All Forum Posts by: Michaela Manco

If I currently have an FHA loan that was used to purchase a multi family 3 years ago, and would like to buy an owner occupied single family while keeping the multi as a rental, what are my down payment requirements? Is it favorable to refinance the current FHA into a conventional loan and then free up my ability to use an FHA loan for use on the single family?

I’d like to buy a new house this year. I have a w2 for my full time job and my rents I collect reflected on my tax return. I spent a lot on improvements on a rental this year (hvac system, new flooring) that usually I would have captured on my tax return but I’m worried that the lower AGI is going to affect how much I qualify for for the new house. Will it?

Here are some photos of what I mean by hay and pet food left out (this is their kitchen)

A month ago one of my tenants in a 3 unit building notified me that they heard a mouse running through their walls and that they believed they were allergic to the dander and had to basically live on Benadryl. They told me they were trying to fix the problem on their own but having no luck and still hearing them in the walls every night. This was late in a Saturday night that I was notified, I immediately contacted pest control and had pest control out early Monday morning. 

Upon letting pest control into their apartment that Monday, I discovered that their unit was not kept in sanitary conditions. They have 2 pet rabbits (the lease allows small pets), they had a bag of rabbit food tipped over and spilled in the cages, and hay outside the rabbit cages in an open bag and also sprawled out on the floor of their kitchen. Other rooms were cluttered and wall to wall clothing on the floor. All 3 units were treated by the pest control company. I informed the tenants at this time that everyone in the building needed to work together to ensure this wasn’t an ongoing issue, that pest control came in to do their job and now it’s on the residents to do their part to make sure the problem goes away. This meant making sure all pet food was stored in airtight sealed containers, keeping hay in containers, being diligent about not leaving food out and taking our trash timely, and also making sure a side door that was often left ajar was tightly closed to not allow an access point for pets. This all seemed well received. I followed up a week later to check and ask if they were able to get bins for the pet stuff and to ask if the noticed any reduction in mouse noise. They said they had noticed a huge reduction, told me they bought some bins and had a few more to buy. 

A month later a neighboring tenant reports a rancid smell in their unit. It turns out this is a dead mouse in the wall. I purchased an air purifier for the unit to rid the smell and had pest control back out to the whole building the same day the smell was reported. Upon inspection of the apartment that initially reported the mouse issue, the apartment was in the same condition it was a month ago. Still pet food and hay out, and no bins that they told me they purchased in sight. Now they are on a month to month and the lease mentions your standard clauses about cleanliness and conditions of the apartment. How would you proceed?

My question is how long does it take a guest to establish a tenancy in a Rhode Island? If a tenant has appeared to move a significant other in that’s not on the lease, does this person now have tenancy rights? From what I can tell it’s only been a couple of weeks.

I was 23 when I bought my first multi-family

I breed dogs, I love doing it but this would be a bit fat no from me. Puppies produce a massive mess that is sure to stink up your rental and also very likely to cause damage. Think the potential of destroyed floors, puppies chewing cabinets and anything they can reach. Then you also end up with the issue of what if a tenant has a hard time finding homes for them or if a new home decides to return their puppy.

@Mark Green congrats on the new purchase, I just bought my first in Rhode Island as well. I have found rentometer to be off for RI and have been instead going by comps on Zillow. Are you planning to attend this thursdays real estate investors group meeting?

Thanks all! Do you change this process for commercial spaces?

So, after what seems like an eternity, my first deal finally saw a closing table this week. It's a 3 unit (2 residential, 1 commercial) mixed use property that was purchased with an FHA loan. The commercial space was formerly a dog grooming salon but the space is very functional for other uses. This property had many hurdles. The first being that the property tax information entered into MLS was incorrect, the true taxes were double what was reported. The real issue came when we got to the appraisal stage. As previously noted this is a mixed use property consisting of 2 residential apartments and one commercial space. When the appraiser came to the property the listing agent told the appraiser that I was intending to convert the middle floor residential unit and the basement commercial unit into one larger unit. This was what the listing agent had in the listing that could be done, and in my initial walkthrough I had known right away that that was not my intention for this property. With this information the appraiser appraised the property as a duplex. I was using rents to qualify for the loan, so this was a problem. My lender went back and forth with the appraiser to get the appraisal corrected, and instead we had to get a second appraiser to come out and do another report. A week and a half after the second appraiser came out, we closed! I received the incorrect set of keys at the closing, so it truly was a nightmare from start to finish.

Here are the numbers:

Offer: $240,000 with $5,000 back for closing costs

Total Purchase Price: $245,000

Seller Credit: $5,000 for incorrect property taxes in MLS

Cash to Close: $8,575

Market Rents (According to Appraisal, Supported by rentometer and my own comps through Craigslist, Zillow, etc.):

Residential unit 1: $900

Residential unit 2: $1200

Commercial Unit: $800

This is a property that I can live in with the rents from other 2 units covering full PITI, and will have a nice cash flow even with so little down when I move out. There is also very minimal work to be done with this property. One of the residential units needs paint retouching and the commercial unit needs to be repainted and a good scrub down to remove any lingering doggie odors from the former business that was there. If you have any painting tips I'm all ears!