All Forum Posts by: Que Tran

Since covid, it seems that no one wants to share room any more.  I think you'll have a difficult time pairing up students to sleep together in the same space, unless they are boyfriend/girlfriend. Also check with city ordinance to qualify the number of people allowed in a house. In PA, state law is 2 people per bedroom.  However, Scranton city only allows up to a maximum of 4 unrelated people to live together. Even if you have an 8 bedroom house, you're only able to rent to 4 people max. Unless some of the occupance are related. 

One other thing to factor in is that students (the good ones) usually book a year in advance. You may get the 2nd string, or the last minute accepted students, who need quick housing, to start school this August. 

Definitly check with the state laws. In PA - it is only legal if you meet some of the rules (Act 52):

1 - You have to be a licensed agent (realtor)

2 - You have to identify your intentions (that you plan on selling the contract for profit)

3 - Seller A has 30 days to cancel without cause or penalty (and still get back their EMD)

4 - All monies must run through a brokerage (and then agent splits)

5 - Must allow all parties to consult with an attorney, appraiser, another realtor

Engaging in wholesaling without the required license can result in civil penalties, including fines up to $1,000 per violation, as enforced by the Pennsylvania Real Estate Commission.

I just heard about this from another NY investor.  That's so crazy. I'm very interested in what other investors are doing - to comply with state law. PA is much more loose.

If you're not used to having people around, or enjoy your peace and quiet, house hacking may not be your answer. You can't screen based on cleanliness, matched personalities, or crazy. They will be in your personal space all the time. It would only work, if you have seveal floors to find some isolation. If you have the opportunity to find a multi-family building, it's better to do that. Cash flow will be better, and appreciation will be faster. Just make sure your realtor knows what to look for like: seperate utilities, low taxes, seperate back yards, in a good school district, and in a quiet neighborhood (not on a main street).

 It matters if it is important to you. Certainly, homes in the 2nd & 3rd best school districts, will still rent. If you're starting out, price point will be a big factor. Some of my bigger monthly cash flow are units in the C & D class buildings. Slowly I've upgraged over the years, and I primarily invest in B class. It makes more money monthly, and there is room to force appreciate. Good luck.

A leaky toilet will drain your profit. I would check every toilet to see if it needs a new flapper, or swap out a new toilet all together. The best ones are from Home Depot, the Champion, that will flush a basket of golf balls. You'll save yourself some labor later, with clogged toilet requests. I think it 1.28 gal per flush. There is also a blue dye that will show you if there is a minor leak in the tank. This could happen if the tank is not plumb to the floor. Tub leaks are usually the 2nd culprit. It could be as easy as changing out the stem valves. Make sure the sink faucets have an aerator on them. It's suppose to slow down the pressure. Lastly, it may be the washer, if free to tenants to use. Maybe install a coin operated machine to slow down the use. Good luck.

 We currently do manage several units to section 8 in Scranton and Wilkes-Barre.  It's not ideal, because they do have a budget price to adhere to. While the guarantee of income sounds great, it's only a percentage of the rent, typically up to 70% and the tenant has to pay the remainder. You can't accept anything over the allowed budgeted price. The only way they will pay 100% is if the tenant does not work.  Renewal has been a nightmare.  There is a long laundry list of required repairs to be done in a short amount of time. If tenants say they want new flooring, then we have to put in new flooring, even if damage was tenant caused. I'm not saying the list is ridiculous,  because all safety concerns should be addressed. It's the tenant damage that upsets me. 

@Gustavo Delgado

We did 2 purchases at the same time. It was supposed to be easier then a conventional loan, but they asked for a lot of paperwork. 2 to 3 points up front. Rate was 10.5 and 11. Depends on rent amounts, or if vacant, the appraiser's rental value, which is always low. I did not like the process, and will be doing a hard money lender next time. Fees are about the same. But hard money is only short term, interest only. I hear some are presenting a 20 year option so you won't need to hurry up and refinance out.

@Caleb Brown. Same thing happened here. We are a full service brokerage with PM as the backbone. Just got presented with 80 doors, and working on a valuation that is fair, and keeps the PM vested, so none of her clients leave after a few months. Currently at 225 units, but adding that much on at once, may be brutal. Good luck.

@Mary E. Taylor - I don't remember exactly. The reserve price was never posted. It just read: reserve not met... until it did, then it will just say: reserve met.