Apartments for Low Income

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Your Questions About Duplex Plans

October 31, 2012

Thomas asks…

Restroom vs. Dining Room/Nook for new duplex?

I want to build a duplex but can’t find a plan with all my needs. One has 2 bathrooms per unit but no place for dining. The other has 1 restroom but a separate dining room. Also one of them has better curb appeal. What is more important to have— a place for dining or 2 restrooms? I can get custom prints but it would be more costly.

Administrator answers:

The average number of children per Jewish household in Israel is apparently 2.2 , so where are you going to put that extra 1/5 of a child? In your half room, of course!

No, not really. But today I want to post quickly about something that mystified me before I came to Israel– how Israelis calculate room numbers in apartments.

In the US, our current apartment would be considered a two-bedroom apartment, because… Well… It contains two bedrooms. Simple enough. Here, though, it’s considered 3.5 rooms. The living room (but not the huge kitchen) counts as our third room, and the little nook in the picture above– officially a “dining nook” or pinat ochel, but for me it’s an office– as a “half” room. Our closed balcony, which we actually use as a dining room, and the separate toilet room and bathroom, and the “michpeset shirut” where we have our washer and dryer– none of those count as rooms either. Nope, this apt. Boils down neatly to 3.5 rooms, and that’s that. (Btw, this means that a “one room” apartment in Israel is an efficiency, containing ONLY one room. Plus maybe a bathroom or balcony or kitchen.)

In about a year we’ll start looking for an apartment or house to buy, and already I’ve been lusting over real estate and figuring out some more oddities of Israeli terminology. For example, a “cottage” (that’s actually how you say it in Hebrew– ‘????) means a house attatched to another house… Which in the US I’d tend to call a duplex. A “duplex,” on the other hand, which is also a term used in Hebrew (??????), means a house or apartment with two stories. Then there’s the difference between a “villa” and a “bayit prati,” which I still don’t understand. Except that maybe a villa is bigger.

Oh, and an Israeli “first floor” apartment is actually on what would be the second story in the US. (The ground level in our building contains parking and storage lockers.)

Check out Israeli real estate listings here, if you’re interested!

The moral of this post? Don’t assume that you know what terms mean– just because words sound like English doesn’t meant that they carry the same meaning.

P.S. Yesterday, for the first time, over 100 visitors came to this blog in one day! (We’ve been right up at about 90 visitors for a while.) That’s so exciting! Thanks, everyone! Oh, and er, don’t ask me how many of those visits were me checking back. I’d prefer not to know. ;)

Mary asks…

How can i get information on starting a daycare in dayton ohio on the internet? are theur sites on the web?

I plan to move to Dayton Ohio in the summer of 07 and i would like to get started on the daycare process now. i plan to buy a duplex and run a daycare in one of them and live in the other.

Administrator answers:

Starting a daycare seems simple at first. Then you realize the licensing regulations. Anyway, your idea of a duplex is a terrific idea.

Below I list a site that includes a lot of information on starting a daycare including links to your individual states licensing regulations. What you need is a plan like the one on this site. It includes forms, business letters and a complete business plan.

Lizzie asks…

is this a good plan for getting my first duplex?

Okay i got a job that pays no tax, 12 bucks an hour, if i work at it 40 hours a week ( if they let me ) i could have 10 000 dollars by feb 1st, now with that 10k i can get a mortgage and buy a duplex, and let the tenants pay the mortgage for me ( i’ll screen the tenants through the wazzu ), so if i rent it out for 1200 each month ( 2 sides of the duplex, so 600 each ) and my mortgage is 1200 bucks, or maybe even 800, thats 400 bucks i pocket, i can save it all of it so just in case the place is vacent, or the tenents wreck my place up, i have money to help me out. Mean while i’ll just keep working my job, living like a regular guy until i get another 10, 000, then i can get another mortgage? Can anyone give me some advice?

Administrator answers:

The housing market at present is ripe for the picking. You need to do some research on different markets and maybe focus on an area close to you to begin with. At present it is possible to pick up a property for $10,000 or less. Also make sure that you know all your costs its not just the mortgage but plenty of other costs as well. It is a big advantage if you have a pre approved mortgage not an easy thing with the state of the banks at present. You have the right attitude so don’t give up. Good luck.

David asks…

What process is involved in buying a duplex?

I am planning on buying a duplex and in my area they go anywhere from 140-160. I just started my first full time job out of college and i’m making a base salary of 45000 but I make about 70000-80000 with overtime. I have 15000 saved up. Is that enough money for the down payment if I was to pay the max of 160? I am planning in living in the first floor apartment and renting out the second floor apartment. Is 15000 enough to cover down payment and settlement and all other fees? My goal is to keep the mortgage payment under 1000.

Administrator answers:

Since you plan to reside in the duplex, your purchase would be considered an owner occupied property. Therefore your interest rate and down payment would be as if you were purchasing a single family property.

If you were to finance this property through a FHA mortgage loan your down payment would be approximately 3.5% down. You would want to use the minimum down payment.

The $15,000 you have saved would be sufficient for the down payment and other closing cost. When you make your sale offer make sure you indicate, you would want the seller to pay all closing cost. Though the seller might not agree to pay all the closing cost, it would require him/her to make a counter offer as to what closing cost they would be agreeable to pay.

You would use the same procedure as anyone buying a house Your next step would be to check with a mortgage lender to see about applying for and getting pre-approved for a mortgage loan.

Make sure the mortgage lender you select would be authorized to do FHA mortgage loans. You would be required to show proof of income with documents such as pay tubs, W-2 forms and federal income taxes.

The one concern I would have is the fact that you have indicated you have been employed for one year. This could be a potential problem with qualifying for a FHA mortgage loan. A larger down payment might be a compensating factor in some instances. You would want to pay the least amount down payments as possible. Keep that in mind.

With the rent you would be getting from your tenant, your out of pocket mortgage expense should be approximately $500 or less.

I hope this has been of some benefit to you, good luck.

“FIGHT ON”

Mandy asks…

80/20 ARM Loan HIGH RATES on a duplex 20yr old investor Am I screwed? Plz Help!!?

I am 20 years old from washington, I managed to get a loan and buy a duplex w/$0 down 80/20 Arm loan 80@7.5% 115,000 and 20@11.5 32,000 Yes rates are very high but w/ 0 down and no assets I had to take what I was given. My question is I want to buy more properties. I will be paying interest for the first 2 years and I have no extra money to pay extra on top of my minimum payment. I am losing money rents out both units@$1125 + $115 water +75 add to mortgage payment so I’m losing $190 a month, I cannot raise rent it’s already up there. I cannot refi for atleast 2 years. I bought the duplex for 147,000 (including closing costs). It’s been appraised at only 148,000 so I bought it at top dollar. Lol I am 20 come on =). I’m curious should I just sell in 2 years and walk out? Since rates are going up I cannot afford paying my bills plus property additional bills. Both tenants are planning to stay for atleast 2 years. Any suggestions/comments deeply appreciate! Thanx!

Administrator answers:

You knew going in what the situation was, so you must have prepared yourself in some way to make up the difference between expenses and income.

Instead of going out and getting a new loan on another property, find one that the owner is willing to finance and make sure you are going to cash flow positively. That will make the burden of the negative cash flow from the duplex more palatable.

I wouldn’t be thinking about selling in two years. I would be thinking about 5 years. Rents are in the process of going up (traditionally they increase at about 4% annually) and it won’t be that long until you break even. In the interim, renters are paying off your mortgage and you are building wealth.

One thing you might think of is adding additional profit centers if possible. Are the renters willing to pay extra if you provide a washing and dryer? Or you could get a coin operated one put in and split profits with the operator.

If one of your tenants decides to move, perhaps you should take one of the apartments and live in it yourself.

You are young and real estate is forgiving in the long haul. Time is on your side and you will come to see that this investment will work out.

Think about refinancing in two years if the rates don’t up dramtically and you will save money.

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