All Forum Posts by: Mike B.

I’ve never dealt with this situation but I agree to step it up and involve a lawyer immediately Hopefully can recoup your money faster and move on

Aaron Jenkins you’ll need a contractor to help you draft drawings and submit to L@I for review if you’re adding a 3rd bedroom (addition to rear of property). I forgot the exact number but your backyard I believe must have 10% of total lot as free outdoor space (unbuilt that means). Would speak with a licensed contractor

If only HE (boyfriend) was on the lease and GF was not, I would believe that the landlord can call police for trespassing at this point. Unsure what NYC squatter rights are though, which could play a factor. I think the boyfriend should contact an attorney to evaluate the issue.  If anything, the attorney can determine who is responsible and if it's the landlord (to deal with the issue I mean) then a legally drafted letter sent to the old landlord should help your friend be free of the issue

@Madeline Jary - a lot of answers to your questions are in the forums and blog posts so I highly recommend searching those and listening to BP podcasts. 

To summarize a response to your questions

(1) Would only pay off student debt if interest rates are >7.5%... else would save money for investment purposes

(2) First investment.. duplex or triplex would get you the most income (paying most if not all of your PITI payments). I did a duplex as my first investment property

(3) Down payment for owner-occupied SFHs can be as little as 3.5%. On multifamilies it varies by state/lender. I'm in Philly and on a duplex/triplex and owner occupied building.. you can put down 5%, conventional mortgage, 30 year term, as long as the rentals pay a good amount of your PITI, you're fine

(4) YES.. usually (but not always) buying a property that needs some rehab work will net you more money in the long run because of your forced appreciation in fixing the place up (read: sweat equity).  I will say that buying a turnkey place in an "up and coming area" (if it's really up and coming) may make you the same or more money in a few years.  

Joe I would get an opinion from several insurance companies to see what's recommended. I don't have a large 10-unit like you, but I've owned a duplex and a few SFH rentals (even currently). I carry mid-tier insurance coverage on the rentals and also I have a large umbrella policy just in case. A good (and more importantly HONEST) insurance agent should be able to guide you in the right direction.

Speak with several agents.. see who makes the most sense and is looking out for your best interests.

He should read the lease.  If the lease includes a "Joint and several liability" clause in it, the landlord can go after him just for the Ex-GF staying a month without paying rent.  

DEFINITION:  Under joint and several liabilityor all sums, a claimant may pursue an obligation against any one party as if they were jointly liable and it becomes the responsibility of the defendants to sort out their respective proportions of liability and payment.

Meaning the landlord can go after both people or just one person.. but either way each person is responsible for the other's actions.  I have this in my lease clause for the very reason you describe.. if a boyfriend/girlfriend break up.. I don't want to be 'high and dry' with their issues and non-payment. 

@Amanda Sartor - if you only have a few properties... get your hands (and sometimes feet) dirty.. do your own PM.  Save on fees and much better (closer) follow up on your properties to ensure they stay in good shape (and you have great tenants to start with).  I think PM are helpful if you're (A) live out of state or very far away or (B) have >10 properties and cannot manage them all on your own

Just my $0.02 -- I've been the acting PM for my properties for several years now and have saved a lot of money (and likely aggravation) dealing with this. I've also noticed some tenants pay my higher rent (they state this) because they directly deal with me for issues vs. a PM. 

if he said someone drove into it (and it was fine before) I would have the tenant pay for it. Normal wear/tear is different then their accidental fault of driving into it. 

@Mike Zimmerman - YES.. buy a duplex, or if you can a 3-4 unit property.  As @Account Closed noted, less stringent purchasing requirements. My first home was a duplex with a garage in Philly and hands down that was the best thing I did several years ago. It needed full renovation, had a garage, tons of potential in a booming area. Got it for a great deal, did a huge reno and lived there 3 years before selling and flipping up to a larger SFH for my family. We were tight on space with a dog and newborn, thus the move. If we had more space, we may have lived in the duplex longer.

From my research and personal experience: 

Living in an owner occupied DUPLEX usually pays 1/3-2/3 of your PITI (mine was 2/3 paid!). If you're in a triplex.. you're likely living rent free at that point and perhaps making some positive cash flow each month. With a quad, you definitely should have your full PITI covered and making extra $$ each month.

Financing.. my duplex.. we did FHA, 3.5% down, renovated 75% of the property only (all interior work was done). Rented out the 1st floor (1bed/1bath rental unit) and after ~12 months of living there.. did a cash-out refi. That put us into a conventional loan, NO PMI, and an extra $20K back to us at closing so we could finish exterior renovations. We then sold 2 years after that (thus living there 3 years total).

Let me know if you have any questions about it!  My only (minor) regret is NOT buying a triplex or quad at the time but it was 'slim pickins' in the market 

The above info is correct. And that’s why I only do high end rentals. Headache free 99% of the time. I’d rather pay a little more to have less headaches (and I still earn 10% or more on all properties)