All Forum Posts by: Arlen Chou

@Avery Lanman you left 2 pieces of crucial information out: how much equity do you have in the property and what are you planning to buy? You have a killer rate, it is literally free money, you should consider protecting that and getting a HELOC on the property to pull cash out. Pull the money out of the HELOC and stick it in a high yield account for 3 months to season it and then go after a rental property. You will technically be cash flow negative for the few months while you hold the cash. But after the funds have been seasoned, and assuming your DTI looks good, you will be in good shape to go after a loan for that investment property.

@Mark Vandzura there is a reason that the SF Bay area housing prices are so expensive, it's a great place to live. The diversity of the area, the weather, and proximity to nature are second to none. You can find first-rate restaurants that represent cultures from across the globe. Yesterday, I snowboarded in the morning, did some wine tasting on the way home and had a "real" Japanese meal for dinner. My kids go to school with children from all over the globe: Russia, China, Latin America, etc. There are multiple first-tier universities in the area. On average, my rental real estate has appreciated 2x in 5 years. The list of reasons that attract people to the area is extensive. But again, all of those reasons make the area expensive to live in... but that is also how capitalism works.

@Natalie Hahn the HELOC is a great tool for them. As your parents pay it off, it will remain as available credit for them for future purchases. As @Jairo Ortega had mentioned, the can use the money from the HELOC to fix up the 3rd property and rent it out. Once it is fixed up, the could also place debt on that property and build up their war chest. I personally would not try and max out the LTV. I am not sure if your parents are retired, but if their active income is not great, having too much debt could be very dangerous for them.

They should probably get out of that condo ASAP.  If they are actually claiming the income for that unit as a rental then they could do a 1031 exchange and differ any appreciation gains. I am not an expert in the 1031 process so please seek out the advice of a specialist.

@Andrew Frank this sounds like a very bad situation. How did people not on the lease end up living there? Where you aware of this while it was happening?  Did you not have a clause in your lease with the ORIGINAL tenants that something like this is not allowed? At this point, if it sounds like the original tenants have been gone for a long time so my question is more to understand how this happened than anything else. I believe that by accepting their rent checks you have inadvertently acknowledged these people as your NEW tenants. So I don't think you can evict them for NOT being on the original lease. You probably need to create a new lease based upon the original lease you had with the previous tenants and get the new people to sign.  You should definitely reach out to a local attorney that handles these types of issues and get some guidance, but I don't think eviction is going to be possible unless you have "just cause".

@Priscilla Cheng one thing you need to consider is the tax ramifications of your choice.  As an example, if you are planning to live in CA, you probably do not want to buy anything in Texas.  The market is great, but the property taxes will kill you AND you will need to pay CA income tax on what you make in Texas.  

@Debbie C. it is very difficult to give advice on this topic without knowing your reason for wanting to sell. Also it is important to understand the timeline you want to follow. You should consider your NET profits and also your timeline before making any decision. Your agent will want to sell at the highest possible price because his/her commission is based upon that. Is your agent a personal friend or somebody that was referred to you?

In your analysis you should also consider that your taxes could POTENTIALLY be higher if you do a new build.  Also do you have a place to live during the building process?

As for the construction of a new house, it really depends on the finishes you choose and the size of the completed project.  Typically you would base an ESTIMATE on a dollar/sqft basis and then go from there.

What city is your home? Are the sales prices you are seeing based on existing homes or new homes?  There are a TON of questions that really need to be addressed before you make a big decision like this. 

@Michael Kay welcome to BP. I am not sure if it is too late to get tickets, but there is a big 2-day summit happening this weekend hosted by

@J. Martin 

@Alex Pelin there are 5 or 6 unicorns that are scheduled to break out this year, like Uber and Lyft.  If history is any indicator, if these companies do IPO this year, there will be an uptick of buyers.  However, if they do IPO at the end of the year it might push the buying pressure into 2020.

@Reggie Wirjadi there are still plenty of ways to make money in the Bay Area. For specific SF strategies, I think @Amit M. can off great insight into that specific market. 

@John Swiger it is a little hard to say without knowing either your current household makeup and more about the location of your mothers home.  However, the 10k foot level answer would be to turn her home into a rental and have her move in with you in Austin. The other option would be to sell her house and have her move in with you. You probably already know that those 2 options make the most sense, but you probably don't really want to live with mom, which is totally understandable.