All Forum Posts by: Marc Winter

Look at the demographics of your specific location to see if the rent is within 30--40% of income level.  Then check to see if it is cheaper to rent than to buy/own.  If yes to both, then proceed cautiously.  Do not overleverage on financing.

Making tenants 100% responsible as @Nathan Gesner posts is spot on.  

However, you are looking at separate electric and water metering, maybe gas too? Who will be reading/servicing those meters?  Check with each utility to confirm you can have the additional accounts in a tenant's name.

In our North East Pennsylvania location, the water companies will allow a separate meter, HOWEVER, they require a separate water main from the street hookup to the additional house meter so they may control each meter on the property independently of the other(s) without entering the dwelling. That can get pricey.   

Other than that, with only one meter, the owner will have to pay for both houses and build that into the rent.  I would never pay for any tenant's utilities:  what is free is too often wasted.  How do I know?  I remember a tenant who decided it was easier to open a window than lower the thermostat in winter.  Ouch.  Or would not bother to report a leaky toilet flapper. Ouch ouch.  

Good luck, and keep moving forward.

Kings County Housing Court is a dark and expensive place where the tenants/occupants/even squatters have more 'rights' than landlords/owners!  An experienced occupant can string the owner and system along for up to a year or longer.  

Don't do 'self-help' eviction--recently an owner was arrested for changing the locks on their property that was illegally occupied by a squatter!

All that being said, get an experienced attorney and have them file for possession ASAP, and then they can try the carrot/stick approach with this holdover:  cash for keys OR we'll proceed with the pending eviction. 

Just for fun, review the condo docs to determine if subletting is permitted. 

All the previous comments are on target.  Question: Would this property be located in a C (or lower) neighborhood?  

Moving forward--have full photo documentation of the damages and estimates to repair, and have the manager tell the tenants if they cannot pay in full or with weekly payments, (scheduled to be paid off in full BEFORE the last month of the lease) the management company will move forward with legal action.  

Some might think this is a bit harsh, but if they did this stupid damage and can't (won't) pay for it, who wants them as tenants?  Don't kid yourself that they are keeping the rest of the house in pristine condition and no more damage will occur before lease expiration.

Going forward, discuss with your property managers concerning their screening and follow-up practices.  

My advice--In this, and immediate future market, don't play 'skip'.  Depending on your current age and investment goals, you have several options:

1.  Sell and hold cash.  Pros--you'll be ready to buy any bottom of the market.  Cons--TAXES on cap gains and recapture of depreciation.

2. Refi or HELOC for available cash. Pros--have cash ready. Cons--can't always count on a HELOC to be there when you need it. A new mortgage will always have to be paid.

3.  1031.  Pros--no real tax consequence if done properly.  Cons--can't touch any cash, and time constraints on declaring and closing on the replacement property.

4.  Sit Tight.  Pros--hold it long enough and any dip in price or recession declines will eventually correct themselves.  Cons--Short to mid-term future uncertain, and difficult if not impossible to change your mind about selling during a major downturn.

5.  Meditate and pray on it.  Pros--don't have to listen to other opinions that tend to confuse--Let the universe guide you.  Cons--well, um, none.

Good luck!

2 steps to resolve:  #1 contract with a reputable pest exterminator and do the entire building (all 4 units) regularly;  #2  evict the late-paying tenant.

Way to go on your first project!  I'd agree with @Robin Simon--rinse and repeat with the BRRRRR method.

And, keep in mind the following:    The VA loan program is designed to help veterans secure housing for themselves and their families, so the property being financed must be intended for the borrower's own occupancy as a primary residence. Therefore, using a VA loan for an investment property, rental property, or vacation home is not permitted.

a c/o is a CERTIFICATE OF OCCUPANCY, issued by your local building department.

It's good that the basement is empty, otherwise as you probably already know, the tenant you are evicting could tell the court and you would have much more work to do!  

To legalize basement apartments you'd need help from a knowledgeable architect or other professional to shepherd you through this process.  If you can even get permission from the City, it won't be cheap!  IMHO, not worth it!

If you live in the attic, without a c/o, you are putting yourself in jeopardy again.  Anyone (tenant, nosey neighbor) could report an unauthorized apartment to the City which would give you a violation, and many more headaches.  Also, if there were an insurance claim and they inspected it, your insurance company might disallow your claim. 

Again, in my opinion, just not worth it.  

I agree mostly with Marcus Auerbach, however, I would recommend hard money FIRST.  Then pay off the taxes and other liens to give yourself a moment to breathe and consider what you can do.  

Second, you might sell it to an investor 'as-is, where-is'.  Make sure it is a real investor, not a wholesaler.  

Lastly, speak to a real estate attorney who has experience in this type of situation--it's more common than one would think.