All Forum Posts by: Andrew Jones

It's important to consider what type of tenant would live there when buying a property.  That being said, would you want a real estate attorney as a renter?  Just kidding...but I try to stick to properties with good school districts and high median incomes according to the census for the same reason.

Keep us posted and don't let this hold you up from buying the right property soon.  If you would live there, you could reasonably expect to have good tenants, you can afford it and it cash flows write an offer.  Good luck.

Absolutely. Too many cooks in the kitchen so to speak. I'd stick to your guns and only talk to people on the lease.

I would argue there is a TON of privileged information in a lease agreement and in order to discuss the agreement the parents would need to see it. SSN, date of birth, current address...if you leaked this information to an unauthorized third party you can, and should, expect to be sued. Think about it this way: what if that 18 year old was hiding from his/her parents because of physical abuse? Would a cell phone or power company let an unauthorized third party see your personal statement without written permission? You don't know their family situation nor do you want to be involved. I personally would only discuss with parents if the parents and students sign a lengthy legal disclosure...most of them will go away if I had to assume. I'm not a lawyer and not in your state so take this with a grain of salt.

Jason Sandegren , it did not occur to me that a portfolio lender may waive PMI! I'll have to call around on my next deal. What's the name of the credit union? I would say some liquidity is non-negotiable, so if the numbers work with the lower downpayment option I'd go that route. You can always accelerate the mortgage with higher payments when things loosen up. I saw that you're including your own rent savings, which is fair, but I'd also consider if the purchase would cash flow if it was purely a rental. It sounds like you could rent the carriage house for more than your current rent so I'm assuming it would. I'd say, pending an acceptable inspection, jump on it! The only advice I'd have house hacking that I wish I had known: -If you are inheriting a tenant screen them like you would a new one and conduct annual inspections! Our tenant has paid his rent and seemed good thus far, but on the refi we did recently I found out before the inspection that he has 6 cats (3 indoor, 3 out door) that were trashing his unit. He disclosed and is allowed to have one. I had to get in there with a hired hand to paint, shampoo the carpets and mop his floors to get rid of the urine stench before the appraisal. Clearly he has not cleaned in the time I've owned the property. I'll probably be non-renewing his lease in the near future. -Set up systems for managing the property that will work with 1 or 1,000 tenants. The first year I would take verbal requests for repairs, have loosely defined expectations for my tenant, all kinds of nonsense. Now we have copies of every letter we send him (and everything is communicated in writing), we have a request form to be filled out for any requests for improvements or repairs, and we fill out a PL every year to track the building's performance. I fear it's too late for this tenant but the next one will have a clearly defined set of expectations. -This last part is a little more difficult in an owner occupied, but I'd try to separate your personal funds from the building. This will make the book keeping more clear and let you know if you would actually cash flow if you rented out your unit to another. Have a separate account for the building and write a rent check to that account on what you think reasonable market rent would be. Also, lenders typically only count rental income that has been stable for two years towards income they will consider when deciding how much mortgage you can cover. Not a big deal on this property, but it could slow you down on acquiring the next if you can't show cash flow. Other than that, good luck! It is hard work but can be very rewarding. Let us know how it goes.

Also, you said "cash savings." If you have the ability to liquidate assets to cover a potential emergency then I'd probably say go for it.

The plan sounds solid, but I would be concerned about: -What are your "all in" predictable monthly expenses? Mortgage, taxes, insurance, mortgage insurance (since you'd be at less than 80% ltv), landscaping, etc. Accounting for all of this what do you think your PL statement look like? -I see a big liquidity risk here. It sounds like your savings will be wiped out in the purchase and closing costs if I'm reading this right. On a property this old major problems could pop up, but you could also have a financial emergency not related to the home...medical, accident, etc. No need to be proud here; if you have family that can, and would, bail you out should you need I'd count that. My wife and I are house hacking a duplex and it has been great. We've created $50k in equity over the last 2.5 years and our tenant covers most of our mortgage. Moreover market rents have skyrocketed due to the bay area exodus we've seen in recent years. I can't recommend house hacking enough, but only if you're able to handle a potential early set back.

I imagine it would depend on the age of the tenants. If they are legally an adult I don't see why you would be required (or even allowed) to discuss the lease with the parents unless the student has given them permission. If the are under 18 I don't believe they can sign the contract without a legal guardian. Any lawyers out there?

This is a strange one and it's flirting with paramedical services over real estate, but any feedback would be appreciated.  This idea came to me recently as we are struggling on finding an appropriate facility to care for my father (he has Alzheimer's).  The money is not the problem, he has a long term care policy that will pay $330 per day for the rest of his life plus they sold their 6 bedroom home in the SF bay area, but we cannot get a private bedroom in a memory care ward.  The facility he's in now charges $5000 per month for a private on bed plus medical expenses and move in fees (totaling around $6,500-10,000 per month)...there is so much demand at this price point that we are wait listed at three different facilities.

Then I remembered seeing this news bit about this enclosed town that the Dutch built:

http://abcnews.go.com/Health/AlzheimersCommunity/a...

Basically they can live relatively normal lives in a gated town as if they were living at home while still being safe as if they were locked up in a facility.  

The medical and legal stuff I'm working on with a care giving company, but the actual development of a parcel is out of my depth at the moment.  I'd need to acquire/build the following (local zoning and permitting allowing):

-A 10-15 acre parcel

-Main gated entrance with office building nurse's station and leasing offices

-Possibly a second gated entrance at the opposite end for emergency services

-A common area with garden surrounded by a circle of buildings including a dining hall, cafe, "office building" (fake offices with toy phones, etc), small movie theater and a rec center

-A large, two story apartment building with medical facility (for those with late stage conditions)

-Two small "suburbs" of tiny homes for higher functioning residents (stand alone studio apartments with no kitchen for safety reasons).  Most likely 200sq ft pre fab structures that can be finished out.  

The big questions (assuming this can be built legally in my area) is how to figure out the amount of capital I'd need to raise to develop the land and what I should look for in a lot of land to do this.  I'm sure I'm missing information and missed some important questions so feel free to chime in.

@Kelly Jones No worries!  Take it with a grain of salt because I tend to be a pessimist about properties when I consider flipping, but hopefully you find something that works and post about it.

I'd be interested too. I know plenty of agents but none of them seem to be real return oriented. You may want to try Patrick Stelmach over at Turton. Tell him I sent you. If you get close to making an offer let me know and I can run some rough quotes for you. If you are looking near downtown many of the properties are old and may not pass a traditional insurance company's underwriting.