All Forum Posts by: Stephen Chittenden

You might consider alerting your insurance carrier. If you satisfied the legal requirements, you may not have any liability, but they would likely appreciate the heads up should a suit later be filed.

2 Votes

Bob, care to provide a site for that? Worst case, it seems they would disallow deductions for the period that the property was not in service, but I can't come up with any provision of the tax code that would allow them to impute rent to you. At this point, it seems they would likely argue that he has converted the property from an investment property into a personal residence.

0 Votes

@Todd Gilfoy Welcome! We used to live in Bel Air (off of Moore's Mill and Hickory) and still rent out our old townhome there (unfortunately, at a loss). We recently did a BRRR in Harford County (Havre de Grace). You can read about it and see pictures here: Our First Deal. We're currently working another one in Havre de Grace and have a three-unit multifamily that we finished up in Cecil County (Elkton) this year as well.

0 Votes

1. Create an LLC.

2. Your partner contributes the house to the LLC.

3. You contribute your 5% down payment to the LLC as an initial capital contribution.

4. You give the LLC a note for the value of the house (less 5%) as a capital contribution.

5. You make payments on the note to the LLC.

6. The LLC rents out the home for market rent.

7. The LLC gets a loan personally guaranteed by you and secured by the home to use for other investments.

0 Votes

Congratulations! That's a fantastic amount of sweat equity. We follow the same approach, but use someone else's sweat to build equity, so we don't create quite as much of it. It's still a powerful approach to building a decent portfolio. We've gone from 2 to 7 doors in about 18 months. The journey is just beginning.

0 Votes

Be sure to check state and local law to ensure that any late fee is permitted. For example, Maryland has a maximum late fee of 5% or for leases with rent due weekly, $3 per week.

0 Votes

Originally posted by @Warren Bright:

@Stephen Chittenden excellent bit of advice there, so thank you for your contribution.

The building is definitely not run down - it was build in 1981, so just fairly old. This means that all the apartments, unless they have been renovated, have had the same look since their inception - and this I am wanting to upgrade.

I also want to do a bit extra cause there is a possibility of me staying there when I move out of home, and I wouldn't mind living in a decent place.

Sounds good. In my case, I had to keep telling myself that I won't be living in the places. We do a nice job renovating them, but they're not at the level I would want to live in. Fortunately, my tenants are less demanding than me. They want nice, clean places to live in safe neighborhoods. Beyond that, they aren't too picky about tile vs laminate or other things. You've got some other considerations. Good luck!

0 Votes

Originally posted by @Warren Bright:

Hi everyone!

After years of saving and the last few months of looking at different properties to purchase, I have amazingly had my first offer accepted on a deceased, 1 bedroom apartment estate.

This is my first step in building my property empire, and I am so incredibly excited to get things underway and share it with the BP community. Owning property has been a dream of mine since a young age, and I am looking forward to the journey ahead!

The flat is in appalling condition as the current tenant (who is also the deceased mothers son) is unemployed / a druggie and has not respected or given an ounce of TLC towards the property.

After years of watching Grand Designs and practically every renovation show I feel comfortable in my vision of how the property will look, and the steps that need to be taken in order to achieve that look.

My niche market that I have decided upon is "Affordable Luxury". This means finding an apartment in a general area and going above and beyond to make the tenant feel like they are better off than those in the surrounding flats / houses. I don't have a problem spending a bit extra on nice porcelain tiles and stylish looking finishes if I know it means I will attract more of a 'higher classed' tenant, and giving me a higher rental return.

My renovation will take a month and I plan on:

-Gutting out the flat, removing the carpets and parquet flooring
Knocking down the wall between the kitchen and the lounge
Installing new kitchen cabinets with a stunning island, AND A BUTLER SINK! (It's a personal favourite)
Removing the bath, tiles and horrible colours in the bathroom
Removing some BIC's from the bedroom (there are too many cupboards)
Tile throughout the bedroom, kitchen and lounge with large porcelain tiles
Add a shower and modernise the bathroom with wood-look floor tiles and beautiful wall tiles.
Completely repaint the flat

I invite you to join me on this journey. I will be posting photos and videos as I go along, as I know how much everyone loves to watch the visual transformation of a project ( I know I do ).

The first step is to wait for transfer date and hope that the druggie tenant decides to move out and not cause any problems. Wish me luck!

Good luck on your journey and congratulations on getting started. My only advice would be to make sure you are not overdoing it on the rehab. The neighborhood has to be able to attract the higher-classed tenant you are looking for. No one wants to live in a stunning apartment in a run-down building, except the people willing to live in a run-down building. As long as your finishings aren't an over-improvement and you're being realistic about the tenant pool and rent you can collect, you'll do fine.

0 Votes

Originally posted by @Quintin Richard:

After locating our first property, negotiating an acceptable price, and finally closing in mid November, I am excited to officially be able to consider myself a real estate investor. The property is a small, single family, in a small market, however we were able to secure a decent tenant, and $300 passive cash flow / mth, after only two days of listing. Our target is to invest in ready to rent, single and multifamily homes, and this one certainly fits well into that criteria. New roof, New central ac/ht, new water heater, and stove, left very little prep prior to listing is for rent. Patience has been the biggest obstacle so far. These types of properties are few and far between, but we understand that our current lives do not offer enough time to buy low and remodel, prior to renting. With this being my first property, I leaned hard on Bigger Pockets for structure and guidance. This turned out to be so helpful, because after studying this site for several months, I decided to use the listing agent in my pursuit of this property. This gave me the option of asking if the agent would consider giving up their listing $ to make the deal. (Which they did). I would have never known about that option without Bigger Pockets. Now the search is on for the next property and hopefully another nice story to tell.

Congrats on your first deal. Getting over the initial inertia can be a huge hurdle. You've done more than many will. Good luck on finding your next one.

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Originally posted by @Daria B.:

My only caution would be to make sure that the document that you have is for the company you are actually paying. There are probably several companies with very similar names.

0 Votes

All Forum Posts by: Stephen Chittenden

Stephen Chittenden has started 14 posts and replied 304 times.

Post: Potential law suit

Post: Is this considered being a "Tenant", legally? (California)

Post: Rehab and Flip - BaltimoreArea /Maryland

Post: Investing for ROI and not COC

Post: 1st success as an investor

Post: " LATE FEES " ??????

Post: My first investment property (A diary - IN PROGRESS)

Post: My first investment property (A diary - IN PROGRESS)

Post: One down. (First Deal Closed)

Post: Who do you issue 1099s to?