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Rental Property Café™ - Episode 16: How to Evaluate a House Hack

Real Estate Coaching

In this episode of Rental Property Café™, Cynthia Meyer and Veronica Woods use real-life examples to review who can benefit from house hacking, how to review a property listing to determine if it is a good fit, mortgage options, and ways to work with lenders.

In this episode of the Rental Property Café Video Podcast they cover:

Is house hacking right for you? [00:01:33]

What are things to look for when reviewing a property listing? [00:04:15]

Are you prepared for unexpected and potential renovations? [00:22:15]

 When should you speak to a lender about a loan? [00:25:13]

 Is it better to purchase a property with existing tenants? [00:27:41]


Takeaway Quotes:

“ If I could go back and tell my 20something self one thing, it would be to be a house hacker.” - Cynthia Meyer

“ If I was considering house hacking, I would make sure I would feel comfortable living in a neighborhood.” - Veronica Woods

About the Rental Property Café™: 

The Rental Property Café™ podcast offers a real estate tool kit for busy professionals who are building a real estate portfolio. In each episode, co-hosts Cynthia Meyer & Veronica Woods explore ways to grow a successful real estate business while growing your career. 

☕ See more financial planning guidance for real estate investors from Cynthia Meyer on the Real Life Planning blog: https://reallifeplanning.com/blog

Connect with Cynthia Meyer:

Connect with Veronica Woods of Daniel Woods Real Estate:

  • dwoodsrealestate.com/letsconnect 

Transcript -  Rental Property Café™ - Episode 16

[00:00:08] Cynthia Meyer: So what do you look for when you're starting to look for the perfect house hack? When you're looking to get started as a house hacker where you live in one unit and you use the rent from the other units to help pay the cost of the property. Welcome to the Rental Property Cafe™. I'm Cynthia Meyer with Real Life Planning.

[00:00:30] Veronica Woods: And I'm Veronica Woods with Daniel Woods Real Estate. 

[00:00:34] Cynthia Meyer: And we're here today in episode 16 to talk about how you evaluate a house hack. Veronica has brought some real life examples of properties she's looked at recently that we can use to discuss that. So Veronica, you're a house hacker right?

[00:00:53] Veronica Woods: Yes, I've been house hacking for about four years now. Yeah. So I bought a duplex where I live on the second floor and I have a tenant that's helping me pay my mortgage. So I practice what I preach. 

[00:01:06] Cynthia Meyer: That's, I think that's excellent. And if I could go back and tell my 20-something self one thing, it would be to be a house hacker and I wasn't. I was a renter who just paid somebody else's mortgage. 

[00:01:20] Veronica Woods: And so was I. So that's why I thought, we thought, would be a good topic. Because it's, it can be intimidating to find the right deal that is a good fit for that purpose. So I'm glad talking about it. 

[00:01:33] Cynthia Meyer: Yeah. And so when we think about house hacking, a lot of times we think about, oh, this is for the first time home buyer who is looking to become both a homeowner and a landlord at the same time.

But actually, as you've seen in your situation, can also be a great setup for multi-generational families. I was talking to a client the other day who is house hacking in California and they live on one side and their older mother lives on the other side. 

[00:01:58] Veronica Woods: That is true. And actually this is like my third house that you were saying- the untraditional house hackers. Because a lot of times, I set out to be a house hacker on the second one, but I gave up and just bought a regular house because I couldn't find exactly what I was looking for. But I see that a lot of multi-generational families are looking for multi-units or especially a place that has a first floor bedroom is ideal for older- older parents and relatives and everybody to live under one roof relatively. 

[00:02:34] Cynthia Meyer: Yeah, so more people are thinking about it and as it becomes a more commonly known strategy more people are purposefully doing it.

Now, obviously people have been doing this for hundreds of years, but they just didn't call it house hacking.

[00:02:50] Veronica Woods: I guess a lot of times they're- especially this area in Philadelphia, there are a lot of large single family houses- six or seven bedrooms. And sometimes they carve them up to have specific units.

Sometimes they don't. And so like you said, this isn't a new phenomena that people who have multi-generational grandparents and children living under one roof. 

This is an opportunity to potentially make money off of it in terms of maybe your family lives in part of it, but then you can have a tenant help you pay part of the rent.

[00:03:25] Cynthia Meyer: That's right- because we all have to live somewhere, right? And the idea that you can live in a beautiful home, right? And if you're renting out one part of it, you know, whether it's another unit or maybe you're renting out your single family homes from the house hack, that income from the tenant can help pay your mortgage and interest in property taxes. It may or may not pay them completely depending on the market that you're in but it's a real financial boost. It's really a mighty factor in setting somebody up for later financial success, in my opinion. 

So you brought some listings, right? So you brought a couple of listings today and I understand you've looked at both of these before, I think.

Which one should we pull up first? 

[00:04:04] Veronica Woods: I think you wanted to pull up the one that was already sold. So one of them is sold, so it's not on the market. 

[00:04:10] Cynthia Meyer: Mm-hmm. Okay. So this is a triplex, right? In the Philly area. 

[00:04:15] Veronica Woods: This is a triplex in the western suburb of Philadelphia called Upper Darby. 

[00:04:20] Cynthia Meyer: And it's cute. I look at it for the first time, I think this is a nice looking property, right? It looks like it's pretty well maintained on the outside and we can see from the listing it's got three units and it's legally zoned as a triplex, right?

 So one of the questions you would always want to research is this- are they legal rental units? 

[00:04:38] Veronica Woods: And just seeing that in the description is not enough from a legal point of view to feel... 

[00:04:44] Cynthia Meyer: Good point.

[00:04:45] Veronica Woods: ...comfortable to move forward. So that would be a part of your due diligence. Any multifamily that wasn't originally built as a multifamily- in this neighborhood they're mostly single family homes. Your antenna should go up to just to make sure that the township has approved that. Like I said, any multi-family that wasn't originally built that way is really important for you to do that due diligence. 

[00:05:10] Cynthia Meyer: So, as we look through the description, let's say we want to decide, okay, we want to go see this property, right?

What are some of the things that we are looking for? Like I know when I'm looking at the outside, I think, okay, this looks like pretty nice. I think I'd like to go see it. I might have some questions about the roof. Of course if you were in contract, you would answer in the inspection.

And maybe there's anything that might be in the disclosures. What would you look for, Veronica? 

[00:05:36] Veronica Woods: The first thing, if I was considering house hacking, I would make sure I would feel comfortable living in a neighborhood. I know we talking about one of the first, besides how many units it is and what the potential to rent out-

would I want to live? Live in the area? That would be the first question. 

And then...

[00:05:54] Cynthia Meyer: Oh, great question, right? Yeah. Is it- can I get to work? Can I get to public transportation? Is there a grocery store? Is it safe to walk alone at night? Yeah. 

[00:06:03] Veronica Woods: Are you comfortable? Is a big question for a lot of people and you might want to drive around the area to make that decision for yourself. 

And then just assess from the MLS as a relative condition of the property. Is this like complete renovation? Are there tenants in it now? Because if there's tenants, then I would want to look at the lease terms because if there's a long, any long term leases, then that would mean that would restrict how you would be able to take over as landlord. You would basically have to assume any long-term leases. If there were short term leases in place, you could potentially say to the seller, "Hey, you need to deliver it vacant before I buy the property." 

[00:06:49] Cynthia Meyer: And you might think about having it delivered vacant maybe if you were going to be making renovations. Do you want to make them all at once, right? Or if there's a unit that you wanted to move into that is currently tenant occupied, right? 

[00:07:01] Veronica Woods: That's a good point about the- even the renovations because it's really hard to do renovations around families living a property. Fixing a deferred maintenance is really tough. So if you do plan to do any major renovations, you need to budget for the property to be vacant for a period. 

[00:07:18] Cynthia Meyer: So it looks like just thumbing through these interior shots, it looks like certainly one of the units has been nicely renovated. Maybe that was the owner's unit, who knows of the seller. Did you go in this property, Veronica? Did you walk through it? 

[00:07:32] Veronica Woods: I did. And actually, I guess another point of the pictures versus in real life could be different.

 A lot of times people put pictures up before when it was vacant. That's the best look of the property. 

[00:07:46] Cynthia Meyer: Before the tenant got in there and hung their pictures up. 

[00:07:49] Veronica Woods: The owner was actually still living in there when I looked, so they had like a washer and dryer. You see the hookup in the living room. And there were definitely people in that unit on the second floor.

So they put pictures while it was vacant online. But that's not what I walk into. So that's always just something in real estate, in general ,you can't go purely by the pictures because marketing point of view, the Realtor®'s going to put the best pictures forward and you're thankful that you can see without the furniture. But you can't go by the condition fully from the pictures. But you can kind of get an inkling like this- where we're looking at, this is pretty dated. 

[00:08:32] Cynthia Meyer: Right, it's dated. Looks like the oven is old. Maybe you're going to have to replace that now or at some point, right?

Could use a fresh coat of paint. But those are all easy relatively inexpensive things to change. 

I always think when I'm- when my husband, Steve and I are looking for a new property, before we even go and look at them, I always look through all the pictures and I'm not necessarily going to let minor renovations get in the way of a good property, right?

Like that stuff is not hard to do. It's the major structural work that- if you find something structural in your review of the property or in the inspection where it might really give you pause, would do you agree with that? 

[00:09:08] Veronica Woods: I do think it makes sense to look at the photos before getting your car and driving to a listing or asking anyone to do that.

The other thing I do, if there's a property that has potential, I'm calling the listing agent and say, I have a client's interested and trying to get more insight that they won't put in writing. So you guys have to understand that there's some things they're just not going to put in writing.

[00:09:35] Cynthia Meyer: Sure. 

[00:09:36] Veronica Woods: Just don't want to document that. But I can get insight on the tenants or a known repair that I should say in Pennsylvania and in a number of states, the sellers are required to disclose detail about the property when they're putting it on the market. Most of the time they make that document available on the MLS.

Sometimes they don't for whatever reason, but you could...

[00:10:01] Cynthia Meyer: And you have to ask for it. Okay. 

[00:10:03] Veronica Woods: So I would go with pictures and then I would ask for the seller's disclosure if it's available. And then those mechanical issues that you alluded to that you, you can't really see from pictures. You can get a sense of like, how much repairs are really required for the property. 

[00:10:21] Cynthia Meyer: So I think that's an excellent point.  Just looking at this picture here, right? I see that units are- looks like units are separately metered. And you'd have to tell me, Veronica, is this like two gas and two electric or four separate meters for the gas of the electric?

I think it's really interesting that the seller posted them, first of all, very helpful because buying a house hack, right? You want to know are your tenants going to be able to pay their own utility bills? 

[00:10:48] Veronica Woods: These are- that's an electric meter. That's electric. So they're separate. So there might be a house meter and three separate... 

[00:10:55] Cynthia Meyer: Three separate individual units. Yeah. Okay. 

[00:10:57] Veronica Woods: That is something that I try to look for in the pictures. Separate meters. Are you, or in the basement, are you seeing separate hot water tanks and...

[00:11:06] Cynthia Meyer: Right. I think we saw some separate ones. Yeah. 

[00:11:08] Veronica Woods: So those are things that you try to find out. Or you- I would ask the question if it's not clear. So they're showing two or there's a third one. 

[00:11:18] Cynthia Meyer: And there's a third one. Yeah. Yeah, 

[00:11:20] Veronica Woods:  You would try to find out in advance.

[00:11:24] Cynthia Meyer: And I will say, I don't always see these kinds of pictures. Do you? Where somebody is taking pictures of the utilities and putting them in the list. It's very helpful actually to be able to see that. 

[00:11:33] Veronica Woods: That's my practice because I know people have that question. Again, the Realtor® is trying to market the unit. There are examples where it's just like one picture and then that leaves a lot to be desired, but the more information that you could provide without people having to draw, leave their house... 

[00:11:52] Cynthia Meyer: The better. Yeah. So this, I think this is really interesting and this looks like it's a basement unit. Maybe this is the- is this the studio because not a lot of windows here?

[00:12:05] Veronica Woods: So seeing that picture and even like they did mention that it's legally zoned. They have to at that point, because they know that would be a question based on the layout and the other houses on that street. That's a basement for those properties. But it did have an exterior... 

[00:12:22] Cynthia Meyer: Oh, it did? So it had egress. Yeah. Yeah. Okay. Yes. But because I would look at this and you may have had the same thought, I think. It can't- you're not going to get good rent for this bottom unit without a window. 

[00:12:34] Veronica Woods: Yeah. And I'm not sure that the window issue- that is hard to see from the the pictures. And actually, that was the one I had trouble getting into, on the inside, but I did see the door. 

The one question in general, you should ask, like rentability. So just because it's multiple, sometimes there's one unit that may kind of less than suboptimal in terms of-would this attract a person who wants to stay there long term or more of a transient type tenant? So that's just something to think about. If you evaluate this- even though it's three units, if you have a two unit that would be more long term tenant- have less turnover, you kind of have to evaluate the trade offs of just having an extra unit, but maybe attract a more transient tenant versus a property where all the units are, you know, great layout and where people will probably live here for multiple years. 

[00:13:30] Cynthia Meyer: Yeah. I think that's an excellent point. So what else would we- what else would you want to look at in- a we're to the beginning here, anything else that we look at in the listing before we started to run the numbers for a particular property?

[00:13:43] Veronica Woods: I think there's probably enough to make a decision on the location and for this property you're saying, okay, it may need some repairs, but everything is pretty much cosmetic. That's probably enough for me to say, okay, I want to get in my car and look at it in person. Start pulling more assumptions together.

[00:14:03] Cynthia Meyer: Yeah. And now one of the things that I know we would both do is to figure out what is the market rent for similar units. So in this property, there are three units assuming that everything is legally zoned again, which Veronica says we've got to trust but verify, right? So we've got a one bed, two- one bedroom, one baths and then the studio, right?

So you would, for example, take the address. And go to Rentometer and put in one bedroom, one bath and see what is the median or average rent in the geographic area for a unit like that. Maybe even if you can, try and look- go to Zillow or something and look or apartments.com and look at other listings in the area to see what you're in competition with.

What else would you do? 

[00:14:50] Veronica Woods: I think run a quick number. So besides looking at the rent by itself, do a quick math with, okay, my mortgage payment, if based on what they're asking price is, a lot of times people get caught up with, oh, they're asking 265. I need to run the numbers at 265. You may be able to get a discount. Figure out what the monthly debt service would be and then run a quick cash flow to see if you have any chance of being positive with the current rents because...

[00:15:21] Cynthia Meyer: Good point. 

[00:15:22] Veronica Woods: Especially with taxes in certain areas in near Upper Darby. Towns could be right back to back, they have very different tax scenarios. You have to kind of evaluate the taxes along with your debt service, your mortgage, and then will the rents have a chance to cover that and operating costs. Because if you come out negative just at that quick level, there's no chance based on the owners being just totally unrealistic about what they want to sell for; it's not even worth it. You just can't make magic out of the numbers working if it's just priced too high. A lot of times we see that with the properties that have some renovations done, and quite frankly, that's why my client didn't want that particular one that were looking at. The numbers just didn't work with the rents... 

[00:16:12] Cynthia Meyer: The debt, the market rents, it could get...

[00:16:16] Veronica Woods: I think they, the actual- the final price was 265. I think they won it even more than that. So they did come down. But this was an example that just running the numbers up at the- closer to the asking price, what the potential rents would be. It's ah... 

[00:16:31] Cynthia Meyer: That just doesn't work. Yeah. 

[00:16:33] Veronica Woods: Yeah. And that happens. 

[00:16:36] Cynthia Meyer: So I want to point out for anyone who's doing this for the first time, right? This is on the taxes and the school and county tax too are on the listing, right?  So easy to find out. You can often, if you're looking at Zillow listing for example or Redfin or Trulia that you can see the estimated property taxes and estimated property and casualty insurance payments and homeowner's policy payments.

What you won't see are the other estimated costs that you- if you're getting serious about dating this property before you buy it you want to run a full budget, right? A full year one budget that also includes the cost of a property manager if you need one, projected maintenance cost based on the age of the structure. Certainly any renovation costs you need to do- maybe we could dig into that a little bit. And then things like snow removal or landscaping and that sort of thing. Making sure that you've got a realistic view of what it's going to cost you to live there. 

As the house hacker you have responsibility for your own unit, right?

But you also have to have responsibility for the other parts of the property if it's not rented or if the renter is not paying their rent. 

[00:17:41] Veronica Woods: The takeaway from what we're seeing is if this quick math is red and negative, becomes not a house hack. It's not going to serve you as a investment. There's running the numbers with you living in it and there's running the numbers with you having it as a complete investment. Those are two kind of quick math things that you should do and if it will never be a profitable investment, then it just doesn't make sense to take anything further. 

[00:18:10] Cynthia Meyer: I think that's an excellent point, Veronica and worth repeating. If I hear you quickly, you're saying that, if it wouldn't make sense, if you ever moved out of it as a profitable rental, even if it could be an attractive house hack in the long run, it might not be a great investment because you may not want to live there forever.

[00:18:28] Veronica Woods: If your exit strategy is to keep as a long term rental, then it's important to look at those numbers up front because you're evaluating your exit strategy. Now if you plan to just sell it just like a single family house, then that's different. So there may be a reason for you to like, Hey, I really like this house. Just because it'll never be a profitable investment, it's still offsetting some of my costs. So I'm going to live here for a while and then discuss it, but that's not really fully a house hacker's mentality.

[00:19:00] Cynthia Meyer: I know you recently looked at another property. Should we pull that one up on the screen and talk a little bit about how it's different and some potential renovation questions? 

[00:19:10] Veronica Woods: Okay. So I think the other example would allow us to dive into some questions you should ask about renovating the property. 

[00:19:20] Cynthia Meyer: Okay so looks like this one's a triplex, too. What can you tell us about this one? 

[00:19:24] Veronica Woods: This is a larger property. You can see just the- just the plot. You have more land; it's not attached. There's a pretty significant backyard space for parking; all street parking and whatnot. So there's definitely more landscaping expenses and the units are larger. So it's a two bedroom... 2- two bedrooms and then a studio on the third floor. This property is in a little- it needs a little bit more love to have it fully rented out which brings up the point about the renovation. 

[00:20:00] Cynthia Meyer: If I were looking to buy a home that I wanted to live in for a long- for quite a while, and also rent out the other side of the property, right? Are they side by side or is it a flat, like an upper and a lower? 

[00:20:12] Veronica Woods: Oh, they're each on one floor. 

[00:20:14] Cynthia Meyer: Each on one floor. Okay. So I would think this is pretty attractive. In fact, one of my sisters lives in a property like this as a house hacker and has been very successful in paying off her- almost paying off her mortgage completely; 15 years early because of doing that.

I would think this was pretty interesting. What else did you find when you looked through it? Should we go through some of these pictures here? 

[00:20:36] Veronica Woods: I don't think there was as many good pictures or... 

[00:20:39] Cynthia Meyer: Exterior? Yeah. Here we go. Okay.

[00:20:41] Veronica Woods: Yeah. So those are pictures of the first floor unit.

[00:20:45] Cynthia Meyer: Nice looks, rentable.

[00:20:47] Veronica Woods: And this is another one. When I walked inside, it did not look like this. 

[00:20:52] Cynthia Meyer: Oh, really? 

[00:20:55] Veronica Woods: I was like, I had to look back at the picture. So they did pick an age where the place looked a little bit better than It does in person. So that's why I really emphasize you can't go by the pictures.

[00:21:07] Cynthia Meyer: Yeah. You shouldn't just buy a house on the internet, right? 

[00:21:10] Veronica Woods: You need somebody to go in, to verify, because this is just marketing. So I did find a few holes in the wall, let's say. 

[00:21:20] Cynthia Meyer: So it needs a little love. That's, that is strange. What is that? 

[00:21:24] Veronica Woods: Yeah. The kitchen kind of have a little odd layout. This was a building that wasn't, I believe one of these older buildings it wasn't originally a triplex; but a pretty good job of cutting it up into three units, I would say. 

[00:21:40] Cynthia Meyer: Oh, so this one's a triplex, not a duplex. That's right. Yeah. Obviously this is probably more than just a cleanup, right? That's a- maybe some regrouting here at this tub, but again, not super expensive to do.

[00:21:52] Veronica Woods: Honestly, most of the stuff was cosmetic. When you're evaluating a house hack, and I'll use my example, it's not on the screen. So when I looked at the property, both units were occupied. But in that case, I picked the one- I evaluated the tenants and said, okay, I feel comfortable living in this one and I already had cash flow from the first floor unit. Now, with a situation like this, you're evaluating, okay, I'm pretty much starting from scratch. Okay. So will my timeline to have this rent ready and allow me to live in it? So just evaluating the timeline will be important in terms of when you could actually start collecting rents and make it an investment versus just doing the renovation. That's what...

[00:22:40] Cynthia Meyer: Right.

[00:22:40] Veronica Woods: ...is going to be important.

And what you may want is something where I know I can just move in one and then I could slowly rent out the other. So if you don't really have the capital to do all the renovation at once or where it makes sense where one is definitely a quicker renovation and I can move in and so forth. So it just really requires just thinking through the renovation timeline and the renovation partner. In this case there it's pretty much always cosmetic repair. 

[00:23:10] Cynthia Meyer: Mm-hmm. 

[00:23:11] Veronica Woods: And a lot of my clients are not necessarily chasing a hundred thousand dollars renovation budget on the house hack, typically.

Y ou want to make sure you have somebody that could do the work quickly and their partner after you assess, Hey, I want to do this, then really, do you have somebody that could work on your timeline to get it ready for you or a tenant to move in? 

[00:23:35] Cynthia Meyer: That's right. And if you're planning to do some of the work yourself, being realistic about how long it's going to take you to do it.

We've all seen the renovation show right where the homeowners overestimate their own capacity to get work done or their own abilities to get work done. So I think that's an that's a really interesting point. What else with this particular property, what other questions did you ask yourself as you were walking through it?

[00:23:59] Veronica Woods: I think in terms of the renovation budget, just speaking on being conservative. Even if you're saying, oh, I'll do some of this myself and I'll just pay for the others; the rest of it. Making sure you really account for what you do see, what you can't see like when you open a wall.

Really look behind something that maybe you only had a cursory look at when you were at your home inspection and really have a contingency. Everybody should have a contingency 10% in the budget. You don't want to just have an optimistic budget, just to make you feel good, to get your mortgage and then the reality, you know, if you're like 10,000 short, like where is it going to come from? You really want to be prepared that if there's like a $10,000 surprise that you account for that.

[00:24:46] Cynthia Meyer: You have liquidity for that, right? You have some cash available or some borrowing available from that. 

So interestingly, if that brings up the idea of talking to your lender, right?

Are you going to be able to borrow enough to buy the property and complete the renovations if you need to borrow for the renovations. And so there are certain types of loan programs to do that. How would you bring this to a lender? Like how would you initiate that conversation? 

[00:25:13] Veronica Woods: Early. I'm thinking the biggest mistake I see people making is not being upfront with their lender about what they're trying to do. They're really so stuck on the acquisition budget and I find that I need to almost sometime intervene and make sure that conversation happens. Did you tell them about the renovation budget? Oh no. I'm like he needs to know that because let's say it's some sort of commercial loan where they're loaning against the after repair value; let's say it was- it usually 75% of after repair value or 80% of cost. So they need to know all those numbers, or you could potentially not be able to get the loan because of late disclosure to the lender. Everybody looks bad when we didn't fully account for the renovation budget, which is generally the debt to- for construction loans is usually more expensive. So I usually talk to my client like, after that point, they're like maybe it's about 40,000 of renovations, right?

Have you thought about how you're going to finance it? Are you thinking about your home equity line of credit? Or do you want to roll it into the loan? Let's talk about this upfront because that will affect what kind of offer we put forward and what kind of loan approval that we need. So yeah, early...

[00:26:34] Cynthia Meyer: Getting to the idea which you and I talk about all the time is it's a team, right? You need a, you want a team, right? Financial guidance you're getting from your tax advisor or your financial planner, from your Realtor®, from your lender, from your insurance agent, right?

That you want everybody singing for the same song sheet on this so that you're prepared for all of those unexpected things. So the loan program that I think that I'm thinking of the FHA loan program where you can do a low down payment mortgage, and then also borrow for renovations.

That's two or three K, right? Is it two or three K? Yeah. 

So Veronica, anything else? We've tackled the idea of what's a house hack and why do it, right? Different types of people who might benefit from house hacking. We talked about reviewing the listing for details. Certainly, evaluating the current tenants and the potential rent.

We talked about preparing for unexpected, having a lot of liquidity, roping in your lender into the conversation, running all the numbers. Is there anything else that this new house hacker should be thinking about right as they're evaluating potential listings to go see?

[00:27:38] Veronica Woods: One other thing I may have glossed over it. New, newer investors are afraid to take on the properties that have existing tenants. I'm not saying that they don't bring their own new headaches to it and things to consider. But a lot of times that's why people are selling; they're tired landlords. So, there are tenants involved. I wouldn't just gloss or kind of rule those properties out that have tenants in it. You do have the opportunity to ask for it to be delivered vacant. You would arrange a closing date that would allow the owner to tell the tenant that they have to move and...

[00:28:15] Cynthia Meyer: Right. In a legal way. Yeah. 

[00:28:17] Veronica Woods: They're out of the property before you even get the keys- in a legal way. You can't just kick the tenants out.  So I did talk about if they're on a month to month versus a long term lease, but there are a lot of opportunities of that where there are tenants living in it now, and you could, like me- it was fully occupied and I picked one tenant to stay the other was given the notice that they had to move out and it worked out. So those things do work out. And I have the same tenant is still here. So I think I did it pretty...

[00:28:46] Cynthia Meyer: So it worked out pretty well. Yeah. 

Having a tenant occupied property can actually help you buy the property, right? So if you're buying a property and you're going to live on one side, and you have a long term lease for the tenant on the other side that you're going to keep, right there, that income from the lease can be counted as part of the income formula in getting a mortgage.

There could be benefits and disadvantages, right? 

So Veronica, as usual, it's an amazing conversation in the Rental Property Cafe™. I'm looking forward to taking this idea and maybe looking at some different deals, right? Some single family deals, some multi-family deals and talking about them in the same way.

Does that sound good? 

[00:29:21] Veronica Woods: Yeah, hopefully we can get some good feedback if our viewers like this one, we can definitely do more of these because these are just mimicking the conversations that we have on a routine basis for clients anyway. 

[00:29:34] Cynthia Meyer: Yeah. Well, have an excellent day. Thank you everyone for joining us in the Rental Property Cafe™ and hit the subscribe button so you'll be notified of the next conversation.

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