That huge difference between rent and price is a red flag.

The trap is that newer buy and hold investors sometimes calculate cash flow as scheduled income less PITI and end up in the red as soon as anything happens. 

If the basement was unfinished when you purchased the house, it would have been easy for you to ask if a permit had been pulled for the partially finished  portion. or to check with local zoning.

Your real life example was done in a red state, pre GRC/DF, Safe Act or both.

@Anna Rynders I think you may run into zoning issues aside from the others issues.

I’m planning on a cash out refi to get my money back out of the deal and to build out a second unit in the downstairs ( it’s already zoned for multi family)Just curious on the LTV percentage I’d be able to get with equity position I have.Thanks in advance!

``````````````````````````````````````````````````````````````````````````````````````“Everything you want is just outside your comfort zone.”

IRS Extends Tax DeadlinesThe IRS issued guidance Thursday evening to grant deadline relief for both 1031 like-kind exchanges and opportunity zone investments that are already underway.

I'm showing you nearly $150 in the red each month, @Paul Welden.$900: GSR($72): Vacancy - 8%($54): Repairs - 6%($54): CapEx - 6%($70): Taxes($20): Insurance($175): HOA($90): Management - 10%.

Hello,I am looking to buy a 3plex as an off-market deal from a friend of a friend in Berkeley.The property is zoned as R2.