All Forum Posts by: Vivian D.

Thanks everyone for your much appreciated replies.  I learned lots of really useful things, for now and later. 

I decided not to raise rent as many suggested, not add to lease (I want the original tenant to be solely responsible for the lease), but add an addendum with the cousin as long-term guests and the tenant to be responsible for everything.  However, the tenant wrote a long email explaining the cousin is just there as nanny to her young daughter and his family is just there for a visit.  I do believe her though.  After all, there is no need for her to lie in this case (no rent increase, no penalty). Will, however, keep an eye to see if anything come up.

Overall, I am very glad I did as BP suggests and have the scheduled maintenance visit done every few months. 

Thanks everyone and happy landlording!

Anh

Hi everyone,

First off, very grateful for everything I can learn from BP and to everyone for the contributions.

My question this time. I have just done my first scheduled maintenance visit to my first rental (great tip from BP-ers).  Found quite a few things: leak in kitchen sink (my contractor is going to repair that for us based on his 1-year labor warranty); smoking in attached garage (going to ask tenant to stop doing that due to "non-smoking" clause in lease).  Most alarming is clear sign of unauthorized occupant.

The tenant is a single mom with her 3 young kids. Everytime my husband and I come to visit the house for some initial repairs since the beginning of the lease, we have always met with her cousin who claims to live nearby, has no car, and is there to help his cousin (the Tenant) with the moving.  Now 4 months passed and we came to maintenance-check the house and we saw him, his gf, and his 1 y.o. son in one of the rooms in our 4br house.  I am sure they live there, not staying over, because I saw his clothing & shoes in the closet in the room, with a few boxes of size 4 diapers that can only be for his son but not the tenant's youngest daughter who is going to be 3 yo soon. My son is 2 so I'm pretty sure about the sizing.

My PM suggests to give them 2 options: 

1) move out - I am not sure we can enforce that. 

2) add the cousin to the lease, after proper background check, with increased rent to $1550. Current rent is $1350/mo, which is a little high in the area.

I personally think $1450 will be more practical. An increase of $100 a month is easier to be accepted. $200 might be too high (I doubt that he - the cousin - has any job at all), and they may go with option 1, and just try to hide better whenever we visit.

I want to add that I do not want to risk loosing this tenant. Apart from the cousin living there, we are happy with the tenant paying the rent on time, keep reasonably good care of the house, being reasonable in all of our dealing thus far. We have also already signed an addendum for second year lease with discounted rent providing the first year lease is in good standing, hence saving me vacancy and placement fee with PM.

Please advise if should go with $1450 as new rent to ensure they stay, or $1550 as reasonable rent for 2 families living in one house. Is there any other aspects I should look into if adding the cousin to the lease?

Much appreciate all responses.

Anh Dang

I really like the look of the bathroom and the overall color scheme throughout!  Congrats on the job and look forward to more of your projects with before and afters.  Thanks for posting!

i was about to post a similar question then this thread pop up. Just the info i needed and saved me time. BP forum rocks?

Hi Huy,

I have similar numbers to yours. My first flip now turned rental (just have it contracted for $1350/mo this Nov 1) is a 40 yo house, 1562 sqft. New lifetime roof, new tile flooring, brand new kitchen & baths (all with granite counters), new insulation, new paint, plus some other minor touches (siding, garage doors, landscaping, etc). Cost me 34.5K (could have been lower, about 3-4K is my mistake as first time rehabber).

I know a company named Alpha Realtors down in Bellaire area (the international district).  They charge $100/month which is below 1% as commonly quoted here on BP.  However as far as I understand, they only work with landlords who also buy and sell with them, hence the low rate. In fact, I just listed my first rental with them a week. Will see how it goes.

Hi Joe,

Thanks so much for your early reply!

Yes everything paid in cash, so refi is good idea.  However, more clarification please:

- By CF you mean I keep it for rental, is that right? However, we do not want to keep this house for rent due to location (we are not yet ready to deal with lower-end renters).

- My mom is non-US resident so her share of CF will result in different kind of tax liability on her side, seems like too much trouble for us.

Any more input? Thank you!

Hi everyone,
I have a (complicated) question regarding double closing, foreign investors buying and selling properties in the US, and beyond.

Due to our current situation (long story), we cannot afford to have extra income (beside salary) being shown on our tax report for the next couple of years. We have completed our first rehab on a SFH (YAY!) and now trying to sell it, get the cash to buy more rentals (rental income is OK). And yes, we don't want to keep this house for rental, hence the complicated story.

According to my realtor (who used to be a CPA), the only way to avoid any extra income being shown on our tax report is to have the house sold for no profit (after deducting purchase + holding + renovation + selling costs). She advised us to sell the house to our mother who is a non-US citizen for no profit, then my mom as a foreigner can immediately sell the house at the market value for us. Essentially, my mother is only acting as an intermediary for us in this transaction.
- Cost wise: The realtor (very experienced one) can arrange title transfer from us to my mother for around $500. So we will not have to pay double closing cost.
- Time wise: The realtor said her team can make title transfer between us and my mother in within a week.

1) My first question: If it is just title transfer, do we have to have some kind of funding money transferring from our account to her (not yet set-up) US account? If there is no fund to be transferred, will it has to be done as "gifting" or not, which might result in any tax liability?

2) After researching BP forums, I understand that my mom has to pay FIRPTA tax rate on her gain. I assume it will be higher than if we sell the house under our name which we have to accept due to our situation. However, I am not sure how much the tax rate is if she does not hold it under an LLC, since this is only a one-time thing for her. The house is in the 125-130K value range.

3) The money is essentially ours (we own the house free and clear). My question is about how to get the money from the actual buyer directly to our account - is that possible? If the buyer wire the money to my mom's account (actual seller), then do we have to pay tax if my mom return the money via "gifting"?

Any other issue/matter that I need to look into while doing this kind of double transaction trying to sell the house?
Any comment is greatly appreciated!

Thank you everyone so much for taking the time to give me your good thoughts, much appreciated! I have read everything twice, if not more times, and have taken notes to make sure your valuable inputs will be put to work! This is the reason I feel so lucky I am here now on BP! All the best!

Thanks @Cuong Le for your tips. I had a look at your website and am very impressed! Hope to have your advice when the time comes I get my first property for rent.

Thank you @Mehran K. I need to get over my fear taking first steps into cold water first, and hope a good realtor will help me along the way.