All Forum Posts by: James Mc Ree

My only nit with your plan is that I would not charge to replace the key.  I assume the tenants made copies of the keys and change the locks on every turnover and don't really care if they turn in the keys.

Hard money or private lenders are individuals or institutions that are usually less bound by rules and regulations than financial institutions.  They probably won't give you a 30 year deal, but maybe 5-10 years, after which you arrange other financing.  Hard money lenders can usually fund a deal much faster than traditional financial institutions and possibly with less paperwork.

A downside is cost can be considerably higher than a traditional bank loan.

https://www.google.com/#q=hard+money+lenders

It looks like you collided with a lender policy.  Call other lenders, but be up-front with them about your situation so you don't spend unnecessary time or more money.  Consider hard money lenders if institutions won't deal with you.

First, check the zoning you already have.  It may already be allowed.  If not, you have two options:

1. Pursue a variance to show that you have some hardship that you did not create which requires you to have a 3rd unit.  I suspect that has almost no chance of success.

2. Pursue a zoning change for your property or area.  A change just for your property has no chance of success.  That is called "spot zoning" and is illegal.  Zoning is applied to an area, such as a neighborhood.  You may be able to persuade your local government to change the zoning for the area, but that can be a significant effort.  It goes well beyond a more narrow goal of just wanting to create another unit in your property.

You need to check your local building code for the definition of a unit.  There is going to be a room requirement, such as kitchen, bathroom, bedroom, etc; an access requirement and more.  That definition is probably what you need to focus on as your local zoning officer can quickly tell you if the 3rd unit is permitted by zoning, but you will still have to figure out if you can build it if allowed.

Certainly, not a deal-breaker.  Here are 3 ideas:

1. Make it part of your purchase offer.  Ask the buyer to arrange for the tree to be removed or trimmed.  Buyer may fail, but may have the best chance at success and might be highly motivated.

2. You talk to the neighbor owning the tree to see if he would be willing to take it down or allow you to take it down.  You could offer to replace it with a nice 6-8 foot tree or two!

3. If #2 fails, and you want to go this far, learn your local rights concerning the tree.  In PA, you can trim up the plane of the property line.  You could tell your uncooperative neighbor that is your plan to assess reaction.  The end result will likely be a sour relationship with your new neighbor and possibly other neighbors and an ugly tree.  Proceed with caution on this idea.

Consider other investments if you cannot invest $500k in your local market.  Ideas to consider:

Real estate - outside your immediate area or just out of state

Real estate - REIT funds, syndicates, partnering with a local builder/flipper to provide financing, etc in which you are directly or indirectly invested in real estate

Traditional stock/bond mutual funds

I would not invest in real estate for a 3.6% return.

You may need to replace your sump pump.  I replaced one of mine a few years ago for less than $100.  Easy.

https://en.wikipedia.org/wiki/French_drain

This is a good financial modeling question.  There probably isn't enough info in the post here to do the model justice.  I'll give you a way of thinking about it.

I see at least 3 options:

1. New furnace with baseboards as is.

2. New furnace and central air.

3. Heat pump (you didn't mention this, but it may work in your area)

Each has a cost.  #2 And #3 have substantial ductwork required, drywall and paint that needs to be included, if not already.  You probably also will want to remove the visible baseboard heat equipment.  Each option results in an expected return in rent and property value increase.  What does the model say?

Example:

#1 - $3,000 cost; $1000/month rent.

#2/#3 - $8,000 cost; $1200/month rent.

You will recover your cost difference of #2 or #3 at $200/month.  It is paid off in a little over 3 years.  You may also get a home energy tax credit.  How long do you plan to hold the property?  Increased property value of having a newer furnace and central air adds to this when you sell.

Good luck!

Most sellers will take a little less than their current asking price.  How much varies depending on the market and seller.  The seller's mortgage may make a difference too as it needs to be paid off with the sale.

You could offer $70k with a home inspection contingency.  Be more or less firm on the contingency findings depending on how the price negotiations go.

Have you modeled at what price the investment is a good deal? I buy in that range in PA for 3 BR rowhomes that rent for $1200. I would buy at $75k for $1200/month if the property needed no work.

It all depends on the location.  You will probably find you have higher turnover with 1 BR/BA than if you have 2 or 3 bedrooms since your tenant is likely to move out as soon as he/she meets someone.