San Diego, CA · Member since 2017 · 61 posts · 20 votes
hello, my mother-n-law had some issues with her house and the insurance company put her up in a multi-family dwelling. She told me the seller had the place listed at $650,000 (San Diego) but recently dropped it down to $609. I'm wondering what options may be here. I'm thinking a couple options. I should find out if it's paid off and perhaps do seller financing or subject to. There's also the option of setting up a wholesale here. I'm not sure about that because I'm unfamiliar with the ARV for multi-family dwellings. Im open up to some suggestions and guidance. Thank you for your help.
Developer · San Diego, CA · Member since 2015 · 1k+ posts · 1k+ votes
9y
@Nicholas Baughman Are you convinced it's an attractive investment at $609k? What's the gross rent multiplier at current rents? Market rents? If a buyer put down $180k to buy it, how much would they earn in the first year of ownership on that cash investment?
Only after you establish that it's a potentially good investment does it make sense to think about how to optimize the opportunity.
San Diego, CA · Member since 2017 · 61 posts · 20 votes
9y
Excuse me for me naïveté. It's been a long time since I've taken real estate courses. I'm also just getting started on the investment side. I've been researching as much as possible before making the jump. I don't recall on how to calculate the rent multiplier. The house is off market. It is all one unit but separated from downstairs and upstairs, and some studio looking thing in the garage. I believe the comps in the area are around $675k. The owners are using it more like a bnb or airbnb. The monthly rent for the entire thing is around $5k. It's possible the top is $3500 and the bottom is $1500/m. I thought it was on the market but I got it confused with another place. The log book looks like the last visitors were in November. So they may not be renting it out as much as they like. If this was a promising deal, would I contact the owners and see if they'd be willing to sell? What's the best option for assignment in this situation? How would you go about contacting the
And saying, "hey, do you want to sell this place?"
Lender · San Diego, CA · Member since 2011 · 664 posts · 231 votes
9y
Yes, I'd start by asking the owners if they want to sell, otherwise you're spinning your wheels. A simple question like, "Hey, my mom stayed at your place and heard you were trying to sell it, is that true?" Then take it from there. May or may not be deal but you need to start there first, IMHO.
Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
9y
if the last visitors were in November it currently is not cash positive. Also watch for unpermitted work as most garage conversions are not permitted.
One BR units are significantly less valued by investors than 2 BR. It is in part that you will be managing a unit with a lower rent potential. The size of unit has less to do with the effort managing the unit than the number of units.