All Forum Posts by: Glenna Wood

If this property is truly a "must buy" for you then I would do an addendum to the contract and list each thing in detail that you are going to do. Do not expect the seller to pay anything. Set a timeframe. Once the seller signs then get to work. Be prepared to eat those fix up costs if it somehow all goes south. If the Seller won't sign the addendum, walk. The fact the Seller won't do these things to satisfy your Lender tells me aren't dealing with someone who is pretty irascible. Best wishes!

Does she have heirs? They might not be happy to hear you want to gain TITLE to the house for "doing renovations". And you would expect her to continue to pay T&I? Hope there is more to the story that's to her advantage. Don't mean to sound harsh but based on the few facts you've described, as a fellow senior I would advise her not to get an expensive reverse mortgage, and I'd want a whole bunch more detail on the "doing renovations" part. 

You can't claim a domicile in a property where you are collecting rent. If you need to use FHA for a loan, then owner occupy. Find a quad in the state you wish to domicile. One unit becomes your home collect rent on the other three. FHA financing is intended to put people in their own home not be a low down payment system for investors. Follow the rules. RV life sites have tips on managing mail and your domicile from a distance.

Depends on where you are. On OBX I added a pool and hot tub and doubled the gross rent. Also factor in your increased maintenance costs to get your break even. 

Would the basis going forward to the replacement property of the primary converted to rental be the basis as it was as a primary home or FMV at the point of being placed into device as a rental or the primary home basis + any long term improvements while a rental? On a heavily appreciated primary home, you'll lose a bunch of depreciation into the new much higher valued investment property. There's never a free lunch.

As a landlord you provide a roof to live under. As an STR owner you provide a vacation experience. Corporate rentals fall in between.

Contact Dave Foster or other QIs here on BP. For me I'm always biased to the KISS rule and would just do simple 1031's property by property. The key to success is know what you can buy before you sell by researching that new market thoroughly first. Don't waste your window scratching your head on what to buy. I never put the for sale sign up unless I've watched a market for at least 6 months and keep a possible replacement list updated. Then once you sell, make your offer(s) on the replacements right away. Also keep in mind is your main goal get out of CA or find new multifamily? If you're buying in a market with not many multifamily properties available, does it work for you exchange into SF(s) for a few years as an interim step? Best wishes!

The "too expensive" to build relies on so many variables. Certainly a plausible idea If you have a good market to build. I was going to suggest that but it would take qualifying for a construction loan and most important, finding a quality reliable GC. And it takes a city or county that is new construction friendly (easy permitting, low impact fees, reasonably priced building lots, etc). Don't have any idea how that fits for your area. In the markets I've been in for 40 years getting permits for a duplex was not possible.  

There are many simple easy to build duplex+ plans online. A simple 2 BD/2 bath would probably fit for you and many renters. It's harder and more expensive to 1031 into new construction but possible. One of the best investments I ever made early in my life was an owner occupied FHA financed quad. Each was 2br/1.5 baths. The loan was fully assumable when I was ready to sell and I held an owner financed 2nd for part of my equity so I earned interest on it too.

There a many more steps to building than buying existing property. If you're up for it, check it out. And again your city/state may have programs to help get more lower income, senior friendly housing built. The beauty to building is that you end up with new housing for yourself as you age and a rental that should need very little repair for quite a few years. It add almost nothing to the build cost to design and add age in place features. Best wishes!

What Michael Baum said. The advantage to hardiboard is that fiber cement board is more thermally stable. Natural wood will expand and contract under the paint which causes it to loosen and peel. You'll see peeling faster on the south and western exposures. HVAC systems don't last more than about 10 years in salt air. Beach properties just cost more to maintain. The old "don't buy a Cadillac and complain about the cost of hi test gas" holds true. Great that you are into the weeds on the details. So many get flashing eyes when they see the gross rent on a beach house and discount the pile of money under neath it. Best wishes!

If you can rent your side for $1000-1200 then you're losing income on the $850 tenants. Are the units the same? If the tenant side if smaller, move into it and rent the larger one. It may be hard to do since they are your long time neighbors but are you getting fair market rent? The extra monthly increase can go toward down payment savings. 

What choices do you have for getting to a single level age in place home? If there are multifamily properties available, what would it take to buy them? If they are individual units, is it better for you to live there and give up your 2 story duplex? Since you mention refinancing, you have a current mortgage or a cash out refi? Would selling your duplex and using the proceeds on a downsized single level get you a much smaller mortgage? That's improves your overall cash flow by paying less for your own housing. Are you working with a mortgage broker? They can give you advice on what's available based on your specific details. You don't know what you qualify for until a lender runs your numbers. You don't know if your income is too low until somebody says it is. Don't be afraid to ask.

Since you've been in your place 16 years, how's the roof, porches, HVAC and other major parts of the house? If there are major repairs ahead, selling might be better.

If you can find a good replacement, you can 1031 into a single level duplex, triplex or quad. The rental side would 1031 into the new rental portion and your personal side would be tax free under $250k net profit. A good QI like Dave Foster can walk you through that. Really depends on your market.

Whatever you do do not get a reverse mortgage to tap into current equity. These sound good in the sales pitch but end up being very expensive.

Does your city or state have any lower income housing programs that could help? Do you have a Dept of Aging or Sr services that could steer you to some free help? Best wishes to you!