All Forum Posts by: Ryan Swan

@Matt Dickens the easiest option is converting existing sqft under roof to a bedroom. This would usually be a den or office that simply lacks a closet or doorway. The next more expensive option would be converting covered parking to livable sqft (carport or garage). This involves more work such as exterior walls, weather proofing, insulating, adding electrical, and heating/cooling. Now you've given up any covered parking, so make sure the cost/benefit of the bedroom outweighs covered parking. Most cities would want you to pull a permit to do this conversion, but I'm sure many people have gotten away without one. The third and most expensive option is adding on an addition, but this has the benefit of increasing the size of the house while maintaining covered parking.

Keep in mind with option A that you need to be aware of the existing square footage. If you have an 1,100 sqft 2/1 and you convert it to a 3/1, then it's going to be a very small 3/1 relative to other properties. 

Every city will have properties of every class from A to D. It's not to be used as a blanket statement like Phoenix is a "B Class city".  

It's likely not an investor that would be interested in this, but rather a home buyer who is willing to give you the extra time needed to live in the home after close of escrow. It does happen pretty often - short term (say under two weeks) it's usually called a post possession or post occupancy agreement. For longer says (1 month or more), it's called a sale with leaseback and you would obviously be expected to pay a market rent to the new owner and pay all utilities/upkeep while living in the home. There's a limit to how long most potential buyers would be willing to do the leaseback, so the shorter the better. If you ask for too long of a lease, then it will greatly limit your potential buyer pool. 

Looks great! That tripod TV stand is rad

> You do not need to form an LCC when just starting out. Just have good insurance.

> You can use Transunion SmartMove for basic screening

> You will need to notify your insurance company. You also should check out the rental property tax matrix on the AZDOR website to see if you are liable to collect and remit privilege taxes (depends on how many rentals you have and which cities they are in). Better to not notify your lender and just make sure you are set up for e-statements and autopay on the mortgage. 

> Standard rental should have: fridge, dishwasher, stove, microwave (if built in), disposal. Nicer rentals usually include the washer/dryer as well. 

> Definitely rent it unfurnished unless you are doing a short term rental. 

Source: I've been a landlord for going on 17 years across multiple property types and cities around town. 

There are small MF listings all over Maricopa county, but most will be concentrated in Phoenix, Mesa, Tempe, and Glendale in that order. Other smaller cities have a few MF here and there but not many. We've helped clients close multi family deals deals from Youngtown in the West valley all the way out to Mesa/Apache Junction and everything in between. 

@Jabbar Adesada there's no perfect solution to the problem. You can err on the side of keeping the tenants happier, or on the side of minimizing your expenses. Some of the fixed utility costs (eg internet) can be easier such as: $89.99 per month divided by house occupants (say 4, including landlord) = $22.50/month for internet. If one tenant moves out, then the landlord should eat that share of the internet cost while keeping it fixed for the 2 current tenants. 

Electricity is probably the most difficult because it can swing wildly from December (lowest) to July/August (peak) bills. At my own house we are on the plan where the full year is averaged to make consistent monthly payments - so we pay $275/month regardless of the time of year. I would then do the same thing and divide the monthly average by the number of occupants. Here you could make small adjustments +/- depending on the size of the tenant rooms (larger master suite may pay slightly more than a small single bedroom). I would have each tenant sign a lease addendum that spells out exactly how the utilities are split up so there is no confusion or ambiguity down the line. 

The EASIEST solution is to just make a per room rental rate that is all inclusive (internet, electricity, water, gas, trash, pool, landscaping, whatever). So your 1-bed (no bath) rents for $625/month. Your master suite rents for $725, and so on. You calculate your average monthly utility overhead and then price the rooms accordingly. 

Where is the rental that you're seeing 30% dip in rent rates? We're seeing the opposite here in Phoenix (even during the peak of Covid). I listed a patio home (basically a single level townhouse) for rent in September and had people crawling over themselves to rent it. 

A well run short term rental will generally be more lucrative than a long term rental. Before investing time and money, you should make sure the condo CC&Rs allow short term rentals (<30 day term). If they do not, then you need to be comfortable rolling the dice to operate a STR.

@Evan Anderson waive inspection period, waive appraisal contingency, put down more earnest money, make your earnest money non refundable (aka hard), close quicker (or longer) depending on which is preferable to the seller. Have your agent explain the risks/benefits of options #1, #2, and #4 before employing those strategies. 

You're competing against cash offers and financed offers that might be putting more money down, so you need to be hyper competitive with your offer. Sometimes that means taking risks that you otherwise wouldn't if this were a buyer's market. 

I just closed a 5 bed + 3 bath house in Tempe for a client to househack. The really funny/lucky thing is that the seller had been house hacking it as well, so we were able to get a lot of helpful advice from her. My client already had at least 2 tenants lined up before close of escrow.