All Forum Posts by: Arlen Chou

@Angela Liu to season a property usually means to hold it for a certain period of time. Hopefully during that period you will increase rents. A stand alone loan, would be a loan specific to that property vs a HELOC which is on your home and the money can be spent on other things...

@Chatree C. a live in flip is the best entry strategy in a hot market for a young person, especially if you are single without kids.  I would layer on top of that strategy renting out extra rooms.  With this strategy you get all of the benefits of; loan pay down, tax benefits, appreciation, learning opportunity.  I personally did this in my 20's and into my 30's until I got married and had kids.  

@Kimber Lockhart nice location. Its been on Redfin for a long time, so there might be some room to negotiate.  I personally don't like the architecture of that style of building.  They get hot in the summer and cold in the winter, but that is just a personal buying preference for me.  As I see it, the real issue with this building is that all of the appreciation has been squeezed out of it by the flipper.  Have you spent some serious time in Richmond to get a feel for the area?  If you have not, I HIGHLY suggest that you drive AND walk the different neighborhoods to get a good feel of different areas.  Personally, I will drive and walk on different days and at different times to get a really good understanding of an area.  Some areas in the East Bay look completely acceptable during the day, but at night it is a totally different vibe.  On the numbers side of things, that is just a matter of doing your math and finding your comfort zone to get to an offer price.

Good luck to you,

Arlen

Thank you @Angela Yan for the shout out!  I don't deserve such a nice compliment. I am still learning and growing like everybody on the forum. @Nikky Ly feel free to reach out if you have any questions, I will try my best to help where I can.

@Nikky Ly as @Account Closed has pointed out, it is totally possible in this market.  The real issue is how much direct involvement do you want and how much capital do you have starting out.  There are very few home runs out there for somebody who is just starting out. Saj knows his market and his customer base, so he can see the hidden value in a property.  I am sure that the reason that unit was free for his picking is because it would have scared the pants of most people who are just starting out.  I have several properties in Oakland, and I might have looked closely at his deal, but ultimately I would probably have walked away because it was not in my "farming area".  The key to success in a tight market like this is knowing yourself and the exact area that you want to focus.  Your question covers hundreds of square miles and 10's of thousands of properties.  I personally only look in a several block radius of a single point.  So my knowledge about prices of buildings and rents is very focused.  I know very little about West Oakland or deep East Oakland, but that is on purpose.

It sounds like you have decided to do a small multifamily building house hack.  That is a great way to start.  I would personally go into knowing it will be a learning experience.  Knowing that I would live there, I would look in an area that I actually want to live in, or would not mind living in for a few years.  For me, that would mean that the property would be more expensive then some "better deals".  I promise you that it would especially suck to commute between your W2 job and home, knowing that you have to deal with maintenance issues and tenants, in an area that you don't really want to live in.  Don't get caught up in trying to find "the best deal".  That is how "paralysis by analysis" sets in... Start with some basic criteria: I don't want to loose money, I want to have a decent commute, etc.  I am sure there are some people who will see my advice as sacrilegious, but my advice comes from a longer term investment perspective.

Good luck to you! 

Hello Ratesh, I look for bolted foundations at the time of purchase so I have no knowledge as to the actual cost.  

Good luck to you!

Arlen

@Ratesh D., interesting timing, I just had this conversation with a few local BP investors on Saturday.  In my particular case, the deductible is still to high.  At a 10% to 15% deductible, my buildings would have to sustain substantial damage or completely collapse before I saw anything from the insurance company.  My buildings are all over 50 years old and they have not had any damage yet, so I am not getting earthquake insurance.  The one thing that I do make sure is that they are bolted to the foundations. @Amit M. did you come to any decision yet?

@Brian Dickerson it really depend on your investment market, the property type and how long you can comfortably leave your money parked.  I have done this several times and most recently just finished the refi last month on a 6 plex.  The property was bought in cash, which made for a shorter closing.  The property appraised approx. $200k over purchase price, 1 year after purchase.  We did nothing to it, just rode the appreciation wave.  If you are buying a single family home, you can pull your money out but it is usually better to "season" the property for 12 months.  Hopefully you will get some appreciation and the banks will use the higher value.  However, if you do it in less time, they will just use your purchase price so you might not be able to access any appreciation gains.

@Kyle Steiner I personally would not do demo on it, not would I paint it.  I would go to HD or Lowes get some concrete and smooth the surface.  I would then tile over the concrete and put a nice mantle across the top.  There is nothing wrong with an offset look if it is done right.

@Carrie Maultsby-Lute 100% vinyl planks.  They are easy to install on your own, if you decide to go that route.  They don't warp and don't need to be refinished.  I have them in 10 different units, 8 residential and 2 commercial office spaces, and I have not had any issues with them.  Just make sure you get the good stuff... don't go cheap!