All Forum Posts by: Tim Burke

The cost to add the additional unit may actually exceed the forced appreciation gain. This is especially true if inside the city of Ithaca - the city has very strict code enforcement, and lots of rules about who can and cannot do certain kinds of work. For example: you're not supposed to change a light switch or power outlet in the city without a permit and the work being done by a licensed electrician. 

Adding a new unit to an existing property would likely need to go through the city planning board and zoning board of appeals process, with an architect getting involved. They may require you to bring the rest of the property up to current code. Not saying you shouldn't explore this, just be aware the process may be long and expensive. Friends in Ithaca recently added an accessory dwelling unit when reconstructing the garage at their SFR in Ithaca and the process has taken well over a year navigating the city bureaucracy - with a couple of construction starts and stops because neighbors complained (spuriously) to the code office.

Hey Melissa! 

Former UX/Frontend Engineer turned Software Architect here. Also real estate investor. Ithaca itself can be quite expensive, depending on how close you need to be to campus. Personally I live in the Village of Groton, and used to commute from there to Cornell every day and it's fine ~360 out of 365 days per year. I own three duplexes in Groton (one of which I house hack), plus a 4-unit in Cortland. Cortland is a little far to commute but I know people who do it. 

Tim Burke

The relevant text from the law is:

Do not take the following as legal guidance obviously, as I am not an attorney. 

I asked Cozy about this a few weeks ago at the BiggerPockets conference and their answer was that the line "THE LANDLORD, LESSOR, SUB-LESSOR OR GRANTOR SHALL WAIVE THE FEE OR FEES IF THE POTENTIAL TENANT PROVIDES A COPY OF A BACKGROUND CHECK OR CREDIT CHECK CONDUCTED WITHIN THE PAST THIRTY DAYS" allows a landlord to request from the potential tenant a copy of their reports. Such reports can be purchased from a service like Cozy and forwarded to the landlord. The landlord is not charging an application fee, merely directing the potential tenant to a service to purchase their own reports at their own cost. 

A quick search on Trulia shows dozens of multifamily properties in Rochester (https://www.trulia.com/for_sale/Rochester,NY/MULTI-FAMILY_type/). Trulia is useful because it has a filter for multifamily. I do echo the sentiment of the others - find an agent that's familiar with investor buyers, or at least multifamily house hack buyers. I'd be willing to bet you'll find a few here on BiggerPockets, or get some referrals from people here. I'm a little too far from the Rochester market to be helpful, but @Jerry Padilla offered some referrals. 

Have you considered doing both by house hacking? You buy a small multifamily property (2 to 4 units) which qualifies for owner-occupied residential financing similarly to a single-unit, live in one unit and rent the others, letting the others pay your mortgage and expenses, and learn as you go. I've done this for a few years now and it's been very financially freeing. Allowed me to pay off my student loans early and continue investing in more properties. 

A simpler option that for some reason never seems to be discussed: with your rental properties in your own personal name, purchase a liability umbrella policy from your insurance company / agent. I pay $250/year for a $2,000,000 liability umbrella. May require paying a tiny bit more and having all of your personal and rental policies with the same company, but honestly not having the extra complexity is nice.

I think you're better served doing a live-in flip. The section 121 exclusion thing is pretty powerful if you can force appreciation on a property while you're living in it. @Mindy Jensen did a podcast episode about this a few weeks ago (https://www.biggerpockets.com/renewsblog/biggerpockets-money-podcast-05-jump-starting-early-fi-plans-live-in-flipping-mindy-jensen/). She goes into the kinds of work you should (reasonably) do yourself vs. the things you should contract out. As @Aaron K. mentions, if you do bad work, it will affect the resale price of the property. 

I'm flipping a house right now and we opted to put on vinyl siding rather than repaint the wood. Painting in the winter sucks for the contractors - siding they can at least do the prep work and cutting indoors when it's cold. Also vinyl siding is low maintenance and buyers like that. 

Investor from the Ithaca area here. I own a couple of multifamily properties in the area between Ithaca and Cortland. One of the interesting things about the economy here is that it is in large part driven by four schools: Cornell, Ithaca College, SUNY Cortland, and Tompkins Cortland Community College - meaning that the market here stays relatively stable and since there are lots of non-permanent people, the rental market stays reasonably strong (even if you aren't doing student rentals). It looks like there are a couple of schools in Schenectady, so that may help keep the market stable even if there is some downturn in future. 

YMMV, so do your homework.