All Forum Posts by: Ron Gallagher

@David Zheng Great Job and I'm jealous. What made you pull the trigger and quit your job?  I am close to quitting my W-2 job and after I buy one or two more properties this year I will most likely pull the trigger myself, but I am always curious to know when others knew when it was time to quit.  Did you reach a certain cash flow goal with your rentals and then decided to quit? How did you know enough was enough?

Do the numbers work on your current house that it would cash flow as a rental? If so, If I was you I would buy a property and move into it to get a lower owner occupied interest rate and rent out my previous primary residence.  This way hopefully rents have gone up enough when you convert the property you are living in into a rental that you are getting some cash flow.

I would speak to some lenders to see if you could still qualify to get another mortgage to buy another property if you did a cash out refinance. Adding debt in the form of a cash out refi might increase your debt to income ratio to the point where you can't qualify for another mortgage. 

So what did "the coolest multifamily in DC" ultimately sell for?

@Brad Wood As I believe I mentioned in your other thread with the same topic (which apparently you didn't like the responses so you posted here) if your tenant isn't sophisticated (meaning they don't challenge you on the rent increase) then you don't need to do anything.  If they do challenge you on the rent increase then in order to be exempt from rent control you will need to register your rental with The Rental Accommodations Division (RAD).

Every housing accommodation or rental unit must be registered with RAD by filing a RAD Registration and Claim of Exemption form. Once registered, the housing accommodation or rental unit is assigned a registration number if it is subject to rent control. If it is exempt, it is assigned an exemption number. You put that exemption number in the appropriate spot in your DC Lease Agreement.

If you are challenged by the tenant about the rental increase, which in your case seems to be a little bit over the CPI-W + 2%, and you are registered as exempt with RAD then you can tell the tenant that you have the right to raise the rent to whatever you want.

Here's a pamphlet where you can read more about Rent Control in DC and cure your insomnia: https://dhcd.dc.gov/sites/default/files/dc/sites/dhcd/publication/attachments/RentControlFactSheet.pdf

@Account Closed Please report back what kind of an offer Bungalow gives you.  They don't tell you how much of a cut they take on the website, rather they just say "call us."

 If Ben buys in College Park then he should be OK. All the city officials that I have dealt with in College Park have been very professional and helpful, it's like a small town there.  Everyone seems to know everyone. He can self manage for the two years that he has left at UMD and learn a lot about landlording along the way, and assuming he's renting rooms out to fellow students I would hope that the students haven't learned to be professional tenants yet, more than likely his roommates would be normal students just trying to get their degree.  Then in two years if Ben decides to move when he graduates he can get a property manager, or let someone live there with discounted rent to be the live-in property manager, or maybe by then bungalow.com will have expanded from DC to College Park. 

I actually didn't know that "Johnny One Note" was a song until now. I just looked it up on YouTube.... good song! lol  

I learn so much from the BP forums haha

Michael, you are kinda becoming a "Johnny One Note" with your universal strategy for everyone, no matter what their situation, which is buy in Arlington and wait for appreciation from Amazon. My suggestion of buying in College Park will get Ben in the game and get him started with real estate investing now, and maybe he will be able to eliminate his college housing costs and with a little luck he might be able to eek out a little positive cash flow. Cash flow is very possible in PG County but there's nothing he could buy in Arlington that is going to cash flow, and at his price point of $300k the only thing he could afford to buy in Arlington is a condo at River Place in Rosslyn (which is on a land lease that expires in 30 years hence the more reasonable prices).

I believe you have to register your rental with the city in order to be exempt from rent control, but your $50 increase is within the rental controlled range. Also most tenants are not sophisticated enough to know about the rent control laws so you can normally raise the rent a reasonable amount, like you are doing, without registering with the city and without objections from the tenant. If you want to increase the rent more than CPI+2% and you have a sophisticated tenant then you will have to register with the city.

@Benyam Ephrem Do you have any money to use towards a down payment on a property?  If so, if I was you, I would buy a 4 or 5 bedroom house in College Park (where the occupancy law is up to 5 unrelated adults can live in a house) that is walking distance to the University of Maryland and move into it and rent out the other rooms and hopefully you can live for free and maybe even make a little money. I don't know where you are living while you are in college but this plan would reduce or eliminate your college housing expenses. Also, you will gain experience being a landlord by renting out rooms in your new house.

Assuming this is your first home purchase you can take advantage of several first time home buyer programs too: https://www.nerdwallet.com/blog/mortgages/maryland-first-time-home-buyer-programs/  

I have an investment property in College Park so I am familiar with being a landlord in the city if you have any questions. Good luck!