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Anyone have experience with the legal hoops for adding a separate apartment to a property? We're looking at a duplex with a huge garage and would like to look into renovating the garage into one or two apartments. State is VA.
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Dec 26, 2013 16:28
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This counter counter counter offering happened when I bought my house, and (in my area at least) I think it's because the houses are starting to sell for what people who bought in the bubble owe, after commissions and closing. They fought tooth and nail over a difference of $2500. The balance sheet at closing showed the sellers got back $700 in equity all said and done. They bought the house in 2006.
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Jul 31, 2014 18:15
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Howdy folks. Long time no talk! I'm looking to buy my first investment house. Probably something ~1000 sq ft, sfh, $80-100k, and hopefully work out all the kinks and buy more of the same type of house. I like this route because if required I could float the mortgage indefinitely. I'll be using a 92% occupied rate, and 150% mortgage numbers to build a slush fund and shoot for ~$200-300 monthly cash flow after those modifiers. I will probably use my old realtor, and a structural engineer as the inspector. I have some questions that hopefully y'all can answer: 1. Is the 150% mortgage rate and 92% occupied rate realistic, as a general rule of thumb? I'm sure it heavily depends on location and the state of the house but I need to start somewhere. 2. Anyone have any good calculators / spreadsheets for investment houses? No need to reinvent the wheel if it's available and free. 3. What am I forgetting and what's probably gonna bite me in the rear end? Thanks moneyfriends! e: this is in Richmond, VA if it matters.
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Jan 7, 2019 17:32
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Jealous Cow posted:Hello future river city landlord! Howdy! I'm looking just West of Manchester, or along Chippenham near Hull/Midlo. I admittedly need to do more research into the areas, but I've lived here for a few decades and currently I'm in Stratford Hills. Thanks for the Dodson tip! I definitely need to use a property management service, as I'm doing a bunch of other stuff currently. BEHOLD: MY CAPE posted:What do you mean by "150% mortgage rate"? Vacancy is very dependent upon the type of property and nature of the location. For example in college towns and attractive rental properties there can be virtually zero vacancy on the right properties. Whatever the mortgage for the property entails, I'll be halving that number and sending it to a savings account just for this property. If PITI is $500 my monthly costs would be $750, with $250 of that going to a savings account just for this house for maintenance purposes. I'm unsure if this is too conservative, but I'd at least like to start out very conservative and see if I can still get a positive cash flow out of a property. Adiabatic fucked around with this message at 18:49 on Jan 7, 2019 |
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Jan 7, 2019 18:46
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BEHOLD: MY CAPE posted:I see, what you are saying is kind of an unusual way to word the 50% expenses rule. In my opinion these robotic rules are kind of unhelpful because they make it more difficult for you to understand your business. How much money you will need to set in reserves really depends upon your overall rental business cash flow and the specific needs of the property, particularly anticipated midterm capital expenditures. If I were you I would make decisions really based on individual properties and your assessment thereof. I would treat a rental property that is going to require a new roof at some point differently than I would for example a freshly renovated property with new systems. If I had a comfortable portfolio of established cash flowing properties I wouldn't be that worried about reserves on one particular $100k property. Thanks! You're right. I will assess each one individually and break out some estimates of stuff it may need soon. Do you (or does anyone) have a good check-off list for major expenditures requiring inspection? I know a good inspector will go over this, but I'd like to grab information on them myself before it gets to that point. Off the top of my head: roof - new or old / patches present hvac system (both cold & hot if separate) - performance and age soft areas in walls or water spots on ceiling showing roof neglect and water intrusion water heater age obvious foundational issues - horizontal cracks, major settling, etc obvious electrical issues - old wiring, bad wiring, state of breaker panel obvious plumbing issues - smells, water pressure, clogging, slow drains appliances staying with property - age and performance Thermopyle posted:Yeah, all these figures I always see thrown about for occupancy rates are way too general. "Expect an occupancy rate of X%" is going to be just bullshit 95% of the time. In my mind this was just a starting point for me to spot houses that could potentially work. For the occupancy rate I really just wanted to have a more conservative number than 100% occupied for the initial SWAG.
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Jan 7, 2019 20:51
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| # ¿ Apr 28, 2024 22:48 |
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Jealous Cow posted:One other thing— I've seen quite a few for $80k-$100k but they look pretty trashed. I am totally willing to up the limit on the price of the first house if I can't find anything that works. However, I would like to get into something small and cheap at first to get all of the "first time investment property" kinks out without being beholden to a lot of cash every month. Any other spots you'd suggest? BEHOLD: MY CAPE posted:That is a good starter list but also look at stuff not simply from the perspective of maintenance needs but opportunity for inexpensive rental value added property improvement. For example spending $1,000 on a fresh coat of interior paint and $2,000 on laminate flooring and $200 to get the lawn fixed up and all the trees and bushes trimmed can instantly pop your monthly rent on a dumpy looking house by a hundred bucks or something like that. So let the actual property inspector do the hard work of finding problems and turn your eye towards the opportunity for improvements. You're right! I'm in a maintenance hole because that's the part I care about and am good at. I have blinders on about the importance of aesthetics and seem to have completely written off the actual "tenant as a human" bit by hand waving the idea of using property management. I need to look into both those areas way more. Konstantin posted:I'd also get the sewer mains scoped on any older investment property. A collapsed sewer line could cause a lot of damage from backups, cost tens of thousands to repair, and leave your tenants without sewer service for an extended period. Definitely. Added. Thanks again for everyone's answers. Y'all have any spreadsheets or programs you use to make the search easier?
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Jan 8, 2019 20:57
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