All Forum Posts by: Account Closed

The home where I grew up is in Costa Rica. It was built in 1982. My father legally owns it, but only my mother and brother live in it. Dad has expressed his commitment to leave the house to me and my brother, meaning that we could decide to sell or rent it before he passes. There is a mortgage of about $40K on the house, which dad is paying, and the home's estimated value is around $250K.

Over there, constructions are different: Brick, concrete and rebar for walls. Corrugated metal for roofs. No A/C or furnace or basement. Maintenance has been almost non-existent for 23 years. There is a persistent problem with rising humidity in the walls, causing peeling paint and ease for mold to hold on to anything you hang on the walls. There have been termites and other wood-eating insects that have damaged the structure that holds the ceiling in place. We are not sure how unstable the roof is, but the ceiling definitely is. 

I have suggested possible solutions, including a device of european manufacture that reduces wall humidity, but it costs around $10K. With covid, having a contractor look at the ceiling has been difficult. The house could use many other upgrades to be in optimal condition (new garage door, new electric installation, paint, a modern kitchen remodel, etc.)

The house is big for just two people. Modern young families seem to prefer smaller, more efficient homes. Easier to clean, maintain and pay for. The argument for selling is that mom would have a better quality of life elsewhere, and we forget about a headache-inducing asset and put our half of the money we can get for it to work elsewhere. My fear is that because of the poor condition, we may get low-balled. 

My brother is not excited about spending any amount on repairs and wants to sell, as he frustratingly thinks the house is "a lost cause" in terms of repairability. It is unclear if there is a market right now for a big house with many maintenance issues. On the other hand, in a world where money was not a problem, bringing the house up to optimal conditions would cost around $50K, and I believe it could rent for at least $1600. 

I could use some fresh perspective and advice from you. Thank you!

I'm looking into buying as owner-occupied, and there is this metal frame house with an attached, insulated shop, like what a mechanic would use. It is big but has no internal walls. It's just a big shop space attached but separate to the main house. All I see is potential for an Airbnb, essentially adding the interior rooms, walls, etc. and call it a cottage or something. The house also has an unfinished attic which supposedly could be used as living space too, but the main potential is in the shop.

If I could get the remodel costs into the FHA loan (I forget the name of the loan that allows this), is this something you would do?

Hi BP!

My spouse got a new job as a college professor and we had to move to a new state. We left behind a SFH that we are renting out to great tenants, which makes us about $160/month after all expenses. There is little equity built there at this point.

We want to try the duplex house hack at the new college town we arrived in, but there is some housing over-supply around the college. It is important for my spouse to live close to campus, but there is a "more desirable" area/school district about 15 minutes away (mostly SFHs, not duplexes). I've seen a few modest duplexes in/near campus with an empty unit, in the $250K to $335K range with 3 to 4 bedrooms each side. Each bedroom rents out for $425 to $500. 

We'd be using FHA if we buy. Does this sound like a dead end? If we live there for the required time under FHA and fully rent out the duplex when we move out, it may cash flow enough to make it worth it, but this over supply is killing my enthusiasm. Any thoughts?

 Thanks for your polite response and advice.

I found out through a local realtor that there's a surplus of condos on campus, so they're looking like a bad investment right now. I will explore SFRs nearby in high quality school districts. 

Perhaps selling is not my priority now because I am betting that the SFR will at least pay for itself as a rental and appreciate over time. My question is more along the lines of the bigger picture: is the strategy outlined a decent one? Do I have hopes of qualifying for a 2nd mortgage with only 10% equity in my current home and no tenant history to show, but just the intention to rent it out? If I do, is buying a college town condo a good option for future cash flow?

 A rough estimate from broker who knows what we paid and what the renovations were.

My wife and I bought a SFR to live in, in Aug '17 and finished the basement for ~$18K. We will move out in Aug '18 due to a job offer, and we'll have built 10% in equity, including downpayment, at that point. I plan to rent it out hoping for future apreciation and perhaps a couple hundred dollars of cash flow before vacancies, maintenance, etc. It seems we would just break even if we were to sell at this point. And a cash-out refi was not encouraged by realtor because interest has gone up since I bought.

We'll move to an upper-income college town, and the new job will bring in significantly more per year. 

If we qualify, I would like to buy a 2- or 3-bed condo -or duplex, but they're rare in the new area- so we can live in it while we save for another downpayment, then move out, and rent the condo to students (having college kids as roomates is not an option). What mistakes am I making here? Is this plan naïve?

Thanks everyone for the input.

I get the point, and am surprised that you all agree the average tenant won't appreciate having a place without dangerous levels of radon, or water without nasty chemicals. I think Forbes had an article supporting my thesis, but it seems I'm still naïve.

@Teri S: Yes, we created two egress windows. Thanks for the tip.

I bought a single family home in Greeley in 2017. Two possible scenarios: renting out the basement only, or renting out the entire home in the next few months. Will probably sell in a few years.

Besides finishing the basement, we've made the house "healthier/safer" by sealing the crawl space, installing a radon extraction system, escape windows in the basement, and a SimpliSafe alarm. I am flirting with the idea of buying a whole-house water filter to reduce chlorine and other chemicals.  It lasts for about 4 years or 400,000 gallons and greatly improves water quality. My realtor says she hasn't seen that as a good value-maker. Is it not reasonable that these improvements attract quality tenants and that health-conscious tenants/buyers would consider this a plus and be willing to pay a little extra?  Thoughts?

I bought a single family home in Northern Colorado in August '17.  Two possible scenarios: renting out the basement, or renting out the entire home in the next few months.  Will probably sell in a few years.

Besides finishing the basement, we've made the house "healthier/safer" by sealing the crawl space, installing a radon extraction system, and installing a SimpliSafe alarm.  I am flirting with the idea of installing a whole-house water filter to reduce chlorine and other chemicals.  These last for about 4 years or 400,000 gallons.  My realtor says she hasn't seen that as a good value-maker.  Thoughts?