All Forum Posts by: Joseph Escamilla

Hey everyone - I currently have a triplex under renovation and one unit is ready to be rented out. The utility setup is unique. All 3 units share water , 2 out of 3 share gas, and electric is completely separate. To make things less complicated we increased rent by a flat fee of $250 (average of the past) and are saying tenants are only responsible for electric. 

My question is am I allowed to market the rental saying rent is $1,050/m and then in the description show that utilities are $250/m? For some reason my Realtor is telling me I MUST list it at $1300/m and then just put in the description that water and gas are included.  My worries are 1) for people that filter by price we wont even show up.  And 2) for potential residents comparing my unit to other units with same bed/bath count and sq footage I will automatically look like a much higher price especially if people are just browsing and not reading the description. 

Is it a law that I have to list it at the higher price? It just doesn't make sense to me since I am trying to convey how much the unit costs for the space. I don't think anyone will be taken aback that they also have to pay for utilities. If anything I think it's a benefit that they don't have to create account with utility companies and they can be frivolous with their water/gas usage! 

Hopefully someone with experience with this can help out. Thank you in advance!

Joe 

Hey everyone I am currently in the process of looking for my first deal. Ideally, I would love for it to be a house-hack that allows me to live for much cheaper especially because I am in an expensive market (Long Island)

In my search for duplexes i see that some are listed as “legal 2 families” while others are listed as “accessory apartments”. I was wondering if anyone would be willing to shed some light on the difference between the two?

My main concerns are:

-if it’s an accessory apartment am I technically not allowed to rent out the other unit when I decide to move out? From what I’ve researched it looks like I have to keep it as my primary residence in order to rent out both units.

-i know it probably differs between markets but does anybody know the process/cost of converting an accessory apartment to a legal 2 family? And would it even be worth it?

Any help/information would really help me narrow my focus. Thanks everyone!

@Keith Manchester

Hey Keith! When deciding whether or not to pay points, frankly the answer is : it depends.

-Do you have excess cash for closing costs or will you be stretching yourself too thin if you put more money down? If you’re struggling to make the down payment and closing costs, it may not make sense to add any more points as you will have to bring them to the table for a purchase. Save your money for repairs and reserves.

-Let’s say you do have some extra cash to pay for points. Ask your Loan Officer how much money you will save on your monthly payment for each point that you pay. In this case it may make sense to pay points if you intend to hold the property for an extended period of time.

-For example, let’s assume you are buying a property and your total loan amount turns out to be $300,000. In this case, 1 point would be $3000 since 1 point is equal to 1% of the total loan amount. If your loan officer tells you paying one point will save you $65 per month, you will recoup this $3000 in 46 months ($3000/$65 per month = 46 months). If you plan to hold the property for longer than this time, then every month after you recoup your costs will be $65 in savings that you would have paid otherwise had you not paid the point upfront at closing.

At the end of the day you need to shop around to different lenders. Everything can be negotiated. Ask each lender what will your rate be with 0 points and what will your rate be with 1 or 2 points. Get loan estimates from each lender and leverage them against each other to get the absolute best deal you can.

With that being said do not ALWAYS go with the “cheapest” lender. Go with the lender that you trust will communicate with you throughout the entire process. Not being informed about what’s going on with your loan can be a headache/nightmare and in many cases not worth the small savings. You have the right to walk away at any moment you want up until the closing.

I really hope this helps and was not too confusing! Please ask questions if you didn’t understand :)