All Forum Posts by: Suzie B.

You will first need to look into zoning. We decided to turn a large garage into two units and came across an owner across the street who tried to get our request for rezoning denied. In the end we were able to get what we wanted, but it was a headache.

As far as the actual work involved... you will need to find out what kinds of permits you need, etc. If you aren't going to do the work yourself, get a couple of reputable contractors opinions on pricing in the area.

I feel like splitting utilities is a must! It takes the uncertainty out of your bills every month when your tenants pay their own. It will cost you more up front to separate them, but I would have it done.

You may also want to do some market research to see if it will benefit you to do the project. Are there other similar units in the area? Do they rent well?

It seems pretty ambitious to have 50 properties paid off free and clear that quickly. However, it really depends on what kinds & price ranges of properties you are looking at too. The lower the value, the easier to pay off quickly... provided you can keep the majority of them rented with good cash flow.

We have considered paying ours down in snowball fashion once we have all the remodeling/repair work done that we need to finish on our properties. We may put that on hold and acquire a few more properties first while interest rates are so low, and before housing prices here start to climb too quickly. We've already seen an upswing and feel the push to get another property or two before we pay higher costs. We tend to take a little more time than many here at finding the right property for us and getting established with that as a rental before we jump on the next one.

Everyone has what works for them. Many here love the concept of leverage. While I agree you earn more $$ with less of your own invested, there is some comfort in having a property paid for.

If it's just cosmetic and you feel the need to update to your own tastes, I would hold off until you need to do the work.. Unless you've already talked to the tenant about the possibility. If so, talk to them again about how they feel about work being done while they are living there. It may depend on how extensive the work is to them... some may not care to live in drywall dust.

Also, you could potentially do the work while they are away sometime for vacation, etc. I would be sure to be there at all times unless I completely trusted the contractors working for me. I wouldn't want to be liable for any of their things coming up missing.

Good for you in having a plan to get started. Too many college students I went to school with had more fun with their college loans and would have had nothing to do with "saving".

Are you going into this jointly with your family, or are they loaning you money to get started? Be sure you have it all written out in contract form before you get started so that there is no confusion as to everyone's intent. It's hard sometimes to do joint ventures with family when people have different opinions or when things are misunderstood. You don't want to fight about things with those you love the most.

I agree that a duplex is a great way to start, but it's really up to your market and what your desires are as an investor. You might find that if you have help, it might serve you well to invest sooner than later due to the current market situation. In 4 years it's hard to say what the interest rates will be and where the housing market will be. If you do invest soon, be sure you have researched property managers in the area so that you know you will have someone you can trust to manage your purchase should you have to move for a job after college.

You might find if you don't want a multiplex, that a small fixer upper that you don't might doing some sweat equity in could be a good purchase and later a rental for you. If you live there for the 2 years prior to a sale, you are safe from paying taxes on the gain. Might be a good way to earn some capital during college to make a purchase wherever you land after college.

I agree... you should be able to see the inside of the property.

Keep in mind that the tenants might be wary of an ownership change for fear of a bad landlord or their rent going up. They don't always cooperate like they should, but if the owner wants a good sale he needs to be sure his tenants let you see what you are buying. If you can't get it, there is a chance that you don't want to see it... If you know what I mean.

You would also have to put more money down if it was purchased as an investment property.

Getting into the real estate and rental business is great... good money if you do it well.

If you do go with a $180k home, I would think you would be stretching yourselves pretty thin w/ your income... Out of my comfort zone anyway. I would be sure to have a pretty sizable savings set aside to pay any repairs and vacancy fees before I bought the second home.

I think I would look at homes in the neighborhoods you feel safe in and see if I could find a smaller home, or one in need of repairs that came in at a lower price. There can be a lot of value in sweat equity as well if you are will to live in some dust. That way you will have less money tied to your future rental, making it easier to pay down when/if you want to.

Like John mentioned, if your plan is to rent out the home in about two years, you should be looking first for a good investment/rental potential ahead of your "wants"... They are two different properties.

The rentals we own are much, much less in value than the home we chose to live in. Why? Because we can draw good rent on them and pay them back faster if we choose to. Higher priced rentals, in my opinion, aren't worth the added risk, cost more to maintain, and I would rather have 4 50,000 loans than 1 100,000 loan. I don't know about your area, but around here I would get more cash flow with the multiple properties.

Also, as Brook mentioned, duplexes are a good way to start if you know you want to get into rentals.

Spend some time reading the forums and get a feel for what others are doing. There is a lot of insight to be gained here. Let us know what you decide to do.

We used to have a tenant who would complain or ask for repairs every time she paid her rent. We took care of her concerns promptly and the requests slowed.

I can see some tenants doing what some of you mentioned and trying to hold their rent due to a minor repair, or to avoid late fees. Never understood the one we had though.

Maybe a combination would be a good option. I think shelves are a nice new trend, but I myself want a place to store some things up and hidden out of the way... Plus cabinets hold so much more

In addition to what the others have said....

If your purchase price shows differently than what you actually paid, you will be paying the price when you sell it. You will be stuck paying the gains on that $13,500 (assuming that it appreciates).

Sounds to me that he is only looking out for his wallet and cares nothing about yours. I would re-negotiate if you are still interested and let him know you understand the implications in not reporting total purchase price has on you. It's not worth the financial loss at sale, and the legal risk if he won't do it correctly.