedrooms and rent out the other bedrooms--elderly, college grad students, military folks, visiting nurses or doctors all do well as roommates.

I had a friend who did this and got $500 to $750 a month for each of the bedrooms he rented out, plus they split utilities.  This was in a suburb of LA.  Towards the end of doing this he rented entirely to nurses and military.  He had several houses going and made bank!  He converted all his mothers single family rentals to by the room rentals.  He managed her things as she had dementia.  Only stopped as his mother, who owned the homes, passed and the other heirs wanted to liquidate the estate.  He did make much more renting by the room than by the house.

I'll also tell you what he learned in the process.  

1.  Assign each person a separate cupboard for their non-share food and cookware and  shelf of the refrigerator.

2.  Get cheap living room furniture and kitchen table and chairs. Get a great TV.  Let them furnish the bedroom themselves.

3.  Get basic cooking things--toaster, bender, set of dishes, pots and pan, mixing bowls, mixer, serving spoons, spatulas, flatware, etc.

4.  Have the residents put a set amount into a common use pool, like $25  a month for TP, dish and hand soap, etc.

5.  Hire a cleaner to clean the house, they split the cost like its a utility or lawn service.  Let the residents add on to have their individual room cleaned by the cleaner for $20 more each week.  They call and pay directly, but you are in charge of the cleaner for the common areas-LR, kitchen, RR, and you pay for that, but collect the $ from the renters with the utility split.  One housecleaner keeps the house in peace:)  And the house cleaner is a spy for you.

6.  Get excellent TV and internet service.  They pay this bill and will need  a lot of capacity as they will likely spend time in their rooms downloading stuff.

7.  Avoid anyone with sex charges or with anything violent in their criminal records....no matter how long ago they assaulted someone or with drug charges.  These folks do not make good roommates.  And either make the house a smoking house or do not rent to anyone who smokes.  It keeps the peace.

8.  Pets, really consider, if its a pet lovers house, you will get a half a dozen of them in the house with one or 2 pets per room.  And they all want to be the alpha dog.  What is your limit with pets?  Dog on the couch and no dog on the couch roommates will not get along.  My friend decided to only allow the military dogs, well trained and stayed on the floor.  But he put all the military guys in the same house.

Thanks so much for the research and information.  Its very helpful!

Lynnette

Have 2 or 3 certified techs come out and look at the project.  They will each have a plan, and probably different plans.  Ask questions.  Then you will know exactly what they would do to correct the problem.  

Then you will be able to make a decision about whether you can do that and also the cost difference of your time and material vs. theirs.  And if its slow at work, but you still have work, maybe do this on the weekend if you decide to do it yourself.  

As far as disclosure, yes you do need to when you sell. But if you are handling this as a flip, just putting it in a list...Upgrades to the house since its purchase on August 2018:  paint living room, paint master bathroom, new kitchen counter, terracing yard with retaining walls, planting XX bushes and plants, adding drains to basement and yard, replacing living room lights, …

The idea is to honestly market the house, identify the work, but do not focus on it.  And calling it an upgrade is viewed as more positive than just saying we did this.