All Forum Posts by: Shelley Greene

Victor, does Puerto Rico have good investing opportunities as a landlord? I had a boyfriend from there for a few years and he always said it was a really expensive place to live, but that could have just meant utilities are high.

Welcome to Bigger Pockets! I have learned a ton from listening to podcasts and reading books the guests recommend. Are you college courses related to real estate? Be sure to connect with others from Puerto Rico before you get started (real estate tax advisor especially) because I believe some of the tax laws people often discuss on BP are different in PR than in the states. Best wishes to you in your real estate journey!

Hi Aaron, welcome. I'm fairly new to BP and REI as well. Have you set up keyword alerts yet? That's how I've done some of my most useful learning on BP. Set up keywords for areas you're interested in learning about. You'll get an alert any time a member makes a post with that keyword in it. When you're feeling like you've got a pretty good grasp on what you want to do, but you need to meet some people, check out the events/calendar for local REI meetups or look on meetup.com for them.

Hi Leo, welcome to BP! I'm fairly new here too, but attended my first REI meetup earlier this week. I can't say enough about how valuable it is! I had been hesitant to get started, feeling like even though I had read lots here on BP, I still didn't know enough. Everyone I talked with was incredibly welcoming and encouraging. I made connections and now feel like I have people I can ask questions of, who also value me as a someone they may be able to work with the future. You can look on meetup.com PacificNW Real Estate Meetup. Different people go to the Lakewood, Seattle, and Kirkland meetups, so it's valuable to go to each, and of course different people attend each from month to month.

Shelley

Hooray! I've been researching on bigger pockets (podcasts, books that guests recommended, and following conversations about Tacoma and buy and hold) for a few months, and I'm looking forward to meeting a bunch of awesome people!

Thanks @Tammy Hummel. I also have rented a room to a friend in the past who later became unable to pay. At the time, I didn't mind too much because I wasn't looking to make a bunch of money from it, and she was my friend. But I was thinking, just as you said, that if someone doesn't move out, it would be really difficult to get them out. Thanks for the confirmation.

Shelley

Hi all,

I'm just beginning getting into real estate investing. I own my primary residence, and I'm working towards saving up for a down payment on a duplex/triplex to rent out. What I am considering to help that go faster is renting out rooms in my primary residence (SFR).

The scenario: Everything I read on Bigger Pockets about renting says to be sure all your renters have a verifiable income of 3x the rental rate. I have recently met a few young people who are transitioning (1 army to civilian, and 2 recently separated). They are each currently unemployed, but have the cash saved up for a couple months' rent. All they want is 2-3 months of housing, because they plan on moving again when they find employment. I'm considering a rental agreement that states the move-out date in the contract (with option to extend under certain terms), and has them pay the full 2-3 months' rent up front, with a half-month security deposit also due prior to taking residence.

My questions:
Who do I ask to check that my lease is legally binding?
What happens if the tenant doesn't leave at the specified move-out date?
How often does that even happen?
Am I going way overboard - do people even usually sign rental agreements for renting out a room in their primary residence or do you just call it 'sharing living expenses'?

How much am I actually at risk for a discrimination lawsuit? I'm renting out rooms in my primary residence, I'm not advertising it anywhere (I simply met these 3 people in groups I'm part of), and I don't have any other properties. Most of what I have read about the minimum standards, aside from helping you choose tenants who have a high likelihood of treating your property well, is that having minimum standards is a way to protect yourself from lawsuit. Is it any riskier to have my minimum standard say 'must pay full contract rental amount before taking residence' rather than 'must have verifiable income of 3x rental amount'? I would still keep minimum standards of 600 credit score, no evictions, good references, and clean background check.

Any advice, tips, stories from experiences you've had are welcome!!

Shelley

Hi Jay,

It sounds like you might be in the same kind of situation I find myself in. I own my primary residence and am looking to buy a duplex as an investment property. When I went to the bank, I was told that because I have only been in my current job for one year, no income from commission or tips can be counted, and that banks are also hesitant to lend to someone whose income is self employed income. I got a second opinion from a friend of a friend who works with multiple banks and he said this is standard for all banks.

Something that has a potential to help you, if you've got cash enough for a large down payment: when purchasing an investment property, if your mortgage will be less than 75 % of what an assessor says the property will generate in rental income, you do not have to qualify on your income for the loan. The catch is that you have to put a 25% down payment down. I also learned that if you live in part of the duplex, it can be considered a primary residence and your down payment can be only 15%, but I don't know if the bank takes rental income into consideration in that case.

If that solution would work for you, bring it up with your bankers next time you talk with them. If they disagree, message me and I'll give you the contact information of the guy I talked with.

Shelley