All Forum Posts by: Todd Van Etten

My PM says her forte is managing group homes and has suggested that when my tenant's lease is up on a single family rental to convert the house (3 bed, 1 ba) into a 'group home'. It sounds a little like a house hack. Each tenant is supposed to be associated with a social worker. There's a full time staff member on the premises. This configuration would definitely increase the cash flow. The one big down side is that as the landlord I have to furnish the house. If anyone has any experience with this I would greatly appreciate your input.  

Dear Tasha, please make sure your PM is well vetted. I bought a rental from an investor and a PM was already in place.  I "assumed' the PM was good, but turned out to be the contrary. You really need a good PM especially if you're out of state, along with a good agent or someone who can keep your PM in check.

I'm having similar troubles in a SFR and I'm trying to decide if I should hang on, 1031 exchange, or cut and run.

You'll want to talk to your accountant about the cost of capital gains. There's both federal and state capital gains tax. Federal is 15%, and is different for each state. A quick search says capital gains in CO is 4.63%. You can run the numbers using both rates. Make sure you've got everything lined up ahead of time if you're going to exchange because the deadline will come up fast. My mentor once did an exchange and the company holding her money actually ran off with her money--no kidding. So it's also good to vet them as well.

Beekeeping, running, jet ski, gardening, DIY home improvements, scuba, sailing. I'm enjoying this thread!

Bought an out of state single family rental with a tenant in place from an investor who needed the sale money for another venture. Since he had bought it less than a year ago and had recently done upgrades, I didn't have an inspection. However had difficulty with the tenants allowing the appraiser in. The tenant's boyfriend moved out and she couldn't make rent. Offered keys for cash. Found out from the property manager the tenants were drug addicts. First red flag: when they asked to have a light bulb changed. The tenant locked the boyfriend out of the house and he kicked both exterior doors in, breaking apart the door jambs. The balcony is only decorative. The door to the balcony had been locked for safety to keep the tenants off the balcony. The tenants took apart the door hardware to access the balcony. Now the balcony needs repair. as well as new hardware for the door. They painted the fireplace. They removed all the caulking around the bathtub (like what??). They stained the front porch, had a dog when pets weren't allowed. They broke the garage door, and left a pile of junk in the garage that I have to pay the city to remove.  I'm still in the midst of repairs, but luckily I didn't have to give cash for keys and was able to use that money towards rehab. Lesson is inheriting tenants.

Investment Info:

Single-family residence buy & hold investment in Elyria.

Purchase price: $89,000
Cash invested: $23,000

Single family residence, 3 bed, 1 bath with a detached 1 car garage. Renovated kitchen by previous investor.

How did you finance this deal?

20% down, 30 year fixed.

Lessons learned? Challenges?

That it's very difficult to get funding approved during the pandemic. Over three months in escrow while the underwriters kept checking my paystubs and bank statements up to the very end to make sure I was still working under the threat of the pandemic.

Dear Sasha, What helped me understand building code was the book by Francis DK Ching and Steven R Windkel,"Building Codes Illustrated: A Guide to Understanding the 2018 International Building Code". The book is in its sixth edition. I'm a visual learner and this book graphically illustrates and somewhat simplifies the code's language.