All Forum Posts by: Scott Harlow

I have a 4-unit property with two workshop/storage spaces that are unused now that I'm finished with the rehab. The property is located in a downtown area where it's not uncommon to rent storage space to non-tenants. I'm currently looking into any potential zoning/land use issues. I have a few questions that I'm hoping the BiggerPockets community might be able to help out with:

1) Would this additional income ever be factored in to the value if/when I sell the property?

2) Would the income from these storage spaces make it difficult for a future buyer to obtain a traditional mortgage (i.e. require a commercial loan)?

I have a community laundry room in a 4-plex consisting of one washer and one dryer. The previous owner set the laundry room up to run off of one of the units' utilities. She would then agree to pay for that tenant's water bill since the tenant was on the hook for the gas and electric used by the laundry room. I hate this situation and want to figure out a better solution.

I have an available electric and gas meter that are currently unused. I could easily install a panel on the laundry room and have separate meters for the gas and electric (in my name) but I would still need a water meter...or I could shell out a few thousand extra and have a separate washer/dryer combo for each unit (more maintenance issues?) and now I'm not responsible for any of the utilities.

What would you do in my situation? The way I see it, I have four options:

1. Get rid of the laundry room (current tenants would likely be very unhappy)

2. Leave it as-is (water bill for laundry + 1br unit is typically $50-$65 per month)

3. Separate utilities and place in my name

4. Install a washer/dryer in the other 3 units

Congrats! I just went through this myself. I'll share what I did. So far, it has worked well for me but this is by no means the only way to go about it.

1. I did not have my tenants fill out a new tenant checklist. They did not fill one out with the previous owner either. Having them sign one would be a good idea - at least it gives you a snapshot in time so things can't get worse. It also gives you a good chance to meet with the tenants face to face. My leases in the future will have a move-in/out checklist. 

2. I wouldn't replace anything that wasn't due to be replace or needed replacing. No need to fix something that doesn't need fixing. 

3. I would contact the tenants as soon as possible. I sent an email to the tenants the day I closed on the property. At that point you are the new owner and they need to be able to contact you about any maintenance or questions they might have. 

Thanks for the info! @Zack Karp and @Upen Patel I'm going to look into this as it would be nice to drop PMI from my monthly mortgage payment.

Thanks @Jessica Wilson. That makes sense to me. It sounds like I should probably link up with a Commercial REA to make sure what I'm thinking is viable. This is certainly outside of my realm.   

I have been in the market to rent workshop space. Spaces are hard to find in the downtown area where I'm looking to rent. Lost of artisans and artists snap these spots up. I've come across a retail/commercial property in what is already a decent location, but with the way things have been going in my city, I suspect it will be a prime location in a few years. It has good visibility and will really stand out when fixed up. 

The seller is willing to carry back and the monthly payment will be right around what I would be paying to rent workshop space. The building is rough, hence the low price, but my thinking is that I could essentially "live and flip" this property. Use it as a workshop (maybe rent part of it out as workshop/art space to cover part or all of my monthly payment) and fix the property up over the course of the next year or two. 

My question is, when flipping retail/commercial space what are the important factors potential buyers are going to be looking at? Do you tailor the space to a particular type of business or do you rehab it so that it is more or less a blank canvass? 

Thanks @Upen Patel. If the property appraises for 20-25% higher than what I paid, I'm assuming I could refinance to a conventional loan without having to put down any more cash (since conv. loans typically ask for 20-25%). Do you know if this is the case?

I bought a multi family property with an FHA loan. Are there federal guidelines on how long it must "season" before I can refinance or will it vary from bank to bank. Anyone have experience with this?

In some instances it might make sense to buy a home with cash (maybe it will make a lower offer more attractive for reasons others have stated) with the plan that you will refinance for 70-75% of the value - extracting a majority of your cash out of the deal. 

Great tip. How did you "run into" him? You both happened to be at the property at the same time?