All Forum Posts by: Emily Reddington

Andrew, 
I have been working on this as soon as I received notice, which is never far in advance when it comes to KHC, we were given one month's notice.
I do agree that she can not afford to live there at the fair market rate, I was hoping for some way to not have to evict her and have the turnover costs.

Also Michael,
I do agree with you on needing to receive the payment in full somehow. I was just wondering if there was a way to either have her voucher increased again, or another way to avoid evicting her. We are currently renovating another duplex and would also rather not have to put forth the cash for turnover/ getting rent ready. 

Hello all!
This is my first post, so I am not sure how to reply to each of you, but will address here. 
Michael Smith, you are completely right. She is responsible for the remaining portion of the rent, however her $91 portion fell off quite some time ago. I fully know this was not the best business move (allowing her to not pay her portion), however she has been a dream of a tenant which is worth way more than $91/ month to me, so we have let it go. She is also a long term tenant with no intention to move, meaning we also save in repairs and missed rent with no turnover. Again, worth more than $91 to me even knowing it adds up. This is our side investment so with jobs and kids it was a good decision at the time.

Sorry I meant the mortgage is $990! 

Hello fellow investors! 

Hoping for some seasoned input on our current situation.

We own a duplex that we initially house hacked in. We rented the downstairs to almost cover the mortgage and lived upstairs. We had no intention of moving, therefore we payed a little more for the duplex than a good BRRR would allow. This house was grandfathered in as a duplex in a nice historic area where it's zones for only single family now. We were fine paying a little more as we wanted the area for ourselves.

Then within a matter of 6 months of purchasing, we found out we had our little oops baby on the way and my hubby landed his dream job about 2 hours away. We had to finish renovating our unit, bought another duplex and renovated our level again- all before baby was born.

Ok that's the backstory! Currently we continue to rent out the bottom unit (Apt A) to the same tenant as we inherited with the property. She's amazing. She is on a HUD voucher, rarely calls, very nice and is timely about her paperwork. Of course HUD is ALWAYS the hold up if things get messed up.

The upstairs is rented to one of my best friends for a significantly lower than average rent. I don’t like mixing business with friends, but she was in a tough situation so we are doing month to month as she finds a new place. Extremely clean, handy to have on site since we live 2 hours away and we were completely fine with the lower rent as we were breaking even.

We include a utility stipend in the rent, because HUD requires it anyway and neither unit has ever went over.

All was well for a matter of a few months after she moved in, however in my naivety, missed that our Apt A, HUD tenant's Older daughter was soon to be turning 18. This happened in February, and they will be dropping her rent the first of March.

Now, we will be negative cash flow a little over $350 per month.

I am very much not keen on raising my friend’s rent. As that is what we agreed on and I should’ve foresaw the downstairs rent decreasing and this is not her fault.

Also, right now is not a good time for us to renovate the downstairs unit if we decide the lower rent doesn’t suffice. We are currently in another renovation and usually DIY most everything. We like it, we like to work together, and it saves a ton of money.

What are your all's thoughts? I am having a hard time analyzing this as I feel it is unfair to all parties. It's unfair to my tenant to evict her because of her HUD payments (she's been there 5+ years), it's unfair to

My friend to request increased rent to compensate, and it’s unfair to us to have such negative cash flow- and this included estimated appreciation of the house.

I know business isn’t always “fair” but I do have my heart in this. I am not capable of shutting out the others in the situation- I completely realize this is not good for business, but I am more concerned with my morals honestly.

Any advice??

I have already looked in to refinancing and lowering the insurance costs with no luck.

“Regular” rent was $975 for upstairs and $1009 downstairs (we pay utilities out of this) with a mortgage of $900.