All Forum Posts by: Nathan W.

I would think that creates more risk for you, not less.  Your tenant knows who owns the house and who to come after if something happens.  I am not sure what benefit you hope to have by having your operating company just manage the rooms.

Not legal advice here, obviously.

It's so you don't do something stupid and then sell your mistake to someone else.  Makes perfect sense to me.  You are not going to be the only inhabitant of the house until the end of time.

For a while I ran the part of my basement that I rent out in my house just the same as with my other rental property, but eventually reversed course and just separated it out and filed it on my Schedule A instead and divorced it from my LLC. The tax advantages for Schedule A, as long as your income isn't over like $150k or some threshold, is good enough and you don't run into the capital gains issues and are able to truly separate your personal home from your business ventures, which is the point of having an LLC in the first place.

I've found this article on NOLO helpful in understanding tax issues for renting out rooms in your own house:

Tax Issues When Renting Out a Room in Your House

Nice job. Don't forget to allocate money for property management (even if you are self managing for now), maintenance, vacancy, cap ex, etc. Cash flow is NOT = Rent - PITI

Nice work man.  $31k for literal lipstick is the stuff dreams are made of! How did you find the bank owned duplex?

 Bingo.  We have placed our tenants exactly like this, and it works great.  

I also like Jennifer's pre-screening e-mail questionnaire.  I may start using something similar before giving them the open house details!  

very nice success story. Congrats. 

So does the bank effectively finance you 100% of the purchase price and just place a lien against your other property as collateral? I'm not sure I understood the details. Is the interest rate consistent with standard conventional loans of 80% or did you pay a premium to secure the 100% financing? 

Thanks for letting me pry! This is very interesting to me.

 No I don't, but instead of thinking of your residence as a cash machine, think of it as a way to build up your equity like the poster above me stated while reducing your debt burden by taking on a roommate.  He is right that many municipalities in NOVA prohibit an "ACTUAL" studio being built, but there are many nuances to that which will allow you to build out a nearly separate unit that still meets their ridiculous requirements.  

If you can get a mortgage on a $500k place and rent out your basement for $1200, you have just cut your mortgage in half.  That is a good price of admission to me.  Controlling a half a million dollar asset for half the cost (and basically less than what you would be paying for rent anyway).

Older thread, but going to revive it anyway with my advice. If you can swing it, get into a SFR with a basement and convert it to a studio. There is a LOT of potential for that in this area, with studio rents in some areas up to $1200/month. You will find that this quickly covers the renovation rehab and puts a nice little check into your pocket every month.

SFR's can be expensive, but look at one that needs a little TLC since you will be rehabbing it anyway. With FHA loans, you can put 3.5% down and hopefully you are ina better situation than renting.

 I could not agree more with this advice.