All Forum Posts by: Bradley Padula

Lenders want to see a year lease To better qualify for what? 

I've never had a lender ask what sort of lease duration / structure I'll use for a property I'm planning to purchase. You should definitely talk to your lender again and you may want to talk to a few more lenders

I can't imagine anyone who would sign what it sounds like you are trying to get at, which is a one sided lease where the tenant signs on for 6 months or 12 months etc but you as the landlord can cancel the lease with 30 day notice for no reason. Lot of uncertainty for the tenant

It seems like you just need a month to month lease

Even if you found someone who would be willing to agree to the one sided terms you mention (which you're doing to protect yourself which I get), you can still tell the tenants your giving them 30 day notice to vacate and they can tell you to go pound sand and make you evict them to get them out. So not sure what protection or benefits this adds

If proportional billing is common / legal in your area I'd say definitely look into it. Also, keep in mind your prospective tenant pool and what is commonly included/not included in rents in your area. Are you joining the norm by trying to use proportional billing or is it uncommon and might deter prospective tenants?

Have you considered adding a 2nd water meter and having completely separate water for each unit? That way unit #1 pays only for what they use and unit #2 pays only for what they use.

The proportional billing seems like it could cause issues where if one unit uses very little water, and the other unit a bunch, then one unit is subsidizing the other units excessive usage

Your agent is (should be) able to do this, if they're don't know how or aren't willing to you may need a different agent. Yes you go off recently sold properties of similar #beds and baths and sq footage etc. You can go to redfin, search the town, filter on "sold" properties, adjust min/max beds, baths, sq feet, sold within last 3,6,12 months etc and get a general gauge

Yeah you can refi after 6 months, If there is enough equity, absolutely. For your plan, you would need to refinance your triplex into an investment property loan in order to free up the FHA to buy another owner occ property. That would require 25%+ equity which is hard to get in 6 months like you plan unless you can add value by rehabbing or nearby sales go way up, thereby increasing the appraised value.

So if you bought your place for 265k, then you'd need the appraisal to come back at 355k or higher to get your 75% LTV needed to refi. Either that or if the appraisal comes in lower than you need, you can pay the difference in cash brought at closing. I haven't see any/many multi's selling for remotely near that range in Pawtucket

The downpayment assistance programs can be pretty strict in terms of payback upon sale or refi, so I'd def recommend reviewing that paperwork closely to make sure you don't have some unexpected $ you owe back due to refi'ing so quickly 

You could always refi it as an owner occ conventional loan to get out of the FHA loan, would still need 20% equity or 80% LTV. I'm not sure if you've discussed the actual logistics with your lender versus him just saying "I got you we'll make it happen" so apologies if I'm repeating info you already know haha

 Congrats on the house hack! 

Reglazing a tub won't affect the slope at all as that is not the intent of reglazing, reglazing a tub can be more or less thought of as painting a tub to make it look new again (just done with special chemicals). I've had owners use the at home kits and have it last 2-3 years and I've had owners use pro companies and get 3-7 years out of it. Of course they can last longer but is generally what I've seen.

If it makes you feel better, I've personally had a cast iron tub as well and the water seemed to pool like yours does. 

In this case the easiest solution is $10 of cleaning products and some elbow grease. A full replacement like mentioned above involves removing several courses of tile, smashing or cutting up the old cast iron tub out, any subfloor repair needed, cost+labor to correctly install new tub, plumber to tie in the new tub plumbing, re-tiling the walls as needed. Not a cheap fix

@Jaston Robinson congrats on your success so far! If you bought Oct 2020 via FHA, then you can't buy a new primary residence until Oct 2021 or later this year due to the occupancy requirements (unless you fall in one of the outlier exceptions like you move more than xxx miles away etc)

You're looking at 15% down minimum generally for an investment property condo or SFH. Or if you wait until you've lived in your current place for a year or more you can buy a SFH with conventional financing with as low as 5% down and lower interest rate than an investment prop. Then live there for 1+ years (with roommate's maybe to help balance out the mortgage) and after you've satisfied the occupancy requirements then you could rent the whole place out

One thing you could do is calculate the ARV on your current place after the proposed repairs and see if that will push the value enough the be able to have enough forced equity to refi out of FHA into conventional, and then you'd open up the FHA loan again to use on again multi with very low downpayment. If you keep FHA loan on your current place, then if you want another 2-4 unit you're looking at 15-20% down minimum via conventional financing as an owner occupant. And 25% down for a 2-4 unit via conventional financing as an investment prop.

You'd also may want to look into if any or all of the downpayment assistance becomes due if you move out of the property you're in now or refinance out of the FHA into a conventional loan

Sounds like the main thing you can do is continue making on time payments and keeping your balances low, and riding out the (2?) year window the hard hits stay on your credit report. If you use a credit monitoring / report service like TransUnion, you can see exactly when the hard hits will drop off your report 

Will likely be a breakeven or loss with a 6 plex. Large upfront cost to buy units, typically see no issues for months or a year or two, then big repair expenses as they start to break down. Cost to install the plumbing, electric, tie into building pluming for the washer drain, etc. Also based on the price set for the washer/dryer units to use them, some tenants may choose to use a local laundromat for less or wash at a friends house to save money. So hard to rely on the fact that all tenants in all 6 units will use the w/d (aka helping you make some of your $ back).

 Not sure how large the units are but one idea would be adding w/d hookups within some or all of the 6 units which then allows the tenants to buy their own washer/dyer if they want. That may be a value add if the feature of w/d hookups in unit could bring higher rents. You'd have to look in the area the property is in to see if similar units with w/d hookups are renting for a premium vs not having them. Good luck with the deal!

Hey @Cameron Johnson serious answer get off this forum post and call 10+ banks and find out. I got a loan before I graduated college several years ago with my job offer letter. Different banks have different policies. Find one that will work for your situation