All Forum Posts by: Akash Sky

@Akash Sky A bank is a direct lender. There are other lenders (like mine) that don't sound like banks but they actually are direct lenders.  Both banks and lenders make loans. 

A mortgage broker, on the other hand, does not lend money "directly," they don't make loans.  They are like... a shopper who matches you with a lender and collects a fee for their services.  Sort of like how a Realtor finds you a home but they aren't the seller so they don't actually sell the home, they just coordinate the transaction.  

When you get approved, you can ask for a loan estimate - this will allow you to compare what each of them are offering.  

Here is a national ranking of mortgage companies (some are direct, some are brokers) you might find interesting - there are columns that show how long they've been in business and what percentage of business was retail (ie; working directly with clients):  http://www.scotsmanguide.com/Rankings/Top-Lenders-...  

hello @Akash Sky. Multi-Family is great! Unfortunately, it has gotten very difficult to find cashflowing buildings in South CA. I am sure they are out there, but competition is very tough and many investors are paying cash for these things. I help and show people how to use some of their savings to create streams of income by purchasing cashflowing assets. All of my units are in the east coast. Would be happy to chat some more! Talk soon

@Akash Sky I'm originally from SoCal and still have a couple of properties in the area (Santa Ana). What everyone is saying is true, The only properties I've found that cash flow are in areas like Santa Ana (in Orange County), Compton, Southgate, and Watts, etc..In LA County. I recently looked at small Multi Family deals in Inglewood and Hawthorne that were barely cashflowing, and I mean barely. I can afford to look in Class C- and D areas because I don't live in the properties, since you'll be living in one of the units only you know if living in a Class C- or D property/area

Everyone is both right and wrong here. SoCal is tough, true. It's different, also true. But you can cash flow. Sure it's not going to hit any 1 or 2% rule and it definitely won't be sexy with an FHA purchase. But I manage 229 units here and every single one cash flows, right out of the gate. And while it's tough and getting tougher, and expensive, let's not forget the positives: Basically zero vacancy with a little hustle, consistently strong price and rental appreciation in the good years, great weather, plus we have Disneyland. Can't forget that.

Matt

Hi @Akash Sky. Congratulations on getting started on your investing journey! I've been trying to do the same as you - purchase a 3-4 unit property in the North OC or Inland Empire area. What I'm finding in the OC market is there is a lot of competition among investors here who are willing to purchase at a high price that doesn't cash flow by BP standards, either because they are betting on appreciation, tax benefits, or are able to afford to pay cash (among other reasons, these are just my guesses). 3-4 unit properties in the area are routinely selling for $700k-$1 million+, with multiple competing offers after only sitting on the market for a few weeks to a month. When running my analysis of these properties, which assumes purchasing with an FHA loan, 5% down, 3.25% interest, and maintenance/repair expenses (including CapEx, property tax, vacancy, insurance, and management) of approximately 40% of rental income, they simply don't cash flow at that price.

What makes California different from most of the country is that our market is very cyclical. We're at or nearing the top of our market right now (in my opinion), so prices will hopefully come back down in the next few years. Once prices recover again, they'll likely rise above the price they're at now, so although we go through cycles, we almost always cycle upward in the end. Therefore, people feel more comfortable buying for appreciation here than in other parts of the country. I still don't recommend it, though, because appreciation is never a guarantee, even in Southern California. 

All this said, I haven't expanded my search past the MLS yet (that is my next step). You may be able to find a good deal on the MLS here or there, but they have been few and far between in my experience. The real deals will be off-market, so you'll need to get creative in how you find them.

Best of luck to you! You're on the right path. Don't let our challenging market discourage you =] There are deals to be had every where, at every point in the market cycle. You just gotta look in the right place.

@Akash Sky  I can set you up to receive properties in Orange County, but unfortunately reality is that you may NOT find anything that will cash flow unless its in a D area.  Is there a reason that you picked multi-family?  California is very different from the rest of the country when it comes to investing due to pricing.  

Good investing...

@Akash Sky Brandon's book on No and Low Money Down really helped me figure out how to finance my first deal. And books like Rich Dad Poor Dad and You Are A Badass are keeping me motivated to move forward with my plans every day. You have to be tenacious in this business. Set a real solid goal for yourself. 

Also, complete your profile or people won't take you seriously. 

Good luck!

Here are 20 books to check out and there's one in particular that covers multifamily properties.

https://www.biggerpockets.com/renewsblog/wp-conten...

And I highly recommend listening to every BP podcast, even the ones you think aren't going to be relevant. There's always a good tid bit about strategies that relate to all types of investing.

My favorite was the one by Frank Gallinelli - What Every Real Estate Investor Needs To Know About Cash Flow. Use this to construct your own APODs for deal analysis.