All Forum Posts by: Arlen Chou

@Mike Wilkinson it really depends on what your competition is doing. If everybody else has them and people in your market expect it, then people might be slightly turned off. $1000 is so little compared to your asking price. If the comps have them and the work is not hard to do, you might want to do it...

@Jarrin Benson read your post and you will find your answer...

• I'm really attached
• it's just that perfect mix of everything
• It fits my goal criteria for my next home purchase
• This house fits within my goals

People regret the things they did not do and say they wish they had done "X" when in the twilight years of their lives.  They tend to look at negative things they did as a "mistake" or a "learning experience". 

30 years from now, if you don't get the place will you see it as a regret?  

30 years from now, if you buy the place and it takes you a little longer to get your cash flow, will you see it as a learning experience? 

Not sure how old you are, but I am pretty sure that you are young enough to make more money over the next 30 years. 

And really, what does "lived a little more" really mean? More than what? You cannot compare the road you are on to a road that you will never travel. Just make a decision and don't look back. You are making an emotional decision, not a business decision.  Perhaps that is the problem, but only you can decide if your business side will prevail against your personal side. But again, from your own words, it sounds like your personal side is winning.

@Gaurav Mehta that seems like a lot of work for just 2 rentals... but assuming the numbers work here are a few things to consider:

1. Oakland is pushing to impose an additional tax on vacant lots. I am not sure how they will enforce this, but there has been some news floating around about this topic that you might want to research
2. The cost per sqft number you are using seems crazy low. Keep in mind that contractors are in HIGH demand right now. All of the fires in the north bay have pulled many of the second and third tier guys away from the area to build new homes.
3. The timeline also seems extremely aggressive. But I am not sure if you just mean the physical build or design to completion as your time reference. 

For all of the time and effort that you will undoubtedly spend on a project of this size, I really think you are better off finding an existing property. The discussion would be different if you were going to build them and sell them off as condos or as a duplex.

Good luck,

@Robert Kirkley without knowing a ton more about your situation or your market it would not be appropriate of me to give "advice" or an "opinion" on SFR vs MFR for your first buy/house hack.

For what it is worth... I can tell you what I did and why and you can take what you want from my experience. I live and invest in a market that has historically been very expensive. For decades people have been saying that prices cannot keep going up, the value is not there, etc, etc. I bought my first place over 20 years ago. It was a 2 bed 2.5 bath townhouse for $298,500. I sold it several years later for $616,000. Current Zillow estimate for the same property is nearly $1,400,000. In my market, I KNEW appreciation was going to make a big impact on my long term wealth. Therefore, I got into a property that was not perfect but it was in a good location and good enough for me, at the time, to start my journey into REI.

I personally believe in the motto of "progress not perfection". In the end, I believe a successful business person needs to fully analyze him/herself BEFORE analyzing a deal. Build a strategy around your strengths and minimize your weaknesses. If you can pull down a multi-family go for it. But be open to doing an SFR house hack if your situation points in that direction.

@Robert Kirkley it is great that you are interested in getting into REI. You are asking the right first questions and your observations about how many ways there are to make money in REI is spot on. You should be doing 2 basic things right now, and it looks like you are: build cash and gain experience/knowledge. Working with a flipper would be nice if you have somebody that you know that is already in that space. But it does not really add to your knowledge base for a buy and hold strategy. The only real upside would be is IF you get a piece of the pie on the flips.

REI, especially in buy and hold, is a long term strategy, flipping is a job. As a young guy starting out, you might want to look very closely at "house hacking". This is relatively safe and there are definitely financial benefits starting out with this strategy. At this point in your life, you will have more time than money. So learn about doing repairs and upgrades/renovations so you can apply that knowledge to your HH. Once you get through your first HH you could move on to another one and turn your first property into a rental.

You are seriously young... there is no need to feel time pressure. You have DECADES to blow things up. Make sure you start is solid and you will be fine in the future. Keep hustling and build up cash. Stay really humble and don't buy stupid stuff. Live like a monk and focus on the future, not the crazy stuff on social media that is telling everybody to spend like a baller!

@Cory Carlson the strategy does not make sense... Your clients were in pre-foreclosure on a duplex, they have bad credit, no active income and all they have is $100,000.  Not sure about their age or their health situation, but based on their finances and their needs you should not be putting them into another 2-4 unit property, even if it some cheap property that cash flows $100 a month per door.  If they could not handle the duplex they were in, I don't see how they could handle another property, especially out of state. They are not going to have any mind share from the turnkey guy or the PM. 1 bad tenant, a bad renovation, a bad roof and they lose their nest egg and their little bit of cash flow. If they are in the twilight years of their life, you should be steering them toward conservative paths, not something totally outside of their wheelhouse. I don't mean to be overly harsh. This is just an opinion and you know what they say about those... good luck to you and your clients.

@Levi Potts congrats on making the decision. The first piece of advice, coming from an old guy, is to take the time right now to build your long term plan. Don't jump at the first strategy that sounds good to you. There are so many ways to make money in real estate, that sometimes it can be daunting just trying to figure out a path. You literally have decades to make money ahead of you so take the time now to learn and prepare. Start with going to the various meetups in the Bay Area. You will have a chance to talk to people who have various strategies and you can start to figure out what will fit your strengths and minimize your weaknesses. Second, get really humble with your spending. Don't get all fancy and start to buy useless stuff. Live like a monk and save your money. Whatever, the strategy you chose you will need money to get your program off of the ground. Do not let the hype of the successes of random people on social media trick you into making the wrong moves.

Good luck!

@Sol Bier there are a bunch of meet ups in the area that might help you out. There is one in Oakland tonight hosted by @Brenda Chen.  Also there is a big 2 day summit next month in Oakland hosted by 

@J. Martin

@Justin Christian Macabenta as @Houston Garcia has pointed out, there are deal all along the East Bay.  What you have to better define is your idea of "cash flow".  Do you mean that the property will give you money every month with you living in 1 unit for free?  If that is the case than you probably are SOL.  However, if you are looking at properties knowing that you will be "paying rent" for the space you will occupy than there are many properties that make sense.  It is all about perspective.

I helped a friend of mine put in an offer on a triplex in Hayward last night. He will live in the smallest unit and continue to rent out the others. The "rent" he will be paying will be higher than his current rent.  However, he will go from renting a room with 3 other guys to having a 1 bed/bath all to himself. Some people would say he is loosing money because his out of pocket expense have risen.  Others would say that he is "paying" more rent for a more valuable rental. Either way, he is getting debt pay down on the property through the other tenants. He is locking down his property taxes. Also he has the option to move into one of the larger units if he gets married.

If you are ok with living in the hood, deep East Oakland is also an option. My good friend @Account Closed is killing it down there with both appreciation and positive cash flow.

@Justin Christian Macabenta you are just getting into the game. Do a house hack and get some experience with both sides. If you do the renovations yourself you will get a feel for the amount of time and effort you will actually need to put into a flipper business. At the same time if you house hack you could potentially get housemates and try the landlord side of things.