All Forum Posts by: Shain Ismailovski

@Evan Polaski Right, my thoughts exactly. The situation is tricky and this municipality is notoriously anti-landlord. Won't be surprising if they tack on extra issues.

One of my clients gave me a call and let me know he had just received a court summons for illegally renting an apartment. The property is a legal two family, but the bottom unit has a basement space with a full kitchen, it's own entrance etc that was being rented out essentially making it a 3 family. 

He wanted to know whether he should get an attorney and dispute the charges or simply accept any fee the courts give him which could be a few thousand dollars.

I'm not an attorney, but suggested he consult with one anyway to see what his best options are. Curious to know what some one else would do in this situation? 

Hmm I might consider renting the property as you can typically rent in around 30 days on average and selling can take an average of 60-90 days or longer. This will give you a chance to start getting some income and paying down your mortgage. One less thing to worry about when moving. That being said, make sure you have the ability to run the property from afar that will include finding a property management company who can run the place for you and collect rent. With the numbers still making sense. If renting long distance doesn't make sense financially to you then I would sell. The impact of Coronavirus to this upcoming season is still unclear. With interest rates so low buyers have a lot of power, but experts in the industry are still expecting this to be one of the most profitable years yet. Many people may also believe this is perfect time to buy with rates so low.Crunch the numbers on both options and go from there.

Tenant pays to replace broken window :)

Read "Long Distance Real Estate Investing" by David Greene if you haven't already. It will give you a better idea of the whole concept including do's and don'ts.

You can invest wherever you want. It doesn't have to be the same state and for many like you investing in the same state doesn't make a whole lot of sense. CA being a good example. Essentially it is up to you to do your due diligence and look for new markets to invest in that make sense to you. You can try neighboring states first, but I wouldn't get to hung up on proximity since the goal is to have a good team established first that will be your boots on the ground, starting with a property management company. Websites like CityData are helpful in looking at employment stats, poverty stats, and rental stats in a city. Narrow down a market and start analyzing some deals. If the numbers make sense, go from there.

A Certificate of Occupancy (CO) permits the legal use and occupancy of a property providing it meets the standards of habitability set forth by law. A CO is typically needed for a real estate contract to close. If you are not living in any of the units, some municipalities require inspections to issue a separate CO for the tenants living in the units. 

@Victoria Coleman Not always. Depends on the area. In Northern NJ where I primarily invest it’s extremely difficult to find a property that cash flows at the 1% rule so if you do find one you know its rare and worth looking into. Otherwise, I’ll usually compare all the numbers when making a final decision 

Too early to tell. Right now it's only at $11 an hour so the impact is still minimal. Before taxes that's only $22,880 a year assuming they work full time. The average cost of a studio in NJ is roughly $1084. Using the rule of thumb that your rent should be no more than 30% of your income per month that would only allow for a rent of $528. So unless you are looking at a place with roommates it still isn't that impactful an increase. It will reach $15 an hour in 2024 and even then that would only allow for a rent of $720, which is somewhere closer to doable depending on where in the state you're looking. While it may give a group of individuals a chance at getting a place there is really no large impact on an individual renter. I'm no economist, overall allowing more people access to a higher amount of money isn't a bad thing especially if that is being pumped back into the market. To your point I think it will make some rentals more stable, but especially when there is more than one person in the unit.

@Collin Hays Sorry to hear about the hardship with the cabin. You would think pieces of history like that would have more protections given to the owners should something like that happen.

My oldest is about 30 years old. I try not to go much further than that. My first property was built in 1905 and constant maintenance costs and issues I had with it were't worth it. I drew a line in the sand at 30 years max and so far so good (knock on wood.)