All Forum Posts by: Eduardo Rodriguez

I have a SFR that I want to convert to 3 or four rental units, I am confused by the IRC, definitions on duplex and townhomes, has anybody converted a big house into more than two units before, two stories, what is the big deal.

mainly because of the commercial rezoning requirements and fire coder requirements (sprinkler systems) on new construction

Hello BP community, so I have been lurking for a few weeks at all the posting and advice on the forums and have finally convinced myself that in order to maximize earning potential on a property I have been holding for a few years now I will have to convert it into a multiplex. the details are as follows:

• currently, owe 120K @ 4.7% 
• 6300 sf ranch style SFR, it is built on two residential lots (room to add a duplex adjacent to this property)
• currently brings in $1650 for rent, have rented out as high as $2000 (the Eagle Ford shale was booming a couple years ago)
• have been slowly upgrading and improving (new roof, new laminate flooring, some lighting fixtures, new paint)
• needs to be updated this was built in 1990, windows are old, some of the siding looks weathered and the worst part is the bathrooms are dated (everything is functional)
• I have looked at housing rents and most 2/1 or 2/2  usually command $900-$1300
• Appartments are a little bit cheapper $700-$1100

I had trouble using the rental estimator calculator, then tried the BRRRR, I linked the report estimating the following:

https://www.biggerpockets.com/calculators/shared/1083149/4f695ede-d602-47bf-a183-b0d69ff0cf64

• Upgrading showers 
• adding new back porch deck (for access to upper units)
• converting where two new upstairs rental units would have a kitchen, 2 baths, and 2 bedrooms (comparable to an apartment) about 800 sf ($ 1200 per unit)
• lower dwelling 3000 sf could be split as well or rent out @ 1500 (would update and add one more full bath) making it 3/2 and 1/2 very large dwelling
• All bills paid (water, sewer, power, lawn maint) about 1K per month

Please review and point out flaws, mistakes were made but so far all on paper and in process of cash out refi, to pay for this conversion. so far budgeted $65K. advice appreciated. more details as required

@Robert Gilstrap Please drop names I am looking for banking options to do this and most said this can’t be done Only security service federal credit union (over the phone) indicated that it did not matter

Matt, your rent payment includes the property tax on it, you are just paying it for the owner, however, it does make sense to rent when owning is not affordable, and income projections are better if used for investing rather than living. I just happened to start busying before I considered investing and analyzed for best case scenario, the math comes up as keeping the houses for rental since that is my objective.

I still own where I currently live but want to transfer that property as well to my LLC and rent it out while I look for my next purchase probably with an FHA loan.

Kim, if your current property is not going to make you any money as a rental, how much money will it bring in on the sale? If this is a fairly new property you might not have enough equity but you have already paid money for purchasing the title, agent, etc, you are willing to pay those fees again?

Tip: use the BP calculator to see what your property could do, I performed this exercise with a property I currently own and determined to keep after analyzing for rental with proper investing(already have the equity in them to do this).

I am fairly new, but think positive cash flow even if very low is still cash flow, but Jim K has some solid advice.

Representing Comal county, just getting serious myself, and new to BP really liking the vibe, good luck.

I see, that sound about correct, mom and pop shops over here start @ 300 for simple 1040 with 2 schedules and go from there. Thanks for the post.

Sure, one of my questions is am I going to find a CPA that does this sort of thing, so far I only see people interested in doing tax fillings and "business consulting & tax planning" but get no callbacks, is this expensive, is it only for larger business?

transferring one investment property into a newly created LLC, this is for liability and perhaps some tax advantages, my issue is I am having trouble finding the CPA resource that can help me to achieve this. I get many non-call backs when requesting service on their web pages, or they only want to do the tax filings. is it hard or too expensive to have some assistance in this matter or is DYS what most startup rental investors do...? (note I only have one rental property and about to get a second one, I also have been doing my own taxes for 10 years) Halp...