[carogers86]

Originally Posted by O-cha

Rental income is taxed, so no you wont be making a profit, you'll be covering your mortgage.

Also keep in mind there are numerous laws that your house ISN'T going to meet to be able to legally rent.

I have a 3200sqft house with 3 bedrooms, I can't imagine how small the bedrooms are @5.

I used to date a girl who rented a room in a similar sized house and similar sized rooms that I have seen and she said she was paying $550 plus utilities. I'm going to come in at $450/$500 plus utilities. Rooms are big enough for queen bed and 1-2 dressers each. Nothing more.

[carogers86]

Originally Posted by Sniz

and that is huge, I still have a bad taste in my mouth from the 'old' days

Sniz, the house is bank owned with renters occupying the house at the moment. Bank is asking $247,000. From outside house looks great (yard is kept up with nice paint) What "low ball" offer is reasonable?

[persian54]

Originally Posted by carogers86

2 out of the four renters are people I know. My best friend since pre school and his gf want to rent out a room. They even mentioned paying double the rent pending my best friend gets this new job so he can have an office and his own bathroom.

The other renter will be my gf's cousin. She is really mellow. I am trying to get one more friend in. That would be ideal. The house has a 3 car garage and the driveway is wide enough for 4 cars. Pretty sure everyone will have a spot.

Before considering buying this house I had to exercise EXTREME financial discipline to pay off huge credit card debt (totally crazy story) and work hard enough to afford double the house payment in a worst case scenario. Even if my renters flake out, I have enough to comfortably pay the bills.

I live in an apartment complex that seems to get crappier by the week (think gardnersn using leaf blowers in a covered parking lot and blowing s rock into your windshield) and costs $1000 a month. To give up some personal space to have a $0 a month housing expense...... I can start modding my car like MAD.

well you shouldn't just straight go to modding...

Living with friends isn't bad... but money between friends usually doesn't turn out too great... but you know them better than we do

[Pinarello Rider]

Originally Posted by persian54

well you shouldn't just straight go to modding...

Living with friends isn't bad... but money between friends usually doesn't turn out too great... but you know them better than we do

I'm on the "exercise extreme caution" side here. OP - you can be a landlord, millions of Americans do it now. Just be really careful, and take nothing for granted. "Friends" mean well most of the time, but you know what happens when you try to organize something that requires other people to make an effort to fulfill their end of the deal. They usually back out leaving you holding the bill. Don't take ANYTHING for granted, and have a few backup plans. If you can afford the house on your own, then good. Just don't forget that owning a home is a fucking money pit. Avoid PMI like the plague - IMO that is the biggest scam going. You are paying the bank to insure them on money that they are lending to you. ON TOP of the interest that you are paying them for said loan. FWIW, my wife and I SPECIFICALLY held off on buying our first house so we didn't have to pay that nonsense. It's worked out well for us so far.

Houses are needful things, and if $1780 is the max you can spend, and that is tight, be concerned. You still need utilities, maintenance (paying renters won't put up with the same things you might let go for a while), and repairs. Renters, even friends, will beat the tar out of your stuff. Friends will also expect favors and more leeway than you might be able to give if you are counting on the money to pay off your bills.

Just be careful is all, and don't count on your friends to make your investment work. Unless there is something in it for them. It doesn't sound like there is. You are going to go from friend to landlord. Good luck with that!

[ABQ325i]

Originally Posted by carogers86

Sniz, the house is bank owned with renters occupying the house at the moment. Bank is asking $247,000. From outside house looks great (yard is kept up with nice paint) What "low ball" offer is reasonable?

This is why you need a local Realtor, someone who knows the market and has access to the local MLS. A CMA needs to be done and other data needs to be collected, how long it has been on the market and how much is owed.

Remember that the bank or banks representative have no personal attachments to the property and there will be one person responsible for making a decision on that property. All that person cares about is the bottom line and reducing the banks loss as much as they can.

Also take into consideration that the property is occupied and the bank is receiving some kind of return from it.

I personally would go with a separate Realtor than the listing agent. Even if dual agency is permitted in your state I would keep away from it. That is a completely different debate but my feelings are pretty strong on it.

[MisterSkiMask]

Originally Posted by carogers86

Sniz, the house is bank owned with renters occupying the house at the moment. Bank is asking $247,000. From outside house looks great (yard is kept up with nice paint) What "low ball" offer is reasonable?

Look for comps, that is what the bank is going to do

[Sniz]

Bingo, very well said

Originally Posted by ABQ325i

This is why you need a local Realtor, someone who knows the market and has access to the local MLS. A CMA needs to be done and other data needs to be collected, how long it has been on the market and how much is owed.

Remember that the bank or banks representative have no personal attachments to the property and there will be one person responsible for making a decision on that property. All that person cares about is the bottom line and reducing the banks loss as much as they can.

Also take into consideration that the property is occupied and the bank is receiving some kind of return from it.

I personally would go with a separate Realtor than the listing agent. Even if dual agency is permitted in your state I would keep away from it. That is a completely different debate but my feelings are pretty strong on it.

[pwrdbynel]

You said there are renters in there? Be very careful. After you close escrow you may have to evict the tenants. Read the counter offer carefully. REOs always send addendums to the purchase contract, which releases them from all kinds of responsibilities, including tenant eviction. One more thing banks are not always the best bet for financing. They tend to have harder guidelines. Also with the new L/O comp plan I would suggest you ask for closing cost. I can explain here but would take forever. PM me and I can explain why. Also renters can be a good idea, but 4 is a bad idea. Tenant laws in California suck when your a landlord. It just take one room mate to screw up and it can ruin everything. Also if you use a broker make sure he has an active NMLS license. Other than that happy house hunting.

[xquisit]

this is an insightful thread

[O-cha]

Originally Posted by carogers86

Sniz, the house is bank owned with renters occupying the house at the moment. Bank is asking $247,000. From outside house looks great (yard is kept up with nice paint) What "low ball" offer is reasonable?

Then you can't move in for 3 months after you buy it, lol.

[ejheverest]

Landlords don't have the power anymore. One bad tenant and your whole year will be destroyed as far as income. Last year I had to hire a lawyer after giving my tenant a demand for rent and eviction notice 4 times. She decided to not follow the notice, change the locks without my permission, not pay me any rent and file for disability since she complained about being too stressed out to have a job. The state gave her 2k a month for disability, free utilities, heat, electricity, and even food stamps. After 6 months in lost rental income, over 5k in lawyer fees since the only way to physically get her out was to get a notice signed from the judge and show up with the sherriff for the eviction. So it was a 12k loss, plus she filed bankrupt so I can never take her to court to recoup any expenses. BE VERY CAREFUL, MY TENANT was chosen by a real estate company and a back ground check, credit report, rental history, employment form was done. 4 tenants in a single family home would be insane!! I could see 4 families in a 4 unit building but, not a house. It was HELL. I now make all decisions on all our rental properties and learned from the past.

[persian54]

Originally Posted by ejheverest

Landlords don't have the power anymore. One bad tenant and your whole year will be destroyed as far as income. Last year I had to hire a lawyer after giving my tenant a demand for rent and eviction notice 4 times. She decided to not follow the notice, change the locks without my permission, not pay me any rent and file for disability since she complained about being too stressed out to have a job. The state gave her 2k a month for disability, free utilities, heat, electricity, and even food stamps. After 6 months in lost rental income, over 5k in lawyer fees since the only way to physically get her out was to get a notice signed from the judge and show up with the sherriff for the eviction. So it was a 12k loss, plus she filed bankrupt so I can never take her to court to recoup any expenses. BE VERY CAREFUL, MY TENANT was chosen by a real estate company and a back ground check, credit report, rental history, employment form was done. 4 tenants in a single family home would be insane!! I could see 4 families in a 4 unit building but, not a house. It was HELL. I now make all decisions on all our rental properties and learned from the past.

Yeah I've heard about a lot of this happening as my extended family owns several apt complexes in LA

One of our family friends had a similar situation... but got fed up and took the matter into his own hands.
Won't get into too many details, but the tenant basically had a choice of leave+pay what he owed or never wake up....

Ridiculous how the government will allow people to live rent free...
I don't know what I would personally do... I doubt I'd do the 'never wake up' method as that's too extreme for me...

[O-cha]

Originally Posted by ejheverest

Landlords don't have the power anymore. One bad tenant and your whole year will be destroyed as far as income. Last year I had to hire a lawyer after giving my tenant a demand for rent and eviction notice 4 times. She decided to not follow the notice, change the locks without my permission, not pay me any rent and file for disability since she complained about being too stressed out to have a job. The state gave her 2k a month for disability, free utilities, heat, electricity, and even food stamps. After 6 months in lost rental income, over 5k in lawyer fees since the only way to physically get her out was to get a notice signed from the judge and show up with the sherriff for the eviction. So it was a 12k loss, plus she filed bankrupt so I can never take her to court to recoup any expenses. BE VERY CAREFUL, MY TENANT was chosen by a real estate company and a back ground check, credit report, rental history, employment form was done. 4 tenants in a single family home would be insane!! I could see 4 families in a 4 unit building but, not a house. It was HELL. I now make all decisions on all our rental properties and learned from the past.

Eviction for failure to pay is pretty easy, sounds like your state or your lawyer sucks. IDK why you didnt get the court order and go with the sheriff, you can do that in something like a week here.

[ABQ325i]

Nothing is ever simple, plus it varies from state to state. What state gives you the freedom of going through the court system, obtaining an eviction warrant plus having the Sheriffs office schedule an eviction all within 7 days of not paying rent?

[O-cha]

Originally Posted by ABQ325i

Nothing is ever simple, plus it varies from state to state. What state gives you the freedom of going through the court system, obtaining an eviction warrant plus having the Sheriffs office schedule an eviction all within 7 days of not paying rent?

No, I meant a week from when they don't pay, but it's actually 3 days here from notice to when you can terminate their lease and begin eviction. Worst case actual eviction takes a month.

6 months and your attorneys a fing idiot.

And unless you have tons of properties, letting a management company choose your tenant is also retarded. They just want someone in so they get their money, they aren't going to take a second consideration about if they will be clean or good tenants, just if they can pay.

[mtla4]

Honestly I wouldn't live with roomates. Get a small cheap condo sell it back in a few years.

[NBRider88]

Originally Posted by O-cha

No, I meant a week from when they don't pay, but it's actually 3 days here from notice to when you can terminate their lease and begin eviction. Worst case actual eviction takes a month.

6 months and your attorneys a fing idiot.

And unless you have tons of properties, letting a management company choose your tenant is also retarded. They just want someone in so they get their money, they aren't going to take a second consideration about if they will be clean or good tenants, just if they can pay.

In California, the process is a bit longer. First is the 3 day Notice to pay or quit. You serve this to the tenant. If no response, you file an unlawful detainer. That can take anywhere from 3-6 weeks. Depending on how busy the court is any if the tenant post any objection. Then you go to court, and if you are awarded the unlawful detainer, you go to see the Sheriff. He goes out and post another sign, giving the tenants 5 days to leave the property. If they have not moved out by the 5 days, they will be physically moved out.

Assuming they don't file BK or give any objections, this process typically takes 45-60 days.

[number335]

Whats the competition like in your area? Here in Southern Cal, I was in the market for a $250 - $300k condo and my search lasted over a year because of the demand. And this was for a condo! Majority of the places were short sales and when there was a bank owned property, those were swept up immediately. I even overbid on all my offers because of the competition. I eventually ended up purchasing a new construction cuz the used home market was a pain in the azz to deal with.

My suggestion, your first home doesn't need to be a 5 bedroom house. Purchase a smaller place you can afford without maxing out your budget. Sounds like homes are already priced low where you live, so if you find a place you love, don't low-ball, cuz you prob won't get it...unless there are no other bids on the place. Roommates are a pain in that azz...and even more of a pain in the azz when you don't want them to jack up your property and you have to collect rent from them.

[O-cha]

Originally Posted by NBRider88

In California, the process is a bit longer. First is the 3 day Notice to pay or quit. You serve this to the tenant. If no response, you file an unlawful detainer. That can take anywhere from 3-6 weeks. Depending on how busy the court is any if the tenant post any objection. Then you go to court, and if you are awarded the unlawful detainer, you go to see the Sheriff. He goes out and post another sign, giving the tenants 5 days to leave the property. If they have not moved out by the 5 days, they will be physically moved out.

Assuming they don't file BK or give any objections, this process typically takes 45-60 days.

Wow that is really crappy. After judgment they only get 24 hours here. And to even defend themselves they have to escrow the rent. Do you guys not get court costs back either?

[NBRider88]

Originally Posted by O-cha

Wow that is really crappy. After judgment they only get 24 hours here. And to even defend themselves they have to escrow the rent. Do you guys not get court costs back either?

It depends, if you have an agreement that calls for attorney fees then yes. If you don't you have to ask the court to have the tenants to pay it. The judge may or may not award it, depending on the situation.

[O-cha]

Originally Posted by NBRider88

It depends, if you have an agreement that calls for attorney fees then yes. If you don't you have to ask the court to have the tenants to pay it. The judge may or may not award it, depending on the situation.

Fees don't have to be in the lease here, you get them from the loser if you acted in good faith. Cali sucks....

[NBRider88]

Originally Posted by O-cha

Fees don't have to be in the lease here, you get them from the loser if you acted in good faith. Cali sucks....

Yup, Cali is definitely pro renter and not landlord. Sucks compared to other states. You are in FL right? Seems like a quick process there, which i'm sure is nice.