All Forum Posts by: Susan Franke

Hi All,  

I'm looking to get another duplex for the purposes of house hacking. We've done it once very successfully and are ready to give it a go again. However, I'm seeing SO MANY properties that are zoned as Single Family, yet they have 2 units - either a MIL suite or just an addition that's been built.  How does this work legally? Does the zoning need to be changed? Will I get insurance for a multifamily or a single?  I'm told by realtors that "its fine"....I'm not convinced.  I'm in Palm Beach County - West Palm Beach. 

Thanks for the responses....I will wait. And yes, they are on the lease together. 

I'm a landlord of a duplex and a couple weeks ago we heard a loud argument (we live on the other side) and then she left with a suitcase and we haven't seen or heard from her. Their rent is not due for a couple weeks.....Do I send a message now and ask if there is an issue with paying rent this month? Or is it better to wait and only address the issue if they are late? On the one hand, I don't want to get involved in their personal business, on the other I'd really like to know if I should be looking for a new tenant and otherwise protecting myself here. I do know the person still there has a great job so paying the rent on his own *should* still work...Any advice would be greatly appreciated! 

Hi all. I want to make sure my expectations are where they should be. Looking to buy our first property - a multi family purchased with a low percentage down - either FHA or conventional depending on the property. We have in mind that we want to get $100 per door when we move out in a year or less, so we're running all our numbers with this in mind. With the small down payment combined with mortgage insurance, getting to this ideal seems very difficult. Should we be expecting this right upon us moving out, or should we be giving ourselves more leeway? I'm calculating how much we can pay for a property to get that magic number of $100/door, then thinking to offer across the board this number for multiple properties and hope someone bites...does that sound like a good way to do things? Thanks so much.

Thanks for the input, Brian and Mitchell. 

I'm not local but have been around the area for the last few months talking with property owners, business owners, went to community meetings in this neighborhood as well as adjoining neighborhoods, talked with city commissioners and realtors, walked the streets at all hours of the day and night. Lake Worth has come up a lot in the last several years and continues to grow and improve. 

I'm confident in our rent projection. These are large studios. Some units that claim 2 bedroom are half this size. Plus, the utilities are landlord paid. 

Tax number I used is the 2018 number....I know the tax will go up but did not work out an estimated tax. Very good point, thank you.

And yes, inspection - we know everything that needs to be done, have contractor estimates for all the work we can't do, and lots of knowledge for many upgrades and repairs we can do ourselves. Large repairs will be done right after closing, then unit-by-unit upgrades as we move through. We'd live in one unit, fix it up, move to another unit. A bit of a dance and a lot of work, but maybe for the right price - a potentially very good investment?  At the very least, we can offer low and walk away if need be.

Anyway, if anyone else wants to chime in, I'm all ears. eyes? 

Thank you!

Hi all. Today is the last day of an already-extended inspection period. Please help.

asking price 320K. downtown Lake Worth, FL. 4 plex wood frame 1936. land alone is worth 100K according to the county appraiser. fully rented now at 850 each for 4-400squarefoot studios, needs new roof, updated electrical, couple plumbing repairs, etc. its old....the owners have had this place 15 years and have only patched it up. we're looking at an FHA 203K loan.

The numbers: 

tax: 405

ins: 324

util (landlord paid): 500

5% vacancy 190

10% repair: 380

capex: 200

termite bond/spray: 50

total 2049/month, operating expenses.

if we dropped the price to 300K, (and we're doing FHA...3.5% down) we add 1554 P/I + 204 PMI. 1758 + 2049 = 3807 monthly.

estimating rentals can be upped to 950 (GREAT location, 400 square foot studios), this is our break even number...(270 asking price + 30K construction loan).

Is this a smart buy? break even now is only going to mean profits later, right? addition of insulation and new windows will decrease utilities and insurance, for example. the neighborhood is moving up up up - property value will only rise. 

A+ location, beautiful house.  

needs a lot of work, and we have to assume the cast iron sewer pipe isn't goign to explode the day after we buy it. 

Would really appreciate some advice from the masses, please. I'm under contract for an old wood frame 2 story from the 1930s. Home inspection showed that the house has good bones, it's in a GREAT location, and it's multi family with fantastic rental potential....but...roof needs replacing, cloth wires, cast iron piping, and an exterior stair/balcony structure needs replacing. We can only get this place if the seller is going to come down in price/pay for some of these major repairs...waiting on contractor estimates now. Our goal is cashflow. The rental income is higher than the mortgage payment. 

I won't get into all the numbers - that's another discussion. I'd like to hear your experiences with owning these old wood frame houses, please. Maybe this will help me make the decision. 

#Charley, thanks for your input. You say you were a lender "up until a few years ago". Well, It is my understanding that the rules very recently changed on this topic - as in this year - 2019. A quick Google search will tell you as such, and the lenders from both the big bank and the mortgage broker have said the same.  That said, I do understand that just because a mortgage broker says he can get me approved doesn't make it so. I also understand that I may not be the most ideal borrower as a first time landlord, but this doesn't mean its impossible, right? 

So my question still stands: Since my qualification is dependent on rental income of a particular property, how does it work with getting a pre-approval letter? 

Mornin' folks. 

I read that its a good idea to get a pre-approval letter to shop around for realtors and so sellers know I'm serious about buying, but how does it work when the approval is contingent on the individual property/proposed rental income? Can I still get that letter?

Background: I'm in the market to buy my first property - a multi-family, 3-4 units, and I will live there for at least a year, per FHA guidelines. My credit is great, but I don't want to drop the cash for a 20% payment on such a building. A large bank ran my credit and loosely approved me for an amount that seems too low to get very far (didn't get an official pre-approval letter), and the broker approved me for an amount nearly double (didn't run my credit but has all my financials). Bank vs. broker - HUGE difference in how they handle rental income.

Much gratitude for any insight you can provide! ~ Susan

Thanks for the tip, Justin! I just looked at the table of contents for that book - I think I'll find it very helpful! Thank you a thousand times over for reaching out!

@Justin Milesundefined