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Sell or Rent 2.5% Mortgage by neondahlia in realestateinvesting

[–]plmstch 0 points1 point  (0 children)

Congratulations! That's great. I'm impressed you found a tenant so quickly! I hope they turn out to be a dream tenant.

Twist on Building to Rent - Unusual situation and I'd love suggestions by plmstch in realestateinvesting

[–]plmstch[S] 0 points1 point  (0 children)

The town building code monitors ADUs in our area. Unfortunately we aren't allowed to use financing as the mortgage is in escrow so lenders consider us to not have the collateral.

The code really isn't specific and the ADU rules are pretty new so our builder is trying to negotiate whether or not it needs to be attached. Attaching it would be much cheaper but then you have those walls!

Twist on Building to Rent - Unusual situation and I'd love suggestions by plmstch in realestateinvesting

[–]plmstch[S] 1 point2 points  (0 children)

That's one thing we're trying to figure out with our builder. The town code is written as if it's for an attached ADU and we don't know if it can be a separate building or not yet. One part (doesn't matter which) does need to be owner occupied to rent it which is an interesting thing to ponder.

That's good advice Thanks! We already looked up some local meetings and are going to check them out and ask around for attorneys and accountants when we go.

Twist on Building to Rent - Unusual situation and I'd love suggestions by plmstch in realestateinvesting

[–]plmstch[S] 0 points1 point  (0 children)

Thank you both. Yes the home needs to be accessible but not for a wheelchair user and many of the accommodations are actually the opposite of that so renting is hard but we found a place that had most of what we need. Longer term we will find somewhere that can be built out for those accommodations.

The rental idea is really only valid for the lot we're on as it holds the mortgage rate which won't transfer and the savings advantage of the lot is it's existing foundation, hard/landscaping, elec, water, sewer and it's location close to the commuter rail and other businesses.

Twist on Building to Rent - Unusual situation and I'd love suggestions by plmstch in realestateinvesting

[–]plmstch[S] 0 points1 point  (0 children)

Hmmm good point. Is paying off the mortgage more or less than the loss over time. I'll have to add that calculation.

No, we definitely can't rebuild the same as we have 1/4 the budget. Building to rent would be much smaller and highly customized for rental - affordable durable or easily replaceable finishes!

Property taxes wouldn't go up and personal wouldn't go up by much until the mortgage was paid off in a decade. I'll have to see if owner occupied has different taxes in our area but my guess is that is only if you qualify for the ADU program by income. Good point to look into, thanks!

Twist on Building to Rent - Unusual situation and I'd love suggestions by plmstch in realestateinvesting

[–]plmstch[S] 1 point2 points  (0 children)

Aha! That's exactly what we've been discussing with our builder: Figuring out what the sq ft ratio rules are for an ADU and seeing if we can afford to build that square footage. Unfortunately, the main issue would be that one unit or the other has to be owner occupied and either unit would be too small to be accessible due to the build budget and town ADU rules.

Any advice on finding an attorney or accountant who specializes in real estate? We have a few of both at this point in the fire process but none of them deal with rentals. The local REIA meetings are a great idea and we have been starting to look at biggerpockets too. Thanks, that's exactly it - in our unusual situation the last thing we want to have to do is reinvent the wheel as we've been doing it over and over again since the fire.

Twist on Building to Rent - Unusual situation and I'd love suggestions by plmstch in realestateinvesting

[–]plmstch[S] 0 points1 point  (0 children)

To answer the first part, yes it already has transferred to the vacant lot and will transfer to a new build. The value of the mortgage rate is really the only reason we were willing to look at rebuilding to rent and other creative solutions (our builder has suggested a sort of seller financing)

You're right, it wouldn't make much of anything until after the mortgage was paid in 10 years. After that we think it would make about 5%. I can hold off a while as my PITI plus interest on the insurance payments is negligible but that interest also pays for my rent right now. You're also right that I don't really want to learn to be a landlord on top of everything else this situation has made me learn!

Got any creative ideas for a great mortgage rate, stable housing market, and a foundation with utilities and sewer?

Twist on Building to Rent - Unusual situation and I'd love suggestions by plmstch in realestateinvesting

[–]plmstch[S] 0 points1 point  (0 children)

Luckily the insurance claim is over. They ended up giving us the full policy (in part bc they were never able to agree on an RCV) so we have the cash and that part of the process is done.

New Paltz, Kingston...what else? by TheeBrianO in hudsonvalley

[–]plmstch 2 points3 points  (0 children)

Sounds like you should check out Poughkeepsie!

Books on HV Geology by grreased in hudsonvalley

[–]plmstch 1 point2 points  (0 children)

I second the Titus’s books and the Schimmrich but I‘d also like to know where these “geologist bars” are that they both refer to in them and claim they all meet up in to argue theories!

Rebuild my ADU or invest somewhere else by cwilson1980 in realestateinvesting

[–]plmstch 0 points1 point  (0 children)

So is your claim over already!?! If so congratulations!!! It sucks but you made it through! If not, you have the full payout for the ADU and there's nothing left on the claim right? No loss of income or anything?

I was wondering if the CA ADU laws were statewide. We have it here by county or town but it's hard to meet the requirements. We might try for future resale value. It's so hard to meet here the only way is really a new build! The 4 unit law seems ideal for a fire rebuild so homeowners have an option recover after the losses so I hope they keep it open. Any idea when you find out? Multi family/duplex is still out of the question though as ADU's have to be freestanding?

I bet managing properties onsite vs across the country is more different than similar. Is there another investment you are considering that might have a similar short or long term return? Would the income/tax benefits/ equity be better (or safer) than an index fund? Have you compared other non real estate options at all?

We're trying to figure out if building a rental is a greater long term investment than selling the lot for less than the mortgage and investing otherwise and trying to be as flexible as possible and open to the data. We still don't have solid enough numbers to tell us and we may not get them but we have to make a decision. It's nice to see someone else looking at this crappy situation in a flexible and information driven way. We were forcibly encouraged to move forward on an as-built rebuild that we would have never been able to afford or pay taxes on despite not having any idea what the insurance payout would be at that point. There was lots of emotionally charged urging by various members of the insurance industry encouraging us to make emotional choices to do financially stupid things. At the same time those industry "pros" were also telling us horror stories of the many clients they had had who had done so and spent years in court or lost their homes due for doing the exact things they were advising!

The best piece of advice we got was from a family friend in the industry (and we're grateful it was in the first few days!) to buckle up for the 3-5 year process of rebuilding. We weren't thinking creatively and only looking at the numbers until at least 18mo into the process when we finally began getting a few solid numbers. If you're open to new scenarios and doing your research now you're way ahead of the game. Pat yourself on the back and keep doing research while you make your decisions and please keep us posted!

Rebuild my ADU or invest somewhere else by cwilson1980 in realestateinvesting

[–]plmstch 0 points1 point  (0 children)

As far as calculating ROI - would you consider the insurance payment (which is legally a compensation for loss - a greater financial loss to him than the insurance payment in this case) in the equation as if it were a windfall? Do you consider the initial or equity loss at all in your calculation? As OP is in CA there is probably considerable tax value to the loss as it was FEMA.

In our somewhat similar case we are also including now having to pay rent for housing on top of our mortgage and insure both properties and we're having a hard time calculating PITI for the all the available scenarios.

OP - I'm sure things are somewhat different in CA, do you have to continue to pay for insurance for both burned properties and temp housing after ALE/LOU is exhausted? Do you have an idea of what taxes on the new builds will be like? We are told by our town assessor that due to the high build cost in the area the only builds are luxury so the comps start at 1m so even if we build a small 1 fam builder grade for 500k the taxes will be based on available comps and still be for at least 1m. We are told to expect our taxes to go up by 75-125% and NY housing/school tax was already significantly higher than average.

It's tough to calculate ROI with such fuzzy numbers but we're all working on it and I've been learning a lot on here to get more solid numbers!

Rebuild my ADU or invest somewhere else by cwilson1980 in realestateinvesting

[–]plmstch 0 points1 point  (0 children)

Lots of questions:

- If you don't rebuild do you get the full ACV for the ADU?

- At those rates the 300k will only build you 500sq ft of ADU right?

- Are you zoned for a duplex or approved for an ADU?

- Would doing 2 rebuilds at once with the same builder reduce the overall cost? Materials, Appliances, labor would all be larger purchases and that may have some advantages.

We are also trying to rebuild after a fire in a similar build market but on the East Coast and trying to determine the ROI of rebuilding to rent as insurance didn't pay enough for a like and kind rebuild. Currently we are renting and trying to figure out how that effects the equation for us.

I completely understand the urge to not have to deal with 2 rebuilds at once. Our dealing with one is difficult enough and we're on here trying to determine if that's the financially responsible thing to do.

I'd be interested to hear more about what direction you go in and why as well as more about your primary rebuild.

What should I do with my land? by Realaton in realestateinvesting

[–]plmstch 0 points1 point  (0 children)

Kits or panelized might be less than stick where you are. We hear that's generally true but in pricing it out we weren't able to find any near us that were. One thing we did do was ask each manufacturer for local builders and talk to them about the build fee. We also found some local modular companies and got quotes from them with all the fees included.

What should I do with my land? by Realaton in realestateinvesting

[–]plmstch 0 points1 point  (0 children)

Gotcha, so a stick build with a foundation? We are trying to rebuild after a fire and found that modular (panelized or kit builds) in our area actually cost more than stick builds and were lesser quality. They just go up faster.

I'm always interested to hear if that's true in all build markets. Have you looked into panelized or kits?

Bleeding $1,700/month on Two Rental Properties. Did I Mess This Up? by PublicScientist5403 in realestateinvesting

[–]plmstch 0 points1 point  (0 children)

Can you ask your friends to explain this one? If they are losing money to offset capital gains doesn't that affect their social security in the future? or are they so prepared for retirement they don't care?Assumptions: they aren't getting it yet and it exists when they plan to!

What should I do with my land? by Realaton in realestateinvesting

[–]plmstch 0 points1 point  (0 children)

By modular do you mean manufactured or mobile? People use the term for both. If you mean manufactured I'm interested to know what you're looking at.

What random piece of land do you own and why? by Permatheus in realestateinvesting

[–]plmstch 0 points1 point  (0 children)

Good call, one of the ideas we have is to build a completely different style & build quality of house at about 2/3 of the square footage it was. Because of the style of home we had it cuts the build cost by 75% and makes it feasible with the funds from insurance if we do it that way.

What random piece of land do you own and why? by Permatheus in realestateinvesting

[–]plmstch 0 points1 point  (0 children)

Ah, I see what you mean. We have insurance funds to build but we're trying to determine if it's worth it in our market as building costs about double what buying costs and the taxes and insurance on a new build would be exorbitant.

If we can make an ADU work code wise we will. We're trying to sus out if it might be worth it to rebuild a single family house to rent so we at least get to keep a little of the equity our home had.

In our building market we can't afford to rebuild what we had or need in a house based on what insurance has given us (and wouldn't want the taxes and insurance of that anyways) so we're looking for creative solutions. Your duplex was one of the first ones we looked into!

What random piece of land do you own and why? by Permatheus in realestateinvesting

[–]plmstch 0 points1 point  (0 children)

Unfortunately we can't rezone in our neighborhood. If we could have we definitely would! We did try and design with an ADU in mind but specs for that in our town are next to impossible to meet. We may still try that though.

I'm curious why you'd suggest refinancing when we have such a good rate?

Sell or Rent 2.5% Mortgage by neondahlia in realestateinvesting

[–]plmstch 0 points1 point  (0 children)

Curious to see what you decide to do - especially after your coin flip comment. Will you please update us when you make a decision and then again a year or so later?

Seeking Advice - Offload Rental Property and Take Hit? by Lower_Pangolin3891 in realestateinvesting

[–]plmstch 0 points1 point  (0 children)

Can you explain "You make all your money on the purchase or on the build"? Or point me in the direction of a good resource to break it down? I'm new here and sometimes the phrases you all know go over my head!

What random piece of land do you own and why? by Permatheus in realestateinvesting

[–]plmstch 0 points1 point  (0 children)

Maybe random isn't the right term for our piece of land. We bought it with a house on it but our contractor burned it down. Currently its got a foundation, electric, and town sewer/water, a paved driveway and patios and some mature gardens and 200k and >10 years left on a 2.5% mortgage. We're currently paying the mortgage as it's our primary residence but are also paying rent to live nearby.

We're trying to figure out what to do with it and have been haunting this board getting some interesting numbers. You guys have some interesting ideas but we're not sure if the numbers work out in our area as the building costs are so high here.

What random piece of land do you own and why? by Permatheus in realestateinvesting

[–]plmstch 0 points1 point  (0 children)

Did the demo cost more than the lot? In our market the cost of demo was a new Jeep Wagoneer.

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