All Forum Posts by: Cynthia Hartley

A bank will not offer a HELOC on an investment property. HELOCs can only be obtained on a primary residence. You may want to consider a 203K loan, which provides financing for the purchase and any needed repairs. Not all banks offer 203K loans, you will want to call around to several banks, ideally community banks and credit unions, to find one that will suit your needs.

I suggest that you go to the city's zoning office to find out if the structures on the property conform to the zoning regulations in that area, i.e. does the zoning allow for 4 dwelling units (2 SHFs and 2 efficiencies). You may then want to reach out to the planning or survey office to see if their records show that there are 4 dwelling units on that property. You should be able to order a plat of the property that will identify the boundary of the property and all structures recorded on the property. Finally, did you take a look at the electric panels, hot water heaters, boilers, HVAC? Were they new? There should be a sticker indicating the year they were installed. If so, you will want to visit the permitting office to see what permits were pulled for that property. While you are there, get a list of what type of work requires permits and verify those permits were pulled. Some cities may require a permit to install windows, whereas other cities do not. Check what permits are required for Naples, FL.

I think you are putting the cart before the horse here. REI is not easy and investing out of state, on a rehab no less, does not make it easier. First, how will you pay for the house? Do you really want to use all of your savings to buy a house? Being self employed, it will be difficult to find a bank that will offer financing to someone without a W2.Where will you get money to do the renovations? If you were to find a bank that would provide financing, a credit score of 670 - 700 is not a great score. You will not get the best interest rates. The best interest rates go to those with a credit score of 750 and above. I would suggest that you spend the next several months listening to the BP podcasts; reading through forums to understand the different approaches; and use your income to pay down your debt, increase your credit score, and increase your savings. With regard to getting a feel for how much a rehab should costs, there are plenty of forum posts on that, as well as J Scott's book on estimating rehab costs. Finally, join your local REIA. You can look up any local REIAs under the networking tab above. Good luck.

@Tom Gimer. I was chatting with my sister and she said that when she did a quit claim for her properties in NY, the lawyer indicated the quit claim was in consideration of $1, which eliminated the need for her to pay 2.2% recordation and transfer fees. Isn't is possible to do the same thing in DC?

I purchased a SFH as a rental in my name. After extensive renovation - which will be presented in another post at another time - I got the house rented and now wanted to put the property into an LLC. However, I could not find on the forum posts any guidance on how to do a quit claim deed. After a fair amount of research and phone calls, I figured it out and wanted to post it here in case others might find this information useful. As a disclaimer, I am not a lawyer. I suggest that you have a lawyer review your documents. I am simply providing this information as an account of what steps I took with the hope that it may benefit others.

First, I went to Deeds.com and ordered quit claim documents for Washington, DC. It cost $19.95 and was available immediately for download. You get a bunch of forms for $19.95, but the only ones that were relevant for me were the Quit Claim Deed template, the Quit Claim Deed Instructions, the Quit Claim Deed Sample, and the Recordation and Tax Transfer Form. You may need to use other forms depending on your particular circumstance. Note that there is a section of the Quit Claim Deed template that asks for "book number / page number". This is no longer used by the DC Recorder of Deeds Office. They use a 10 digit document number that is found on your original recorded deed. The 10 digit number begins with the year the you purchased the house. If you don't have a copy of your deed, contact your title company or order one from the DC Recorder of Deeds office.

The Recordation and Tax Transfer Form is also known as  and can be found at https://otr.cfo.dc.gov. Click on Recorder of Deeds. Go to Form Center and click on ROD Tax Forms Page 1. Form FP 7/C is the form I needed. Instructions are provided on how to complete the form, including how to calculate the recordation and tax fees. 

Both the Quit Claim Deed and the Recordation of Tax Transfer Form need to be notarized. The notarized documents can be mailed or delivered in person to 1101 4th St SW 5th Floor Suite 500 West between the hours of 8:30 - 3:00. In addition to the recordation and tax fees, one must also pay a recording fee of $31.50. 

I hope you find this useful.

Things just do not add up for me. I don't understand how he was in the home and not realize that there is a party going on in his own home until more than 100 people are in the house and the place is trashed. I suspect that he gave consent to have a party, which is why he stayed in his room, but did not realize that things were out of control until it was too late. I am an AirBnB host and live in my house. I know when my guests come and go and certainly would know if there is a party going on. Moreover, I find it difficult to believe a guest would book a house to have a party, knowing that the owner is in the house, without the owner's consent. 

As a homeowner/investor, this is my 2 cents. I recently finished a full house rehab. None of my personal possessions were in the house, only materials and supplies. However, during the renovation process some items went missing; nothing super expensive, but on a full house rehab every penny counts. Owners need to take responsibility as well. Some lessons learned for future projects...

• I will give access to the lockbox to the PM and only the PM. He/She is accountable and responsible. If they give access to others, the PM is still accountable. I expect the PM to be on the site first thing in the morning to ensure the subs show up, and at the end of the day to ensure tasks were completed properly and on time. Subsequently, the PM should lock and unlock the house. 
• I will rent a storage container to be positioned in the backyard and place all items that are not going to be used immediately in the storage container. If an item is purchased by the PM or a sub, the PM or sub is responsible for that item. If I purchase an item, I will have it on a materials list, and I will sign off that I provided that item and the PM will sign off that he received that item. He is now accountable for said materials. 
• I will have a security camera in the house to monitor if anyone attempts to break in during the night. It may also help to identify if any items walk away during the work hours. 

On future projects you may want to have a preliminary conversation with the PM and/or homeowner to establish expectations regarding personal property. It is always good to CYA.

Your advice makes sense @Russ Draper and @Ned Carey. I will keep the properties in my name while I go through the design and permitting process. As I look for financing, I will then see what my options are and the requirements. Thank you for your guidance.

Hi Maggie,

You should definitely get a C of O to protect yourself from future tenants suing you. It is not that they may not try to sue you, rather that if you are not "legal" in DC, you will have no legal recourse. Don't forget to also get a business license. The notion that others are not getting a C of O means that they are leaving themselves open to massive lawsuit and loss of revenue.

That said, renting an accessory dwelling unit in DC - in the long term - should provide you with a return on your investment, if you separate the electrical and gas. No need to sub-meter water - it is not possible to have separate meters. Just calculate 1/3 vs 2/3 or any allocation that is deemed fair in the rental situation.

I just converted a 3 br/1 ba into a 3 br/1.5 ba with a 1 br/1 ba accessory basement apartment. It was a full gut job, but in the long term, it is worth it. 

Hi All,

I have two adjacent lots in Baltimore City on which I plan to build two two-unit dwellings i.e. four units in total. For financing purposes - mind you I am looking 18 - 24 months out to start construction, so I am planning ahead - can you offer the pros and cons of putting the title in my name vs in an LLC for the immediate term? Are the chances of me obtaining construction finance options better if the properties are in my name or in an LLC? Thanks for any thoughts and guidance. Cynthia