Investing in 2/3 Multifamily Townhouse

>We will be much pickier going forward with firmer income requirements and good credit scores.
Also require proof of prior year rent payments at their previous apartment.

lgwlcvqt

in General Discussion 9 years and 2 months ago

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maxwellimus | 9 years and 2 months ago

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Hi,

I am looking to purchase a multifamily house and live in one of the units while renting out the other. During my time in say Unit A, I will renovate it and then move into Unit B. I will renovate Unit B and then either stay there or move back to Unit A, or just go somewhere else all together. This plan is a 5-10 year plan.

I’m new to this and would love to hear other people’s experiences with being a landlord and the ups and downs of living in the multifamily with your tenant.

I’m a mechanical engineer/design by Trade so I am very well versed in the construction industry and mechanical system in buildings. I also own currently so I understand the roles of ownership.

lgwlcvqt | 9 years and 2 months ago

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First get a property, then ask away. You’re jumping the gun

maxwellimus | 9 years and 2 months ago

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Mozee, I am asking a question to anticipate the challenges before finalizing any deal. I dont see how my question is invalid from the fact that I have yet closed on a multifamily property.

slopefarm | 9 years and 2 months ago

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I agree with mozee. We don;t know enough about what you are buying and what you are planning, to answer the question. How much renovation do you need, how much do you need the rental income to afford the house you want, etc. ? If you have this little idea about the parameters of your plan, you are not ready to do it. I would view rental income as a means to afford a house that you want to live in that you would otherwise perhaps not quite afford — size, neighborhood, etc. Helps with carrying a mortgage. Don’t cut it too close., if course. I would not view rental income in a 2-fam as an investment strategy at all. If you are talking about reno, hold and then flip, you are asking for a prediction about where the market will be in 5-10 years, and then, of course, will you also be buying in that market?

maxwellimus | 9 years and 2 months ago

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Slope, thanks. I do have numbers all calculated. I know my max mortgage, I know my utility expenses, insurance, maintenance, taxes, etc. The renovation required will be dependent on what property I can get – I have no idea the full extent but I do know the bare minimums.

I think everyone is missing my question, and that is – what are people’s experiences with being a landlord and the ups and downs of living in the multifamily with your tenant.

cmu | 9 years and 2 months ago

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I’m ‘missing the question’ because it’s not susceptible to a simple answer, unlike the numbers, mechanical stuff, permits, etc which are tangible. Everyone has different experiences and a lot depends on your temperament, your ability to find good tenants (which is linked to previous and to how much you’re charging relative to “market rent,”) and luck. How about noise tolerance if your tenants live above you? Are you going to force a ridiculously complicated lease and start on the wrong foot (one of my pet peeves)? etc.

All I can say for my own experience is that I wasted no time on metaphysical issues because I needed the extra money to finagle my house. And then I needed to continue or pay bigly taxes when I switched. I’ve had little or no problems in 25+ years and maybe 6-7 tenants. It’s also my retirement.

donhome | 9 years and 2 months ago

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i’ll bite. I live in a 7 unit building that I have owned since 1999. Co living with tenants has been easy as I maintain a warm and well kept building. I think the tenants appreciate knowing their landlord and that someone is there to respond to their needs. Never had to go to landlord/tenant court or had an altercation which could change sentiments drastically ( I imagine).

workisfun | 9 years and 2 months ago

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I’ve owned and lived in a two-fam for almost 3 years. We have 4 tenants in a 3-bdrm above us. They’re wonderful and easy tenants. We got extremely lucky and hope they never leave. Before we bought, we were dreaming of tenants who would subsidize our mortgage, and pay more and more as the years pass. That would be great in reality, but we have the sense that finding and keeping good tenants is more important than an extra $600 or $1000 per year in income. Sort of a joke – but we were advised that medical residents are the best tenants. They are almost never home, don’t cook much or entertain much. They’re professional and pay on time. And, after 4-6 years, they leave and you can return to market rate. To your other issue, my sense is renovating one floor at a time is terribly inefficient and problematic. You say you know systems, so you must understand this. Also, from a fiscal, design, disruption perspective, it’s probably not a great idea, if avoidable.

chemosphere | 9 years and 2 months ago

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You’re going to get drywall dust on everything you own.

anne_nyc | 9 years and 2 months ago

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We have owned a 2 family for just over 10 years. We just hit our first major issue. We have a month to month tenant who refuses to leave. We are now moving forward with a holdover proceeding. It stinks. We have always tried to be responsive, friendly landlords. Feeling a little burned at the moment. We will be much pickier going forward with firmer income requirements and good credit scores. We also are going to be better about regular rent increases. The apartment will need work before we return it to the market but we do plan to rent it out again.