All Forum Posts by: Joseph Weisenbloom

@Jai Reddy Yes it was from craigslist. She texted me but I have not talked to her on the phone she claims they don't have phone service. I wasn't taking her seriously so I didn't think she would actually mail the check. I just emailed her again tonight when I got the check and I wont cash it until I figure this out.

So I have a bedroom I am trying to rent out and I have been getting emails from a woman that claims to be in a remote fishing village in Alaska right now and is moving to Austin. She says they don't have phone service so she cant call me and she wont be able to sign a lease until she arrives in town. In all honesty I didn't really take it seriously because it sounded like a Nigerian prince scam. Usually I want to meet the tenant and explain them the lease before they sign. Make sure they are a real human and feel them out.

So she mentions she is going to mail a check for first months rent and deposit to secure the room. I forget all about it because it doesn't sound real. Well I get my mail today and find a check for $5600 from her which is deposit and 6 months rent. I was sort of floored because I've never had a tenant pay ahead like that but it also set off my spidey senses as well.

My question is would you accept a tenant that is renting a room sight unseen that you have never met before? Does this sound sketchy at all or just weird?

@Betty Cruz You want the house to be zoned as a duplex so it is considered a conforming property by lenders and thus get a 30 yr fannie mar loan. I dont beleive there is any grandfathering as far as I know. I discussed this with multiple people at the developental services department. I am actually in the process of converting it back to a sfh for sale.

@Jacob Rothfield@Seth Teel

I have not heard of this being pulled off successfully. Getting anything done involving a rezoning or a variance is a long and arduous process that could take up to 6 months and cost you thousands. Nothing can be done without first getting the approval from the local Neighborhood Association giving a favorable recommendation. I tried to get something passed through Beacon Hill Neighborhood Association and hit a brick wall. Typically the people that are parts of these groups hate change or growth of any kind. I was trying to change single family to duplex on a property I bought that had been converted decades ago illegally. They shot down the zoning change even though the property had been functioning as a duplex for a long time. When I asked why they decided against they said "Because Trump got elected and everything is on hold". Literally makes no sense. 

@Kenneth Williams Doing anything with CPS or SAWS is a nightmare in my opinion. They know that this is a way for investors to increase returns so they make it very expensive to add meters. They look at investors as these rich people that they can take advantage of. Even the amount they charge for monthly service is much higher for properties with 2+ meters. Keep in mind if you add a submeter system that is not an official SAWS or CPS meter you will need to find a way to charge the tenant for their usage. Your honestly better off saving yourself from paying electricians, plumbers, SAWS, CPS etc and just rolling the utilities into the rent.

In other news SAWS continues to be making money hand over fist buying up 8 million dollar buildings and charging customers like we are still in a drought. http://www.rvk-architects.com/work/projects/san-an...

I'm going to do my best to make sure this doesn't turn into a typical buy cash vs leverage debate. I currently invest in class C and B multifamily and leverage up with 25% down conventional loans. I have 20 units and have a property manager to help me out. The quandary I am in is that most of the money that the properties produce goes out the door to pay the expenses (mortgage, maintenance, capex, vacancy, insurance, PM fees, utilities, taxes etc). This doesn't seem very efficient to me to have that high percentage of my income going to expenses. It seems on paper that I am better off because I am leveraging but in reality I am worse off because I am being inefficient.

On the flipside wouldn't I be better off instead of having 20 MF units leveraged having 3 higher end single family houses  paid off? This would produce a much lower top line revenue but my net profit would be potentially higher because I am capturing a high percentage of the rent collected. For example if you have only 3 units you have the ability to self manage because its not that many tenants and single family tenants are easier. You can write into the lease that the tenant is responsible for utilities, lawn care and small repairs. For larger repairs you can DIY and save tremendously. You don't have to save for vacancy because you don't have a mortgage to pay when vacancies occur. Obviously you don't have a mortgage so that boosts the bottom line. Seems a lot more efficient to me and potentially more profitable.

Am I a fool or do I have a point?

@James Orr@John W.@Eric James Guys an update for the forum. So I was able to do a cash for keys program with my tenant and get them to move out early. Rehab work started last week. Looks like it will be around 10k to combine electric with permits and everything. I'm hoping to do a light cosmetic update and recombine both sides to sell it in the 180k-200k range. 

@James Orr Absolutley I will try to keep the forum updated on the progress. First step is to see if the tenant will vacate early. 

@James Orr The house is in decent condition and when I talk about rehab the main thing that needs to be done is combing sides to make a legal single family house. The 200k-325k range depends how much I want to update. 200k is if I reconnect the duplex and make it a legal SFH. I won't need to do much updating just need to make it legal so I can get end buyer with a conventional loan. 325k would be if a reconnect the duplex and upgraded everything.

I hear what your saying about the rehab cost to profit ratio. Ive factored in 10% closing costs and commissions into the equation. Personally I think the smart move will be to do the bare minimum to convert it to single family and sell the house in its current condition.  

Biggiest thing im concerned with is how much it will cost. Making sure the cost to reconnect the duplex isnt super high. If at any time it doesn’t make sense to continue I can still sell for cash offer.

@Eric James Yes it is a duplex in single family zone which means in it cant get traditional financing. Thats what Im planning on doing after its vacated.