All Forum Posts by: Alvin Sylvain

@Carolyn Morales you forgot Interest Only. Esentially, an infinite term until such time as you pay back the loan in full.

E.g. you borrow $100k. At 3.6% APR you pay $300 monthy -- forever.

-- or until you pay back a lump sum of $100k.

It sounds crazy, but it can be useful in a pinch to allow you to secure a good deal quickly, then refinance later with a "normal" loan.

@Russ O'Leary

Let me present you with an alternative scenario that's counter to what's been said so far.

Accept the smoker with the extra cleaning deposit. When they leave, advertise the unit as SMOKERS WELCOME! Coz you can be sure that the smoke smell won't bother another smoker, and smokers all over will be looking for a place that will let them smoke. Such places are getting harder to find.

This may be a bad idea in an apartment where other units can be affected, but should be ideal for an SFR.

Originally posted by @Corby Goade:

This is an easy one for me- many lifelong renters feel victimized by their landlords- helpless that they are living at the whim of the rent increases and invconveninces that renting comes with. There are two simple responses

There is a third simple response.

3. What's stopping you from trying to haggle for a better rent? Nothing.

Just say, "Look, I've been here for a year, I don't bother the neighbors, I pay on time, but I recognize that costs go up. How's about it only goes up N percent instead of M percent?"

I had an experience as a renter where the landlord raised my rent 13%. I said, "13%? OMG! How about 7%?" He said, "OK". And that was it.

That was IT? It was too easy! I should've asked for 3%! Maybe after a little back-and-forth, I'd have ended up at 5%.

There is no reason to feel "victimized" by landlords and there no reason to believe the rent is carved in stone. Everything is negotiable.

Just to put an opposite spin on the overall trend here, since the Rams are moving to the Los Angeles area and building this grand, new, beautiful stadium over in Inglewood, rents hereabouts have been going CRAZY.

I hear anecdotal stories about rents doubling and tripling, all at once. I know of at least two businesses that were forced to relocate because they couldn't afford the increased leasing rate. And one of those failed to survive at their new location.

And after all is said and done -- the place is still a dump. I can say that, I live here. So it's a dump, but you still have the privilege of paying "market rent".

I hear a lot of people here saying, "You get what you pay for" or words to that effect, and that is true, I'm 100% on board with that. But the Rams has taken that concept and unintentionally threw it on its head. OK, living near the Rams is worth twice, three times the rent? So the rent can go up and place can still be a dump? I don't get it.

Originally posted by @Mary M.:

Ummmmmm.... ok.  Isnt your Governor the one that is working to bring something like 200,000 new units online before 2025? This is a HUGE amount of money (billions)

The governor of California is an empty suit. He's damned good looking, but seriously, there is nothing of substance there. He's the kind of guy who will let homeless people sleep on the sidewalk, then ban plastic straws based on some viral YouTube video. And guess where the billion$ is coming from? The California Taxpayer. And that's even assuming they ever actually build any units. 2025 is a long way away, with plenty of opportunity to divert the funds elsewhere. We already have more than a billion set aside from a voter-approved sales tax hike that's just been sitting in a bank account somewhere.

The problem with restricted housing supply in California have been going on for decades. If they ease the restrictions and fees and regulations, the builders will come in and solve the problem for us, on their own dime.

Rented Dad's house after he passed. It has a lemon tree in the back that produces very tasty fruit, but you have to water it a lot. I mean, A LOT.

Tenants paid the utilities, and the water bill in LA is ridiculously high, so they watered it minimally. If it doesn't get the water it wants, it won't prodice. But they never complained about lack of fruit, and the tree didn't die, so, I guess everybody's happy.

County records have got nothing to do with "value". You want to look at comparables ("comps"), the prices that similar nearby properties sold for recently.

For example, the county records say my Dad's old house should be "valued" at around $30K or so. Yah, right, in Southern California. You can't find a phone booth for that price today, at least not one with indoor plumbing.

This county records "value" is based on its original sale date back in 1960-something, when my Dad bought it for about $20K-something. (Yah, I still own my Dad's old house. Thanks, Dad, rest in peace.) A similar property down the street sold for about $550K. So which number do you want? $30K? or $550K?

The only advice I can render is, check the market in the area you want to build in. Look at what else the area has to offer.
E.g., if you happen to build the ONLY duplex surrounded by SFR's, it might be a bit difficult to rent, plus your neighbors will see it as a hit to their property values. Not a good way to instill community relations.
Find a lot in a nice area, one that is surrounded by a nice mix of apartments of varying sizes and SFR's, you'll probably do a lot better. You'll not only be in an area you like, but your renters and neighbors will be happy too.
Just my opinion, with utterly no basis in experience.

Originally posted by @Tyler Meade:

@Alvin Sylvain appreciate your feedback! That was another way i was thinking of going about calculating repairs. Just wasn’t for certain because it’s my first property that i have interest in that’s already in the middle of a remodel. Yes, the father sounded pretty eager but i’ll have to hear the sons concern. Thank you for the help i’ll let you know how it goes!

BP has some webinars and/or podcasts about estimating the rehab costs. Get as much information as possible! One unanticipated disaster can throw your whole plan down the flooding toilet!

Determine the value of the house already fixed up, ready to sell. That's where you "comp" against other similar properties in the area. You comp the fully-rehabbed, turn-key, ready to sell property, assuming probably that the comped properties were also turn-key, ready to sell (because they sold).

Subtract any and all repair/rehab costs still required. Whatever is done already is done already, and as long as it was done right and you don't need to re-do it, it doesn't matter.

Subtract holding costs to get those repairs completed. Somebody, probably you, has to pay the mortgage, taxes, insurance, HOA, etc., while waiting for completion.

Subtract a modest profit for you. Or a mongo profit, your call.

Subtract some room for negotiation.

The result is what you offer.

They've had it for a whole year? I don't think they've been serious about it. It should be possible to rebuild it from scratch in that much time. Take that into consideration in your negotiations -- they're probably eager to get rid of it.