All Forum Posts by: Ryan Murphy

@Account Closed

Thanks for the replies.

I will, at some point, definitely remove this tree.  The zoning on this property allows for 6 townhomes to be built.  Right now, the tree thickness is small enough that it doesn't require any permitting.  It can grow thicker to where it will need a permit and cause other headaches, but we can monitor that and get rid of it before that happens, and that shouldn't be a problem for 2-5 years, maybe more.

I prefer to get rid of it now so it's just one less thing to think about later.  But I am also interested in pursuing the neighbor's property.  The roots of this tree creep into their property, as the tree is literally at the very edge of our property.  The point is, I have the right to remove the tree when we want to develop, but they would not have the right to remove it if/when they wanted to develop or sell to another developer.  They couldn't just cut the roots at their property line because that would kill our tree, and we could complain, causing them problems, etc.

The thought occurred to me that if I leave the tree there, maybe it makes their property less desirable for another developer, and therefore worth less, so that would be an advantage to me when I'm ready to pursue their property?

We currently own the property individually, so rent covers the mortgage, and we can hang onto it for as long as we want before we decide to build.  Seattle is going through growing pains, and this area hasn't been developed as much yet, so our plan is to wait 2-5 years before doing anything.  This gives me time to work on pursuing the neighbor's property - maybe they won't sell anyway, but I just want to make sure I don't give away any major potential advantages.

So the bottom line question is: would the tree have much of an impact on the desirability of the neighbor's property (specifically for developers), giving me any advantage to keep it there for now?  Or is this too small of an issue to cause any impact on a developer's decision to buy their property or lower the price any because of the tree issue?

Recently purchased a property with build potential.  There's a tree that can be removed without requiring a permit, and it probably has 2+ years before it grows large enough that we would need a permit.  The tree is at the edge of our property, abutting a neighbor's property that is also zoned for more build potential.

We are interested in looking at that next door property some day and maybe negotiating to buy it from our neighbors.  Then we would have a larger foot print and be able to build much more at a better cost.

Here's my question, for any developers that may have experience with buying buildable lots with tree issues:

Would we be shooting ourselves in the foot by removing the tree prior to trying to negotiate to purchase the next door property?  Would their property value increase because we got rid of our tree that could impede a developer's ability to build on their property?  Or is that not really a consideration for developers?

@Chris Sukala No problem, good luck working with it in the future.

I know this is an old post, but I've done extensive research in this area, and there's a specific supreme court case of oxford house v city of edmonds that ruled against the arbitrary occupancy limit that the City of Edmonds had in its ordinance (max of 5 unrelated persons).  It's VERY clear.  Just google it.

Without a doubt, occupancy limits DO NOT APPLY to sober living homes.  That being said, minimum space limits DO apply.  There should be a city ordinance designating a minimum SF per bedroom and per additional person in the bedroom.  That would be the only occupancy limitation for residences for any group protected under the ADA, other than special needs categories (wheel chair access, etc.).

The whole point of this is to protect the disabled (in this case prior addicts / alcoholics) from being pushed out of a community through unfair ordinances, simply because the community doesn't want them there.  Pretty much exactly what you're going through.

@Joe Norman, @Alec Anderson

I just re-read the Fannie Mae fact sheet for the Homestyle Renovation loan, found here:

https://www.fanniemae.com/content/fact_sheet/homes...

Apparently, I mispoke ... you CAN do your own renovation (see page 3, first section), with the following conditions:

1 - The lender agrees to it

2 - The renovation amount doesn't exceed 10% of the as-completed value

3 - The property is a one-unit, owner occupied home

Also, from page 1 - you have up to 12 months to finish the project, although I believe that is also partially decided by agreement with the lender, and they may be able to extend it depending on the circumstances.

Just wanted to correct the record for anyone else reading these posts.

@Gita Faust - Gita, is there any "quick reference" guide or tips or something that would give someone a fast overview of how to use quickbooks for real estate?  Assuming one already has the basics of quickbooks figured out, I mean ... like a top 10 tips with instructions for each tip, something like that?  I have the basics down, and I have an accountant that can help, but he's not an expert on real estate or on quickbooks.  It seems like taking a class is overkill based on how close I think we are to being able to get it right, but those few tips would make all the difference for us.

By the way - for anyone looking to do this, you might consider just doing a conventional Homestyle renovation loan (or FHA 203K, but I prefer the conventional over FHA), and once it's done, re-fi into a standard VA loan. You would put up a down payment and the rate wouldn't be as good, but it would only be for a few months until the project was completed, then you could re-fi with the VA 100% LTV benefit with a better rate, and you probably would be getting more cash back then you put in, assuming the property value appreciated more than the costs of the renovation.

This would also mean you could get more bids to actually compare with and pick the best one.  In this case, rates don't matter as much as lower closing costs, since it would be short-term.  You would pay a second round of closing costs, but only for re-fi, not with the additional seller / buyer closing costs that would be unnecessary (escrow, title, etc.).

So anyone searching for VA renovation loans can always use this model as "Plan B" if you can't find a good VA loan.

To follow up on this thread with a little more info I've found since my last post:

Found someone in our area that will do new construction VA loans - they were with this company:

www.annie-mac.com

Maybe they have loans in other areas, might be worth a call. The only VA construction loans they do are full / new construction or the energy efficient renovation loans (which I think are more common, but are limited to only energy efficiency improvements). The company I mentioned before (iMortgage) does $35K max VA renovation loans that can be used for any kind of renovation, similar to the FHA 203K Streamlined loan.

This means the only base I haven't covered is a renovation loan that allows for more than $35K (not new construction), similar to the Full FHA 203K loan and the conventional Fannie Mae Homestyle renovation loan.

It took looking around a lot to find just the two I've found so far, so it's hard, but not impossible to find lenders.  For all that work, it seems even less likely to be able to compare bids from different lenders ... if you can find two lenders that you can get competing bids from (on the same loan product), then you've hit the jackpot as far as I'm concerned.

I believe, like @Joe Norman mentioned, that you can do your own work on a 203K Streamlined renovation loan, which maxes at $35K for the renovation work.  However, you mention that you think you would have to hire someone anyway as it is work you don't think you can do yourself.

My opinion is that the Homestyle is always better than the FHA options, unless you are trying to do your own work and want to utilize the 203K Streamline option. I'd say get a homestyle loan and have a contractor do only the work you don't want to do, and then finish the construction loan portion at that point. Afterwards, then you can work on your own home as much as you want (although this will now be on your time and your dime).

FHA loans generally cost a bit more overall and tend to have a higher mortgage insurance, which you can only get rid of if you re-fi out of the FHA loan. Conventional Homestyle is less restrictive and gives you a better overall value, in my opinion.

@Michael Lleverino - in case you haven't gotten an answer yet ... business accounts vs personal accounts makes no difference to the IRS, because those are just labels the banks are using. If you open a bank account that the bank labels as personal, but you use it as a business account, so long as you follow all the rules and laws, the IRS can't tell you that you are not allowed to use that account for your business purposes. There are no rules you would be violating. The only thing they care about is that you don't co-mingle funds from two different entities. So long as you don't put use the bank account for personal use when it's for an LLC, then you should be fine.

If you do not have a separate entity (like an LLC) owning your property / rental, then it is personally owned by you and you can use the same bank account that you use for your personal use, as it's all considered one entity (you). Just keep good records for tax purposes at the end of the year. I've set up personal records accounts in quickbooks to be able to separate rental income and expenses from anything done on a personal level, and that is enough to be organized for tax purposes.