If you own a multifamily investment property which you are renting out to 2 or more tenants, you’ll probably be disappointed to find out that there’s only one water meter (provided by the city) to the entire building located underground under the sidewalk. Following are some scenarios on how water pipes reach each unit and how to possibly measure each unit’s water usage.
Separate cold water pipes
Even though there’s only one water meter under the sidewalk, it’s possible that the downstream water pipe after the meter branches into multiple pipes, one for each unit, thereby creating multiple cold water networks If this is the case, then you’re in luck and you can install a water meter, e.g. Badger Model 25 or Neptune T-10 at each branching water pipe.
Shared cold water pipes, separate hot water pipes
If the cold water pipes from the city’s water meter go to all units in a shared manner, then it would be very difficult to measure water usage by unit. However, if each unit has its own hot water pipes that are not shared with other units, which would be the case if each unit has its own hot water heater, then you can measure hot water usage by installing a water meter at the cold water inlet to or the hot water outlet from the water heater.
Billing each unit for water
Usually there will be one water bill for a multifamily property. Since there are multiple tenants, you’d need to fairly split the bill among them based on each unit’s water usage.
Based on headcount
If both hot and cold water are shared among all units, then one common method is to bill each unit proportionally based on headcount (number of occupants). If one unit has twice as many people living in it as another, then that unit would pay twice as much for water. Of course, headcount can change over time so this would need to be updated whenever there is a change.
Based on hot water usage
If cold water is shared but hot water is separate, then you can split the water bill proportionally based on hot water usage. This would be more accurate that going based on headcount.
Water meters
Following are some popular water meters for residential use.
Badger Model 25
This meter has plastic threads and costs about $100.
The water meters above are manual read meters. To measure water usage remotely and see usage over time, you can buy a smart water meter. One of the best ones is Flume 2.
Flume 2 Smart Home Water Monitor
This smart water meter does not require plumbing as it is just attached or strapped around a compatible water meter. It costs $200.
The Flume water monitor just straps onto an inline water meter. It reads the magnetic field generated by your water meter, which the company says can detect any water usage all the way down to one one-hundredth of a gallon — i.e. a slowly dripping faucet.
Many, if not most, people aren’t experienced with buying and selling a house. For that reason, they hire a real estate agent. However, once you’ve bought one or two houses, you’ll realize it’s not that hard. 50 years ago, when online MLS sites like Zillow didn’t exist, having an agent find a house for you was useful. However, nowadays, buyers can get notified instantly when a house matching their criteria comes on the market. This reduces the value of having an agent. Furthermore, in California, real estate agents get a 3% commission. Even though this is paid by the seller, in certain situations the buyer pays by having to offer a higher purchase price. By buying a house without an agent, the seller doesn’t have to pay 3% commission to a buyer’s agent which means you can offer a lower purchase price than other buyers who have an agent. For a $500,000 house, this can save you $15,000.
Below are steps to buy a house without an agent.
1. Get a pre-approval letter
Assuming you will be borrowing money to buy the house, as for most people, you need a pre-approval letter. This is for 2 reasons:
Find out how much of a house you can afford
Prove to the seller you can actually afford to buy their house
To get a pre-approval letter, you can submit an application to purchase a home on Zillow Home Loans. You can do the same at LoanDepot.com which is reportedly the second-largest non-bank provider of direct-to-consumer loans in the United States. Another option is to compare lenders based on interest rate offered. By filling out some information on Zillow’s Mortgage Rates page, you’ll be presented with multiple lenders and interest rates. You can then pick a lender, get in contact with them, and ask for a pre-approval letter at the rate they advertised. Here’s an example pre-approval letter.
A pre-approval letter is different from a prequalification letter. With a pre-approval, your financial situation is verified and your credit score is checked.
2. Search for a house
The easiest thing to do is search Zillow. You can also search Redfin, Trulia, and official MLS websites.
Appraisal
Note the automated estimates, e.g. Zestimate and Redfin estimate. They will give you a good idea of the value of the property. However, don’t assume they are correct. Sometimes, their algorithms use uncomparable properties to determine value leading to incorrect values, e.g. comparing a multifamily property or condo to a single-family property. You can see the properties each website uses to determine a particular value. If they don’t make sense, you can calculate the price per sq ft of similar properties recently sold and come up with a more accurate estimate. See an example. Based on the pictures, neighborhood and estimate, think of how much you’d pay for the property.
Tips
See my post on house-buying tips to learn more about certain things to watch out for.
RPA – California Residential Purchase Agreement and Joint Escrow Instructions – 4 Pack
This form is the main form used for making an offer. It includes
(AD) Disclosure Regarding Real Estate Agency Relationship
(BIA) Buyer’s Inspection Advisory
(PRBS) Possible Representation Of More Than One Buyer Or Seller
(WFA) Wire Fraud Advisory
Price
$170.98 (CAR Member Price)
$341.95 (CAR Non-Member Price)
Other useful forms
TDS – Real Estate Transfer Disclosure Statement The property disclosure statement is required by law in most residential sales transactions in California. It includes Seller’s mandatory disclosure of specified items and any known adverse material conditions, as well as sections for Seller’s and Buyer’s agents to comply with diligent visual inspection requirements.
BCO – Buyer Counteroffer Counteroffer form to be used when a buyer initiates a counter offer.
SCO – Seller Counteroffer Counteroffer form to be used when a seller initiates a counter offer.
WOO – Withdrawal of an Offer This form is used to revoke an offer or counter offer before the document has been accepted.
Important Terms of Purchase Offer
The standard California residential purchase offer form is written to protect buyers by default. Following are some key clauses.
You will submit the purchase offer to the seller’s agent or, if it’s an FSBO (for sale by owner) listing, then to the seller directly.
Since you are submitting your purchase offer yourself without an agent, you should make it clear that your offer will not require the seller to pay a commission to a buyer’s agent. For a 3% rate, the seller could save $15000 on a $500,000 purchase offer. Below is an example cover letter for this purpose.
Note to Seller:
This offer is from a buyer with no agent. I (the buyer) am representing myself. As such, acceptance of this offer by you (the seller) would save you from having to pay a commission to a buyer’s agent. Since my offer is for $390K, assuming a commission rate of 3%, my offer would save you $390K x 3% = $11,700, and your total commission expense would only be $11,700 to your own agent (seller’s agent). Your net proceeds (excluding other expenses) would be $390K – $11700 = $378300 as shown below.
My Offer
Commission to Seller’s Agent
Commission to Buyer’s Agent
Seller’s Net Proceeds
Purchase Price
3%
0%
(excluding other expenses)
$390,000
$11,700
0
$378,300
If there is another offer above $390K but below $403K and that offer includes a buyer’s agent, then you’d have to pay 6% commission (3% for each agent). In this case, my offer will net you higher proceeds as you can see from the table below.
Other Offers
Commissionto Seller’s Agent
Commission to Buyer’s Agent
Seller’s Net Proceeds
Purchase Price
3%
3%
(excluding other expenses)
$391,000
$11,730
$11,730
$367,540
$392,000
$11,760
$11,760
$368,480
$393,000
$11,790
$11,790
$369,420
$394,000
$11,820
$11,820
$370,360
$395,000
$11,850
$11,850
$371,300
$396,000
$11,880
$11,880
$372,240
$397,000
$11,910
$11,910
$373,180
$398,000
$11,940
$11,940
$374,120
$399,000
$11,970
$11,970
$375,060
$400,000
$12,000
$12,000
$376,000
$401,000
$12,030
$12,030
$376,940
$402,000
$12,060
$12,060
$377,880
$403,000
$12,090
$12,090
$378,820
To conclude, my offer of $390K will net you a higher profit than any other offer up to $402K.
5. Do a home inspection
Inspections aren’t usually required by your mortgage lender, but they can reveal hidden issues that the seller might not know about. A typical home inspection covers surface-level elements of the home, including its plumbing, structure, heating system, and more.
You can search for home inspectors on Zillow’s website or Google.
Expect to pay at least $400 for a home inspection from a reputable company on an average 2,000-square-foot home.
If the inspection reveals an issue with the home, there are a few ways you can negotiate with the seller.
Ask For Repairs You can ask the seller to repair any problems with the home before closing.
Ask For Reimbursement You can ask the seller to reimburse you for the cost of repairs. This guarantees that you’ll get work from a quality contractor because you choose the professional. However, you might have trouble getting a seller to agree to pay a bill if they don’t know how much it will be.
Ask For A Discount You can ask the seller for a reduction of the sale price if there are significant repairs that need to be made.
Cancel The Sale If you can’t reach a solution with the seller and the issues are a deal-breaker for you, you can always cancel the sale.
7. Finalize financing and close
When you reach an agreement with the seller, it’s time to close on the loan.
Appraisal
Your lender will likely require you to pay for an appraisal. You’ll pay up to $500 and the lender will choose the appraiser. They do this to protect themselves so that if you default on the loan, they can reduce their losses. The appraisal report will also protect you so that you are not overpaying for the property. If the property isn’t worth what you’re offering, you can negotiate to lower the purchase price. Or, you can put a larger down payment if you really want the house.
Your lender will first give you a loan estimate. As soon as the appraisal and underwriting are cleared, your lender will send you a closing disclosure. Your loan estimate and closing disclosure tell you about the terms of your loan, your closing costs, your interest rate, and more. Compare the loan estimate to the final closing disclosure to ensure everything is as expected. If everything looks good, contact your lender and schedule your closing. The examples below are for a refinance but they are similar for a purchase.
Zillow provides housing and rental market data on the Research page. Using this data, I created the table below that shows the top 100 most populated cities in America along with their typical house value and monthly rent cost. GRM stands for Gross Rent Multiplier. GRM = Property Purchase Price / Annual Rental Income. It gives you an idea of how many years it will take for your rental income to pay for the cost of the property. It’s often used to compare investment properties. For example, if you buy a triplex for $490,000 and your monthly rental income from the 3 units is $3400, then
GRM = $490,000 / ($3400 x 12 months) = 11.3 years.
Note:
Houses in Texas are cheap but property taxes are some of the highest in the country. But then again, Texas has no state income tax.
Houses in Florida are cheap but the weather is humid and there are often hurricanes.
Chicago is cheap but it gets very cold during the winter there.
The weather is California is GREAT but houses are expensive.
Modular and therefore can add modules that offer different / better features
HDR (high dynamic range) for better image quality
More advanced desktop editing software
Cons:
Modular and therefore can be a hassle to have to switch modules, especially quickly in order to capture a moving target
GoPro Max
Pros:
Easy to use without having to assemble modular parts
Cons:
No HDR (high dynamic range)
Desktop editing software not as powerful as the Insta360 Studio
Insta360 One X2
Pros:
Small
HDR (high dynamic range) for better image quality
Ricoh Theta SC2
After testing the GoPro Max, Insta360 One X2, and the Ricoh Theta SC2, it clear that the Insta360 One X2 is the better camera.
Virtual Reality / 3D Panorama Software
Marzipano
Marzipano is free and open source. You can use the Marzipano tool to quickly upload 360 photos and then download a complete website with all code to host yourself. However, you can only zoom out so much as shown in the screenshot below.
Kuula
Kuula lets you upload 360 photos and embed a 360 viewer of your photos on your website. You can also zoom out much more than with Marzipano as shown in the screenshot below.
You can then take a screenshot of the zoomed out 360 photo which doesn’t show very warped and curved lines.
Metareal
Metareal is a great alternative to MatterPort. You can create floorplans as well and pay a nominal fee to have Metareal convert your 360 photos into virtual tours for you.
Photoshop
In Adobe Photoshop, you can import a 3D panorama photo
In the lower left corner, when you have the white grid enabled, you will see orbit, pan and dolly buttons to move the image around.
Under Properties, you can adjust the Vertical FOV (Field of View) to zoom in and out.
GoPro Player Desktop App
The GoPro Player desktop app will also open 360 photos and let you rotate and zoom in and out. But, unlike Photoshop and Kuula, you’ll get a fisheye view as shown below.
Google Photos Mobile App
The Google Photos mobile app has a Panorama feature but you have to move your camera horizontally or vertically to capture create the panorama. It’s not a full 360 degree panorama but it does support scrolling in Google Photos.
Insta360 Studio
The Insta360 Studio desktop app is definitely better than the GoPro Player desktop app. It’s got more features and is intuitive to use.
It is January 2, 2021 and the previous year has surprised everyone. Analysts predicted home prices to fall due to the global Coronavirus pandemic but in the US, home prices surged despite millions of Americans losing their jobs.
At this time, the cost to rent an apartment in Hayward, California is
~$1600 / month for a 1 bedroom apartment
~$1800 / month for a 2 bedroom apartment
Now, let’s see how much it costs to buy a house with the following assumptions:
Buyer credit score is 680
Buyer has never purchased a home before
The top half of the table below shows 4 different loan scenarios.
Conventional loan requiring a 20% down payment and a purchase price of $300K
FHA (first time home buyer) loan requiring a 3.5% down payment and mortgage insurance for a purchase price of $200K, $250K, and $300K
At this time, Zillow indicates that one with a credit score between 680 and 699 can get a 30 fixed rate mortgage for 3%.
For a conventional loan of house costing $300K, if one has $60K for the 20% down payment, their monthly mortgage including principal, interest, taxes, and insurance (PITI) would be $1287. This is far below the the cost to rent a 1 bedroom apartment in Hayward, CA.
For the FHA loan, one would only need a 3.5% down payment but they’d have to pay mortgage insurance. The total monthly mortgage-related expenses (PITI) are
$1155 for a $200K purchase price
$1405 for a $250K purchase price
$1732 for a $300K purchase price
These costs are all lower or equal to the cost to rent in Hayward, CA. The problem, however, is house prices in Hayward are very high. The closest large city with house prices between $200 and $300K is in Stockton, CA, e.g.
Now, just because the monthly mortgage expenses are lower than the cost to rent, that doesn’t mean one would qualify for a loan. Lenders require
mortgage expenses (PITI) to be no more than 28% of one’s gross monthly income before taxes
total debt (including mortgage expenses) to be no more than 43% of one’s gross monthly income before taxes
The bottom half of the table below shows different income scenarios as follows:
Having a gross annual income of $46K and buying a single family home
Having a gross annual income of $46K, buying a duplex and renting one unit out for $1200 per month
Having a gross annual income of $60K and buying a single family home
Having a gross annual income of $60K, buying a duplex and renting one unit out for $1200 per month
Having a gross annual income of $75K and buying a single family home
In these scenarios, we find that:
If you have a gross annual income of $46K and
you buy a single family home, then your maximum mortgage expenses can be $1073.33. In this case, you can buy a house for $200K (yellow cells)
you buy a duplex and rent out one unit for $1200 per month, then your maximum mortgage expenses can be $1409.33. In this case, you can buy a duplex for $250K (green cells)
If you have a gross annual income of $60K and
you buy a single family home, then your maximum mortgage expenses can be $1400. In this case, you can buy a house for $250K (green cells)
you buy a duplex and rent out one unit for $1200 per month, then your maximum mortgage expenses can be $1736. In this case, you can buy a duplex for $300K (blue cells)
If you have a gross annual income of $75K and
you buy a single family home, then your maximum mortgage expenses can be $1750. In this case, you can buy a house for $300K (blue cells)
But Stockton is too far from Hayward!
Assuming you currently live and work in or around Hayward, then it’s true that Stockton is a bit far. According to Google Maps, it’s about a 1 hour drive in no traffic between the two. However, according to this article, many people who work in the Bay Area can no longer afford local housing and have moved to Stockton and commute.
What if I save money and buy a house later?
If you make $46K a year and rent an apartment for $1800 per month, you probably won’t have much left over to save. And, even if you could save $100 per month, house value appreciation could outpace your savings. When you buy a house, some of your monthly payments go towards paying down the principal on your home loan. That, in effect, is a form of savings (pink cells in table) but in the form of equity in the house rather than cash in the bank. After a few years, your wealth could grow in 2 ways:
Appreciation of house value
Equity in paying down the principal on your home loan
You could then potentially sell the house and use the proceeds to put 20% down on another house thereby reducing your monthly mortgage payments even further.
What if the house value drops?
According to this article, recessions typically occur around every 10 years but they don’t necessarily cause house prices to flatten or drop. Housing busts typically occur every 18 years. The last housing crisis was in 2008 so the next one may occur in 2026 (5 years from now).
House Value Trends
Using data from Zillow Research Data, we can create a custom graph showing house value trends like the one below.
Similarly, we can chart the rent cost over time. Below is an example using US and Stockton, CA rents.
Assuming you have 3 bedroom, 2 bathroom 1100 square foot investment property, following is a breakdown of costs to remodel it relatively cheaply and quickly using neutral colors.
Floor Plan
Using Live Home 3D, this is an example of a 3 bed, 2 bath, 2 car garage house. The kitchen is U-shaped. The bedrooms are almost all the same size. Two of the three bedrooms have walk-in closets. The laundry is central to the house. There is a small patio next to the kitchen and living room.
If you go to Google Translate, you can not only translate text from one language to another, but you can also listen to the translation. For example, this English to Chinese translation allows you to listen to the pronunciation of the Chinese text.
Google’s Cloud Text-to-Speech API allows you to programmatically generate mp3s of any text. Below are steps to do it on Windows using PHP.
When you follow the steps above, you will download a JSON file containing your credentials. You need to set an environment variable by opening a command prompt and entering
set GOOGLE_APPLICATION_CREDENTIALS=path-to-json-file
You can then verify it is set by typing “set”.
That environment variable is temporary and will persist for the duration of the terminal session. To set the environment variable permanently, follow these steps.
Composer will need a php.ini file. If one doesn’t exist, it will create one.
4. Update php.ini
To ensure your SSL certificates are up-to-date, download the latest cacert.pem from https://curl.haxx.se/ca/cacert.pem. Then, edit php.ini as follows:
curl.cainfo=”/path/to/downloaded/cacert.pem”
5. Create PHP Script
Copy and paste the example code from the instructions in step 1. This is a PHP script so wrap the code in <?php … ?>. Save it as test-text-to-speech.php somewhere.
6. Run PHP Script
At the command prompt, verify the Google environment variable is set and then run the PHP script. If PHP is in your path, you can run, for example,
This will output an audio file (output.mp3) in the same folder. By default, the text is “Hello, world!” and the language code is en-US. You can change the text to Chinese, for example: 这是一个测试 and change the language code accordingly to cmn-CN. Then, you’ll get the same speech as what you hear in Google Translate.
