All Forum Posts by: Mason Jeffries

@Nathan G. Thanks for the sound advice. I’ll need to come up with a formula that makes sense based on an estimated average. I have no interest in creating a new monthly chore and attempting to calculate the tenants usage for each bill. Thanks again

@Patricia Steiner That is a great tip and I will likely end up including the utilities I think. Wow I would never even think of setting usage limits. That’s sounds very unreasonable anyway. Although it doesn’t stop the cell phone companies does it! Thanks for your input!

Hi everyone! I am prepping for a house hack scenario and I’m trying to wrap my head around sharing utility costs with tenant. The deal is, I’m going to rent out my 3BR house while I live in the downstairs apartment. Like a Duplex.

Do I estimate the cost of utilities and include it in their rent? What other options do I have ?

Somebody must have this figured out and I’d love to hear from you!

Thanks, Mason

@Lili Thompson

Hi there! I have the sections printed out from the IRC 2012 regarding basements and I’ll see if I can dig them out for you for some more detailed info. I’m the meantime here is what I can remember off the top of my head.

-Make sure it’s zoned for two-family dwellings if it’s intended to be a legal duplex

-Min ceiling height is 7ft from finished floor

-Obstructions(air ducts, piping, etc..) can be no lower than 6’4”

-Any wood framing that touches masonry(brick, concrete, floors and walls) must be treated lumber or divided by a moisture barrier

-Every room must have an egress window if it is considered living space (bathrooms, closets, mechanical rooms are not living spaces)

Great idea and best of luck to you!

Investment Info:

Single-family residence fix & flip investment in Big Bear City.

Purchase price: $119,000
Cash invested: $7,000
Sale price: $139,000

Although I did not know it at the time, this was my first and only house flip. I bought this cabin in the mountains for my mother. She lived there for less than two years. I converted the house from propane to natural gas, built a deck, replaced some fencing, and painted the outside. We didn't make much on it but it was the best option at the time and a great learning experience for me. Looking back it at now I wish I would have held onto it and made it a short term vacation rental.

What made you interested in investing in this type of deal?

It was not intended as an investment at the time. It was an affordable option for my low income mother and I made it happen for her. Although if i would have had the same mindset i have now a few years ago i would probably still have it.

How did you find this deal and how did you negotiate it?

MLS

How did you finance this deal?

FHA Mortgage

How did you add value to the deal?

I made a bunch of repairs. The house was not up to code when we purchased it. I also made some upgrades like a deck in the back yard, painted the outside a more appealing color, converted the propane heat to natural gas, rebuilt the gates and some fencing, and a few other minor items.

What was the outcome?

We sold the home and made just enough money for a house hacking situation for my mother. She used the profit to buy a large trailer which she lives in on my in-laws property for next to nothing. They did not hit us with capital gains tax because she was the primary resident and had a low income.

Lessons learned? Challenges?

-Should have kept it as a vacation rental. It is a cabin in a popular southern California mountain resort town.
-Don't trust everything the buyer discloses, or doesn't disclose. There was so much not to code, it would have been impossible not to know about it.
- Finding good contractors! I did a ton of work myself, but we had to hire a guy to install the gas meter and it was not a good experience.

I'm looking into buying a single family home and creating a basement apartment making it a duplex. Does anyone have any experience with sub-metering the utilities and creating a new address or adding unit numbers?

• Who do i go to in order to add unit numbers to the address? City/County? Post Office?
• Does the new unit need a dedicated electrical panel and meter from the power company?
• Does it need a separate air conditioner, Furnace, water heater, etc..?
• What can be sub-metered and what cannot?

Has anyone added a kitchen and bathroom in a basement, and if so, what did it cost to bring the water and drainage below in order to build it out?

@Kyle Deutschmann @Luka Milicevic   Thanks for the great advice! Moving 2k miles away has its challenges and any information helps at this point.The second home idea is intriguing. That sounds like it might be a really good option for us considering we both make healthy income right now and our income after the move will be unknown. Awesome guys! Thank you!

How to move to Nashville, find work, and purchase property at the same time?

Hi all! Moving out of state seems to have its logistical challenges. My wife and I want to buy a house in the Nashville area, but how do we qualify for a loan? Vanessa may have an opportunity to transfer jobs within her company, but it’s not a guarantee. Is there a way to get a loan and purchase a property before we move? Like a second residence maybe?

The obvious solution here would be to find a short term rental in Nashville, secure new jobs, and then apply for the loan. But the kicker is, we have 2 large German shepherds who are destructive while we are away. They really limit our rental abilities.

So how do we time all this? Is there a way to qualify for a mortgage during a transition period in which we may or may not have secured new jobs at that time? We have great credit, a healthy savings, and debt free.

Any advice would be much appreciated!