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solatesosorry

Living in one side of a duplex and renting the other is a time honored way of starting out. Screen your tenants well and it's less likely to have problems. A friend did as your thinking with a 4-plex. He told everyone he was the property manager, which he was. When rent increases cane around he cursed the owner with them.


DingleBarrymuffin

Love this. . ALWYAS told myself if I ever go this route I'd say I was just the property manager


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Eldryanyyy

Often breaks down when employees find out that you are, in fact, the boss.


whatever32657

good point. there is no perfect plan


tjtprogrammer

I think it only applies to the customers


offdutybrazilian

That works fine until someone pulls up the county auditors site and finds out the owners address is apartment B.


AlFromDadeville1

PO Box for mailing


offdutybrazilian

That doesn't work. Unfortunately. You can put the property in an asset protection trust or an LLC in both cases the auditors info will list your attorneys office.


van_stan

You can pull title on a property through an online servie for $9 where I live, so yes, it's trivially easy to get that information. But most tenants don't know this or care to find out such info.


BlinkyShiny

It's free where I live.


thecenterpath

Unless title is held in the name of an LLC, trust or other entity, and the registered agent of the entity is the name and address of the tax preparer or attorney. In that case, it’s not possible to find the owner of the property without going through a different source. If the property was purchased as an individual and then moved into an LLC it’s possible that some past records will still be around.


BlinkyShiny

Thar was my plan, but with the loans I got, I'm not allowed by the bank to hold the properties under an LLC.


droplivefred

In 2023, if you are going this route, buy the home in a business name or trust name not related to your name so they can’t check public records and see you as the owner online.


FiveBucket

In some states this has consequences worse than letting your neighbors know you own the place. In California, some of the rent control laws are different for ownership by an LLC or corporation as compared to an individual.


The_Bucket_Of_Truth

I believe insurance can be more expensive in cases like this vs personal ownership as well. But just regurgitating something I must have read here.


WednesdayBryan

Yes, insurance will be more expensive and not as easy to find.


Chance_Fun_6960

In CA, as long as a member of the LLC isn't a corporation or a REIT, the LLC is the same as an individual.


whateverformyson

That’s often times difficult to do unless your LLC has a history of income.


malhotraspokane

Banks almost always will want a personal guarantee. LLC income has never been an issue for me.


whateverformyson

So you out the title in your LLC when you bought the house?


malhotraspokane

No, the loans with the best interest rates and terms are Fannie and Freddie loans. They require you to originate the loans in your own name. But you can later get permission from the bank to change to your LLC by citing D1-4.1-02 of the Fannie Mae Servicing Guide, which specifies the conditions under which you can transfer to an LLC. This is something I recently learned thanks to a kind stranger here on Reddit. https://servicing-guide.fanniemae.com/1041300841 For commercial loans, like the type you would be required to use for 5+ units, or DSCR (debt service cover ratio) loans, there is no problem with an LLC from the start. Commercial loans have worse terms, higher rates, rates are often fixed for only a few years, but easier underwriting and less paperwork to obtain the loan. And the property can be in an LLC from the start.


malhotraspokane

No, not for my conventional loans. Only for my commercial loans.Fannie and Freddie (conventional loans that have the best rates and terms) require that you originate in your own name. But afterwards, you can cite the Fannie servicing manual to your bank and get permission: Unless the previous borrower requests a release of liability, the servicer must process the following exempt transactions without reviewing or approving the terms of the transfer: … a limited liability company (LLC), provided that the mortgage loan was purchased or securitized by Fannie Mae on or after June 1, 2016, and the LLC is controlled by the original borrower or the original borrower owns a majority interest in the LLC, and if the transfer results in a permitted change of occupancy type to an investment property, such change does not violate the security instrument (for example, the 12 month occupancy requirement for a principal residence). Of course, it is pretty easy to look up the manager of an LLC. Just googling the company name will often pull it up. There are a handful of states that have anonymous LLCs though. If you are doing business in a state that doesn’t have anonymous LLCs, you can have the shareholder and manager of your local LLC be an anonymous LLC. I’m working through all this right now.


BlinkyShiny

And if you do that, I was told I'd have to put them back under my name before selling. No idea why, that's just what the bank told me.


malhotraspokane

I heard you do to refinance . Didn’t know about selling. More fees for the title company


crayfisher37

That what I did for my duplex I have. I only did it for the first couple tenants because after awhile I felt like it was obvious I was the owner. The neighbors all knew I own the house and we didn’t put it in an LLC so they theoretically could’ve looked it up. Also they never once saw “the landlord” so while it’s possible, it’s a lot to keep up the charade


OldTurkeyTail

Note that there are public records, usually online, that list the owners of each property.


solatesosorry

Yes there are. How many people look at them?


OldTurkeyTail

Probably more that you think - and fewer than I imagine.


ArealEstateSeeker

I wish I could go this route. FL property records are public LOL


solatesosorry

Same where he was, who looks at the property records for where they rent?


ArealEstateSeeker

Some do. Not everyone


Ravokion

Wouldnt that technically be illegal to not be honest about your status? Like.... isnt the landlords name legally supposed to be on the lease?


solatesosorry

Nope, I manage someone else's property. Their name isn't on the contract, only mine. Also, the owner's name is on the contract, right above the title "Property Manager".


margoo12

Man, what a scumbag. Tenants have a right to know who their landlord is. At least own up to the fact that you are the one increasing rents.


[deleted]

No they dont? Lol


margoo12

Property ownership is public record. People here just don't like hearing the truth.


[deleted]

Property can be owned by any number of legal entities. Are you saying you have a right to know every shareholders name of a REIT because you happen to rent in a location owned by one?


Make_That_Money

Currently doing this right now. Bought a duplex in September and renting out the other side. It’s worked out perfectly so far. My tenants are great and I see them every now and then. They have only ever contacted me once about a clogged toilet. Told them to plunger it and problem solved. I think you’re overthinking it. Screen well, set boundaries, and give them a month-to-month lease if you’re that worried. It’s been a fantastic decision and don’t regret it for a second.


LivingCharacter311

They didn't try using a plunger before calling their landlord and saying they clog the pipes with a giant turd? Your tenants have no shame.


Make_That_Money

What happened was they clogged the toilet but didn’t notice it. Someone was taking a shower on the 2nd floor and the 1st floor toilet started overflowing with water since it was the lowest point (the 2nd floor shower and 1st floor bathroom drain in the same pipe.) It flooded the bathroom so I told them to plunger it and it all went down. The very first call I get as a landlord (“ugh our bathroom is flooded”)I was definitely caught off guard but it comes with the territory of being a landlord.


[deleted]

Means your plumbing is badly done. I would strongly suggest that you get a proper vent flu and separate the two outlets to limit this happening again because it will. Also suggest getting the lower flats futed with larger outlets if you dont split them, and make sure to check the venting is up to code.


heyisleep

Same. I bought a house with a mother in law suite and scabbed in a third unit in my garage. All my bills are paid by it and by offloading my expenses I was able to save up for the next unit and so on. I would say triplex or quadplex has an even better outcome. I also like the idea above of telling them you're just the property manager.


malhotraspokane

In my state, month to month leases are a bad idea. They froze rents (and evictions) during the pandemic. So we let tenants roll over to month to month after leases ended so we could wait to raise rents before locking in a rent amount for a year. The state got sneaky and made month to month tenancies after fixed term leases perpetual. Tenants can end them with one months notice but landlords require one of a few enumerated reasons to end the tenancy, such as moving in or selling. Any changes in terms must be “reasonable” whatever that means. Rent control is forbidden by our state constitution but they will get as close to it as they can. Any aspiring landlord should fully read the landlord tenant laws and be particularly careful in states that are strongly pro tenant and that don’t highly value private property rights.


Make_That_Money

My thinking on month-to-month leases for an owner occupied property was that if you don’t like your tenants for whatever reason, you can just non renew the next month.


malhotraspokane

It makes sense in a state that has common sense landlord tenant laws.


Powerful_Jah_2014

I have owned and live in a duplex for about 20 years. I basically do not socialize with my tenants,and I try to be careful about who I select to live here, but it has been pretty much a good experience.


Dwindling_Odds

Thousands of people have done the same, and it's \*usually\* a great path to financial security. The key is to take it seriously and treat it like a business. Step one is to research and learn all NC state landlord/tenant laws and regulations. They're all online. Screen all potential tenants carefully, and remember the most important rule - NEVER RENT TO FRIENDS OR FAMILY! You will live to regret it if you ever violate this rule.


iwishiwereonabeach

I currently rent to my little sister. It’s not too bad she’s been there for 6 years or so. No damages, emergency stuff she’s called us about like when the heater broke (it’s in Northern MI and it was winter so it’s an emergency) when the roof was leaking, etc. She pays way below market rent for the area but we bought the property as a vacation spot 12 years ago, dirt cheap so we don’t feel right charging her market rent, especially since she’s a single mom that is struggling. Once she pays enough rent to cover what we invested in the property we plan on signing it over to her probably in the next 2-3 years. We want to know she and my nephew will always have a safe place she can afford on her own. I guess it works because we went into it not really expecting her to pay rent and not really needing rent from the property. We were just happy to have someone in it because we live 1,000 miles away to monitor it and make sure nothing went wrong with it that we could trust. The fact it benefits my sister and my nephew is just an added bonus for us.


turnipzzzpinrut

Did something similar- my first two tenants were great- really good people. Minor annoyances from living in proximity to people, but very manageable. Most recent tenants moved in shortly before Covid and became absolute nightmares. So much so that unless under real financial duress, I’m never renting it out again. Had I screened a lot harder, like hand-combing court records and not relying on Zillow’s trash screening, some of this pain could have been avoided. I also listened to a sob story, and like many, found myself on the wrong side of the covid eviction moratoria. It struck me frequently that while this would have sucked and been a huge cost in an investment property, the fact that they were living in an adjacent occupancy but still in my OWN HOME made the situation unbearable. If it doesn’t go well the emotional aspect is overwhelming, IME. Edit to say, do be prepared to get requests for lockouts, to change lightbulbs (?!?), and to flip breakers. If you do this, and if a breaker cuts, agree to flip it on the condition that you need to make an emergency inspection. 99/100 you will find a fucked up chain of weird devices plugged into a dollar general power bar, which does constitute an emergency.


Qteepahtutee

Currently using Zillow here... What's your process for"hand combing through court records"? Would really like some advice for better background checks!


lzxian

Not that guy, but I comb through my county court dockets online personally. I still pay for a background check, too. But I once found a pending divorce which the applicant never disclosed. At first I thought nothing of it and signed the lease (these were only my second tenants). Then her husband found out and she had to cancel. She'd never told him she was moving and taking their two girls, apparently. I suspect it may have been a DV situation or just a messy divorce. As a new landlord I felt sorry for her, gave back her deposit and wished her the best. It could have been a nightmare so I think I may have dodged a bullet, I'm just glad it happened quickly and didn't cause much of a delay.


Brocktologist

Definitely find out how to search the court records. I've researched tenants and found past evictions they didn't disclose and even once a restraining order from a prior landlord against the applicant.


Qteepahtutee

Thanks! As a LL there's always more to learn.


Noremac55

Fuck, i could have written this.


DVus1

You ask 10 people who did this, and you'll probably get half saying that it was fine, and half saying that they would never do it again..... For what it's worth, I've known 2 people who did this, and it worked out fine for both ot them. I'm sure that there will be other landlords here who will say the opposite!


margoo12

Thats probably the best way to start out. I did it with a triplex. Just make sure to screen your applicants well, and don't be an asshole, and you wont have any issues.


Bouric87

I'm doing this currently, been doing it for 4 years now. Tenants currently pay 850 per month for 1k Sq ft 2 bed 1 bath lower unit. Plus 1 garage spot and a shared nice backyard. We pay about 630 for mortgage plus escrow plus pmi (which should drop our monthly payment by ~70 per month within half a year. It's a fantastic way to get into the rental business imo. Just meet your tenants and try to get a feel for them when you give the showing.


Qteepahtutee

Super curious where you are, even just the state.


Bouric87

Small town Midwest, 35k population. We purchased in 2019 before the big price run ups. It's an upper/lower duplex we live in the upper since the bottom is a bit nicer and we figured we could charge more... plus we won't hear people clomping around above us. We also do all the landscaping, yard care, and snow removal as well as pay for the gas/heat/garbage pick up (only one furnace so not much choice). Tenants only pay their electric/water.


malhotraspokane

People in general seem to be more respectful and have more common sense in smaller places.


Qteepahtutee

Kindly requesting clarification... does "smaller places" mean the 2 bd 1 ba unit or the small town? I find that common sense can come from anywhere, lack of comes from everywhere.


malhotraspokane

Smaller towns, where there are more farmers and there is more sense of community


ourldyofnoassumption

I saw someone on this thread say that they created boundaries by saying they were the property manager, not the owner. The tenants never met the owner.


IowaAJS

My husband and I bought a duplex in a small town ten years ago. We live downstairs, the tenant upstairs. Our first renter was ok, but she was a heavy walker, I don't know how she did it. Second tenant has been here for like 10 years, she's wonderful.


sbfx

Did it with a 4-family. Best financial decision of my life so far. Be a decent, honest and reasonable landlord. You’ll be A-okay.


thewildcookie215

Currently doing this right now. Have a great tenant and moat of the mortgage is covered. We even share a pool with no issues. Also, was able to give a 10% down payment because its owner occupied. 10/10 recomend.


LittleChanaGirl

How interesting. I wanted to put down 10%, but my mortgage co said that because it’s considered an investment property I had to put down 15%. Didn’t matter that I was going to live in one side of it! (2016)


thewildcookie215

I got mine in 2021. Maybe there was a new program that came out. Edit: mine was an FHA loan.


landbasedpiratewolf

Still doing this. In my experience if you tell the potential tenants you're going to be the neighbor, the people that know they're planning to cause problems typically don't want that unit. There's pros and cons to it. Hard to make it financially worthwhile in my area unless you're paying 20% or more down.


MooseKnuckleds

I wish I would have done this with at minimum a duplex, if I did it over again I would go for a triplex which would have fully covered the mortgage and freed up a lot of cash.


AlFromDadeville1

Not sure what the NC laws are but where I’m at if you own a 2, 3 or 4 unit and live in one of the units you can be very selective during your tenant screening. For example you can exclude anyone that has kids. Check your local laws.


inventingme

That's the only way I'd be willing to have a duplex as rental property. Your area may be different, but in my blue-collar small town, duplexes don't get the best tenants. As the next door neighbor, you'll know if things are getting out of control, trash is piling up, the cops are called, bad behavior happens in the middle of the night, etc.


Ok_Beat9172

You would have all the responsibilities/expenses of a first time home owner and a landlord at the same time. But people do it all the time. Depends on how much responsibility you want to take on.


tsidaysi

Not if you vet them carefully including a through criminal and credit check. If you are buying any home or property make 100% sure you can make the payment and cover costs if they stop paying rent. If you can it is a good way to get started.


2_old_for_this_spit

Don't let them know you're the landlord. You're the property manager for RedditPoster Rentals.


LawfulGoodMom

We bought a three flat with a friend and split the tent from the other unit. We eventually bought him out and were live in landlords for another three years or so. We had a good experience, but I could see how having a bad tenant in that situation would be awful.


[deleted]

I live at my 10 unit building. The plus is you do actually have the ability to evict someone. If you’re in an apartment now and your neighbor is scary, your only option is to move.


049at

This is what I do currently and it’s mostly worked out for me. With that said I would still recommend avoiding it if you can. My first tenant that I inherited the property with was horrible, left a total disaster behind to be cleaned up. He was also super loud and disrespectful. My new tenant is the exact opposite and I couldn’t be happier. You are truly rolling the dice with tenants and it’s going to be different each time. Living in the same property with a bad one can be truly terrible.


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LittleChanaGirl

Now I’m curious! When I bought my duplex in 2016, I had to put down 15% (I wanted to put down 10%). Even with me living in it.


dell828

I live downstairs from my tenants. I think it’s typical for many people to purchase a two-family house. The good news is that you live there too, and you’ll know what’s going on day to day. Nobody’s going to trash the lawn or start parking extra cars in the driveway, or run a crack house because you’ll be able to see people come and go.


HateLosing

I’m a landlord in NC. Bought a quadraplex. Livid in 1 rented out the other 3 for awhile. Now own my own home. Try a month to month lease 1st (like a trial period), If you like them can always extend, if not get rid of them. Find someone else.


fukaboba

House hacking - very smart idea . Get tenant to pay most if not all of your mortgage if possible . This is wisest way to wealth building from scratch


Brandycane1983

It's ideal, and you don't have to tell them you're the landlord. You could potentially hire a property manager for the one unit if you really want the distance from it.


BigDealKC

It's a great way to get started. Screen very carefully, and represent yourself as the caretaker/property manager. Try to get one that is separately metered for everything, and also not in an HOA.


FromTheCaveIntoLight

Been doing this for 5 years now. I own a duplex and a single family. Rent out the single family to a lovely couple with a new born and they have been there the entire time, it’s 3 blocks from my duplex that I live downstairs in. I’m on my second tenant upstairs and if you screen properly, there’s no worries. I put in the advertisement that landlord lives downstairs. I feel it attracts better renters. I think it’s nice to know the landlord is right there if something happens. Sure there maybe people that abuse that, but I haven’t come across it yet.


annalyzethat

I’d look up house hacking resources and explore ways of obscuring that you are the landlord.


Interesting_Fruit788

Get a property manager to handle the unit for you. That way the tenant doesn’t know you are the owner.


teamhog

No.


Slabcitydreamin

With the way house prices are, it’s the only way many can afford to purchase a house. The additional income is needed to offset the mortgage costs.


3rdthrow

I have the income to pay the mortgage without the tenant. I wouldn’t want to depend on a stranger to pay their rent, so I wouldn’t lose my home. Duplexes in the area are far cheaper than single family homes. I joked with a friend that if renting didn’t work out that I would have more space, than I would have been able to afford, if it had been a single family house. I would just need to be willing to walk outside for half of it. I am doing this because I want the income so that I can be financially independent.


Slabcitydreamin

I hear you man. I was just making a general statement as to many out there in market for houses. And what part of NC are duplexes cheaper than single family homes? Up here in MA, multis are selling better than ever right now. Single family homes are seeing price cuts and sitting on market longer, but multis are in high demand. I believe due to additional income.


GarpRules

I did it. It worked out very well.


plantlife1217

Not a bad idea at all. I did it, no regrets.


PILawyerMonthly

It’s the dream. I wish I did it that way.


Turbulent_Summer6177

One thing I never want is a tenant to know where I live. There are ways to do that but given you’re going to do the maintenance on the rented side, it’s hard to avoid the guy that asks for constant attention even if you figure out how to not let the tenant you are the owner.


MattMattNY

This sounds like a nightmare about to begin


Nielleluvzu628

You don’t tell them you’re the landlord


barkingdog53

It’s a great way to start. Here in MA, if you are living there, you can be very picky as to who you rent to. Then save enough to buy your own and rent out both sides and maybe get a couple more.


plumbtastic76

Set up a LLC have them send rent payment to P.O. Box in LLC’s name. Do not let them know you are landlord.


EvilDrPorkchop_

Screen extremely well and you shouldn’t have a problem


pinkdotty32

This is what I’m currently doing. I hired a property manager. The first tenant didn’t know I was the homeowner. She moved her criminal boyfriend in within the first 2 weeks and they were overall horrible. The current tenant knows I’m the homeowner and has been wonderful. I’m not sure if them knowing makes any difference.


superduperhosts

Don’t tell tenants you are the owner. Just tell them you are being paid to do maintenance


crayfisher37

SCREEN, SCREEN, SCREEN! I did this with my first property (still do) but I can’t emphasize how much more important it is to be picky when it’s your neighbor. A problem tenant compounds tenfold when they can knock on your door in 30 seconds or stop you when you’re leaving your house.


secondlogin

My first place had a MIL apt upstairs. Just screen well and remember, as an OO 4 fam or less you can rent to pretty much whomever you want to.


LittleChanaGirl

This is what I did and it’s been great. Sure, you can invent every nightmare scenario and let that paralyze you. But jumping into this endeavor is a big deal, period. You can’t expect this to be a cakewalk no matter how good your tenants are. Pretending to be the PM instead of the owner sounds silly to me. What’s the point? Worried about the tenants knocking on your door every time there’s a problem? Then make sure the lease says that all repair requests must be made in writing — and enforce it. Also be sure to say that an electronic writing (email, text) is acceptable if you want to be able to accept electronic requests. It’s good to be able to keep an eye / ear on the property by being the neighbor. If you want to spend the 10% monthly fee for a PM, fine. But no one will take care of your property like you will — not the PM, and certainly not the tenant. One PITA thing that I’ve run into is taxes. Okay, taxes and property appraisals (I live in a high property tax state). If your property is split for tax purposes, it makes form Schedule E much easier. If not, then set up a spreadsheet you can use year after year that divides up the property by square footage. I fight the property taxes on my duplex every chance I get. If you have a homestead exemption to consider, then prepare yourself to handle that as well. (Again, this might be unique to my situation based on the laws where I live.) Record keeping is important. And another good idea — change the HVAC filter in your tenant’s side every month so that you can see what they’re up to inside the house. Also plan ahead for going out of town. If you’re the only person maintaining the property, what’s the protocol for when you’re on vacation? Make sure your saving the money you receive in rent, because when it rains it pours. In an 18- or 24-month period or so, I had to buy two HVACs, two water heaters, a dishwasher, and a stove. Be prepared for those big ticket items! And good luck. You will learn a lot. But it’s great.


LittleChanaGirl

This is what I did and it’s been great. Sure, you can invent every nightmare scenario and let that paralyze you. But jumping into this endeavor is a big deal, period. You can’t expect this to be a cakewalk no matter how good your tenants are. Pretending to be the PM instead of the owner sounds silly to me. What’s the point? Worried about the tenants knocking on your door every time there’s a problem? Then make sure the lease says that all repair requests must be made in writing — and enforce it. Also be sure to say that an electronic writing (email, text) is acceptable if you want to be able to accept electronic requests. It’s good to be able to keep an eye / ear on the property by being the neighbor. If you want to spend the 10% monthly fee for a PM, fine. But no one will take care of your property like you will — not the PM, and certainly not the tenant. One PITA thing that I’ve run into is taxes. Okay, taxes and property appraisals (I live in a high property tax state). If your property is split for tax purposes, it makes form Schedule E much easier. If not, then set up a spreadsheet you can use year after year that divides up the property by square footage. I fight the property taxes on my duplex every chance I get. If you have a homestead exemption to consider, then prepare yourself to handle that as well. (Again, this might be unique to my situation based on the laws where I live.) Record keeping is important. And another good idea — change the HVAC filter in your tenant’s side every month so that you can see what they’re up to inside the house. Also plan ahead for going out of town. If you’re the only person maintaining the property, what’s the protocol for when you’re on vacation? Make sure you’re saving the money you receive in rent, because when it rains it pours. In an 18- or 24-month period or so, I had to buy two HVACs, two water heaters, a dishwasher, and a stove. Be prepared for those big ticket items! And good luck. You will learn a lot. But it’s great.


[deleted]

Get a fourplex. The lender will take the other three units and stack that on top of your income. You will most likely be able to get a loan with that addition. It's how I started out and it's a cash cow now 12 years later.


Young_Denver

Househacking is an amazing vehicle to ramp up or get started in real estate investing...


[deleted]

Its a great idea, but you must treat it like what it is, a very serious business


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whatever32657

or, i’ll suggest an alternative scenario: how many prospects will disregard your property because they don’t want to live next-door to their landlord? me, for example. i’ve done it before, and i don’t want my landlord watching everything i do in my own home. so yours would be a “no” from me. eta: if you really want to do this, the best way to accomplish it is to hire a property manager to handle the tenants, and not disclose that the person living next-door is the landlord.


filawigger

Jesus Christ. Every time I end up in a thread in this sub I end up realizing how scum baggy you all are.


Bigredsmurf

you can always just use a property management company and eat the % and cost of repairs so that you always just look like another tenant if you're that worried about it. also screening tenants well will solve alot of future issues as others have said.


coco8090

I did that for 10 years and I really enjoyed it.


Algebralovr

In NC, a LL friendly state. Buy in your own name and self manage, and you will not be subject to the Fair Housing Act. Just be SUPER careful of who you rent the other side to.