All Forum Posts by: Kyle J.

@Marisa Alvarez  The main things would be not to discriminate against her because of her disabilities (which it sounds like you're not), and then allow any "reasonable accommodations" requested by the tenant for their disability.  That doesn't mean you have to pay for these things, but you'd have to allow them (assuming they're reasonable).  And of course if the tenant needed a service animal, you'd have to allow that.

You can read about these things in more detail here: https://www.tenantresourcecenter.org/renting_with_disabilities

@Mark Nielsen  So this applicant has a documented history of not paying debts that he allegedly owed to multiple people/companies, and even the government?  To the point that at least some of them had to file suit against him to try to recover the money they believe was owed to them?  

Yeah, I'd say that's a red flag when screening a potential future tenant.  

This is probably correct in every state EXCEPT California.

@Dana Sample  If you're going to buy properties with tenants in them, it's going to be critical that you understand certain landlord-tenant laws, even if you don't personally intend on becoming a landlord.  Because these laws will still effect you and have a major impact on your bottom line. 

For example, there's a law in California that says you can NOT evict a tenant (even a month-to-month) tenant unless you have one of two things: 1) a property that qualifies for an exemption, or 2) you have "just cause".  And selling a property does not qualify as "just cause". 

So be careful when people tell you that you can just "evict" a tenant after you buy it if they're month-to-month, because that's almost certainly not the case and you'll likely be stuck with the tenant.  That might not be a bad thing if you're intent is to become a landlord.  However, if your intent is to flip the property (which it sounds like yours is), it could really throw a wrench in your plans.

Well there you go.  That was exactly my point.  6 people are just not going to be able to take a shower within the hour while they're running a load of laundry and the dishwasher.  That's just not realistic.  

Here's a worksheet from energy.gov to give you a ROUGH idea of what you would need based on that usage:

If you do the math, 6 showers in an hour + a load of laundry and a dishwasher cycle would be 73 gallons of hot water.  So you'd need about an 80 gallon hot water heater.  That's not realistic for a tenant to expect you to install that large of a water heater in a 1300 sf, 3 bdrm, 1 bath house.  Your tenant's needs are just too great and they need to learn how to conserve hot water, or space out the demands on the existing hot water heater.  

One final point to help you out...the reason you're not finding much in your online searching for laws that address what is "adequate" when it comes to this, is because there is no law that addresses it specifically (at least not in California, where it appears you're located).  

The basic law you need to comply with is the Implied Warranty of Habitability.  You can find a list of the conditions you must ensure are met in order for the property to be considered legally livable (and by default, rentable) under California Civil Code 1941.1.  For example, the property must have hot water, but it doesn't say anything about needing to provide hot water for 6 people to take a shower within a single hour while they run a load of laundry and the dishwasher.  

So you're good.

@Grey Stone  The size of the family is not the ONLY thing to take into consideration.  It's also HOW and WHEN they use the hot water.  50 gallons could be more than adequate if they space out their showers.  Or 50 gallons (or even possibly a larger size) could be completely inadequate if they all try to take showers one right after the other while running a load of laundry and the dishwasher at the same time.  See my point?

The way I see it, you've already upgraded and doubled the size of the water heater once.  They now have some ability (and responsibility) to control HOW and WHEN they use the hot water that would make this water heater work for their needs.  Consequently, I personally would not put in another new water heater.  

Even if you did put in a larger water heater, there's no guarantee that they wouldn't still use it in a manner that would put you right back in this same position (them complaining about a lack of available hot water when they need/want it on demand).  So, to me, it's just not something I'd be willing to do.  

Perhaps they just won't be happy in this property and for BOTH of your sanity it's best to part ways and offer to let them out of their lease (if there is one).  However, advise that that if they stay it will be with the knowledge that you will not be replacing the water heater.

Just my two cents. Good luck. 

@Matt Nico The way I found out is because I’ve had one of the Chase Ink business cards for over a decade and they’ve never reported to my personal credit report. :)

I think the starting credit limit they gave me was $20k, which isn’t too bad I guess for a business that had no history at the time. (I didn’t ask for any particular amount. That’s just what they gave me at the time, so perhaps you could get even more.)

One last benefit I forgot to mention is that you can get separate cards for any employees (or anyone really) that you may have who need to do any charging for you.

So if you have to send them to Home Depot or wherever, you don’t have to give them your card. They’ll have their own card that will have its own number so you can track where they used it and all the charges that they made. 

@Matt Nico I usually recommend the Chase Ink business cards. Another benefit of those that you didn't mention is, they also have cash back on all your purchases. Plus, they also don't report your balances on your personal credit report. So if you end up charging a lot on a rehab project or something and running up a fairly high balance one month of $10k-$20k or whatever, it won't have any effect on your DTI ratio if you happen to also be applying for a mortgage or something.

@Misael Carlos Vera I’ve never even heard of a carbon dioxide detector for the home. What you need are carbon monoxide detectors and smoke detectors.

I’d double check what you actually have, as well as your local/state laws. In most states, they’re actually required by law.

If for some reason you find you don’t have these devices, and they’re not legally required, I’d still get them and install them as they’re just good safety measures/peace of mind. 

Unfortunately hard money is still a loan.  And, as Andrew pointed out above, there are restrictions to using delayed financing.  One of them is that no "mortgage financing" was used to purchase the property.  

So you need to truly buy "all cash", or use a loan not secured by the property you're buying (i.e. a personal loan, HELOC on another property, etc). Any hard money lender is going to require a first position loan on the property they're loaning against though, and - in that case - you wouldn't qualify for delayed financing.

If you're still interested, you can read more about the delayed financing requirements at this link:

Fannie Mae: What are the requirements for a delayed financing exception?

@Ramsey Persing  Well, money from a private lender is certainly no gift since there's an expectation of it being paid back.  And, if done properly, the borrower would never actually be in possession of it.

Here's how it the actual funding would work from a very high level overview:

- The purchase agreement between the buyer (you) & the seller get taken to the escrow/closing agent (whoever that is in your state) 

- A bunch of stuff will happen (e.g. inspections, title searches, etc), and at some point right before closing your private lender will be contacted by the escrow/closing agent and told to wire the amount of the purchase price they agreed to fund to the escrow/title company.  You will also have to wire whatever your portion is (unless your private lender is funding 100%, which is usually not the case.)  Then the closing takes place a day or two later and you own the house.  

Now fast forward 3-9 months (or however long it is until you sell the flip, or refi if you'll be holding onto the property as a rental).  Here's how the private lender now gets paid off (again, just a high level overview):

- At some point, the lender will be requested to fill out a "Demand" where they list how much they are still owed in terms of outstanding principal balance and any remaining accrued/unpaid interest that is due.  (The lender will also be asked for other information such as how much the interest is accruing on a daily basis since it is likely unknown exactly what day the loan will be paid off at that point; wiring instructions; notarized reconveyance paperwork; etc.)

- Once the home is sold or refinanced, the lender will then be paid off in accordance with the "Demand" and wiring instructions he/she previously provided.  (Note: I usually receive the funds the same day, or the next day at the latest, from the escrow/title company.  It depends on what time of the day they initiate the wire.)

That's about it from a high level.  Keep in mind this wasn't meant to be a detailed description of the entire real estate sales/closing process.  I'm just trying to help give you an idea of how the funding portion of it works.  Additionally, who actually handles the escrow/closings varies state-to-state, and sometimes within a state.  For example, some states use attorneys, some do not.  In some places, escrow/title companies are two separate offices, and in others, these are in the same office.  Hopefully you focus on the idea/process I'm explaining to you, not the terminology used (since that can vary so much.)

Ultimately, I wish you the best of luck in your future deals!