All Forum Posts by: Edward Burns

I can not tell you how difficult a challenge it might be to the property re-zoned, but based on your numbers, if the property can not be re-zoned you can not legally rent the third unit, which would result in a negative cash flow at the current price.

With the tax records indicating it is a duplex, I would check to be sure it is a legal tri-plex. My gut feeling is you will find it is only zone as a duplex and no permits were ever received to allow the conversion to a tri-plex. Assuming it is illeagal, I would either walk from the deal, or renogiate the price.

With 20-30K, you might be limited, but I do not know the St. Louis market. I would anticipate that you could buy 2- $30-40K properties, putting 20% down and leaving $10K for unanticipated expenses. But more than likely, the buildings will have major issues that need to be addressed or are in a war zone or probably both.

My answer to your question depends on several factors.

Do you have the fortitude to put the $300/month in savings (or investments)? If not then you will not see a return on the 15K.

Is your debt-to-income ratio such that paying off the 15K will allow you to get a loan for a)more property or b)a larger property?

Is the price of real estate where you are investing such that there is a drastic difference in return on a purchase of $160K (40K of your 50K holding 10K as reserve) versus a purchase of $200K (your $50K keeping the 15K as a reserve)?

Without knowing these answers, I can not tell you what I would do? But neither option is necessarily wrong.

I seriously doubt someone would pay extra in rent for ground maintenance of the type you are describing. Nor would a tenant put in the time and effort in yard work that you are describing. If you do rent it, and want to maintain the yard for astetic and other reasons, figure on paying for the lawn to replaced yearly and do not expect the tenants to bear the cost as I do believe a judge would agree with you withholding a deposit for that reason.

Some properties while ideal for a personal residence are not nor ever will be good rental properties.

Personally I would never even consider renting a property with a high maintenance lawn such as you are describing. If you really wish to become a landlord, sell the property and find a rental home that requires less attention.

Your calculations appear correct, but I would question your interest rate. Banks charge 3.75% for a 15 year mortgage currently, so why would the seller accept 3%. I would figure at least 5-6% interest.

An alternative to the lint brush is to use a wet/dry vacuum and snake the hose down the dryer vent from the inside. Whatever you do, do not use the dryer until this is resolved. Some dyers have plastic rollers that the drum turn on. These can melt due to overheating resulting in damage to the dryer and possibly causing a fire.

I am sure this has been done and worked for others, but there are all kinds of things that need to be considered.

Primarily, as most houses that would be bulldozed are old, I would imagine that their lots may have been smaller that permitted by code currently. A lot with a 40' frontage may not be buildable under the new zoning laws. Likewise, lots in floodplain area might not be buildable. Just because there is a house there currently does not mean you can rebuild if the structure is removed.

Negotiating commissions when listing a property is a common and acceptable practice. There are several members here that never pay 6% or more for commissions. Therefore you are NOT disrupting the status quo and the listing and buying agents will work with it.

Now with low price property or less desirable property, negotiating a lower commission is harder, but still can be done.

A buyer agent will NOT skip over your property with a standard contract because of a reduced commission. They might with a discount brokerage. Remember real estate agents are just like the rest of us, wanting the most for the least amount of effort. A quick sell earning 2.5% commission is better than earning a 3% commission that requires 5x's the amount of work.