All Forum Posts by: Mazyar A.

Thank you Joe. I will do so if I cannot find a common ground with the contractor.

It is on my personal name, but I have specified the type of property as a rental property, not a primary house. Is it considered still personal?

Thank you.

Jason,

Thank you for your reply. In my contract with the foundation repair company, they are not reliable for issues that rise for sewer lines, but the contract does not say so for clean water line. I will discuss it further with the contractor to try to see if his insurance will cover.

If I call my own insurance and discuss this, but not formally file a claim, would they still take and note that conversation as a claim? I know that some auto insurance company do that.

Thanks.

Hi

I bought a fixer upper duplex a few weeks ago to keep it as a rental property. I have started slab foundation repair, which has resulted damages to sewer and fresh water pipelines.

Sewer line is visibly cracked somewhere, but leaks could possibly exist in other spots in the slab.

Fresh water line is visibly gushing under slab, definitely as a result of lifting the house.

I also have “Water Back Up and Sump Discharge or Overflow” coverage, but not sure that is relevant.

Do you think the dwelling coverage of my home insurance will cover it?

I know that they will have their own interpretation of the situation, but should I push the insurance to consider the slab being damaged by sewer water over years (I’ve had it only for a few weeks), or should I ask them to cover me because the foundation repair has caused the sewer line damage, as well as fresh water line damage.

Thank you.

I think putting terms for overage makes sense in general, but when you bring up the "designated amount", doesn't it tempt the tenants to ask you later "This past month I should have used less than $50, so why should I pay more than what I used?" Basically, to them this means they are required to pay a minimum amount of $50 per month, even if they used less. So I guess this may open the door to conversation and argument between the tenants and LL. But I am glad that your experience was otherwise. Perhaps just asking a fixed rental amount, with includes utilities, would prevent arguments but I still like to add the overage term.

Corbin, I talked to my title company here in Austin TX and they said too that it would need to be a Warranty Deed, as Gene said. They charge $120 for that. 

Hello

Please give me advice on my very first investment property.

Property location: Austin, TX

Neighborhood of the property: Has the fastest average growth in appreciation in metro Austin (2019: 12%, 2017: 24%)

Purchase price: $215K

Type: Attached Duplex (700 SF Front + 1000 SF back)

Lot: 7020 SF

Condition: Fixer-upper

Estimated total rent: at least $2K/m

Down: 27%

Loan 73%: short term (0% APR up to a year) from a very nice wealthy friend. He is in real estate business himself but lives in Seattle. He does not ask for any return on his loan. My goal is to refi it within the first 12 months.

4 bedrooms now (planning to split a larger one to two, so will be 5 bedrooms)

2.5 bathrooms

No garage or carport

Foundation repair: $5200 quoted

Remodeling: Two kitchens, 5 bedrooms, 1.5 bathrooms, changing some molded sheet rocks, floors, adding new mini-splits to the larger unit ($3K)

Total estimated remodeling costs: $25-35K

The remodeling is for the basic but necessary things, and is not intended to make the property elegant, because I am thinking about remodeling and renting it out for about 5 years, then tearing it down and building a 2 detached units (can build out up to a total of 2800 SF with the current city regulations). Since I am going to remodel and rent it out first and tear it down later on and probably sell it (not sure if the rents will be good enough for the invested money in the new buildings), I need to be wise now on how much I pour money for remodeling. When I bring contractors for estimates these days, all of them ask why don’t you tear it down now and build new?

My answers are: 1) lack of sufficient fund to build now, 2) this is my first investment in R.E. so I don’t want to move too fast, 3) due to COVID-19, sales market may not be as good as rental for awhile, 4) I want the property, or at least its lot appreciate more over the next 5 years.

Here is the estimated rent (not cash flow) with a vacancy of 10%.

My questions:

What do you think about the overall plan.?

If I want to sell the property at some point, when is the best time to sell, to minimize the capital gain taxes? Ignore the other factors such as economy or appreciation.

Thank you so much