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All Forum Posts by: Alvin Uy

Alvin Uy has started 13 posts and replied 274 times.

Post: Borrowing Against My House

Alvin Uy
Posted
  • Rental Property Investor
  • Los Angeles
  • Posts 284
  • Votes 184
Originally posted by @Matt Hulsman:

Got it. Thanks. Maybe I'll pay cash for the downpayment and then do a small HELOC for renovations to get a feel for the process and not go house poor.

 The profit from my flips is ultimately what I used for the downpayments for my long term holds.

Post: Borrowing Against My House

Alvin Uy
Posted
  • Rental Property Investor
  • Los Angeles
  • Posts 284
  • Votes 184

HELOC is a great resource to utilize as leverage to acquire other properties. However, I suggest using it only for short term financing needs. Just make sure to remember the interest is variable and something you can afford.

Depending on lender you can borrow any where from 60% to 90% LTV less your current mortgage balance. Most retail lenders can only do HELOCs for your primary. But there are a few banks that would do helocs on investment properties.. but usually lower LTV and higher rates. ust keep an eye on your debt to income ration as sometimes having a Heloc open will limit your ability to get another loan (even when unused). Also, if you intend to use the HELOC funds for downpayment. Just make sure you ask your new loan lender if you can use the HELOC funds... there may be some "seasoning" issues.

I have been using HELOCs for short term strategies... like buying houses as "all cash" and rehab/flipping fund lately.  The profit from those flips is ultimately what I used for the downpayments for my long term holds.

Good luck.

Post: Trouble Tenants...I'm Overwhelmed

Alvin Uy
Posted
  • Rental Property Investor
  • Los Angeles
  • Posts 284
  • Votes 184

@Account Closed

There's a lot of interesting comments on here, but Los Angeles is a different beast due to Rent Control. I own 4 SFR... and a 4-Plex. in Eagle Rock/Glassell Park area, Los Angeles. I do a very thorough screening to find quality tenants upfront. Did you properly screen these tenants before they moved in? I always meet tenants in person when I show vacant properties to get a vibe of their personalities... you can easily spot a complainer by just watching them walk the unit when you are showing the property. Sometimes, I even look into their cars to see how the inside is and how they take care of it... its a good indication of how they will treat your property. I also make sure I call previous landlords on how tenants were... late payments, complaints, etc. In fact, Im doing all of the above now because I have a new vacancy that I've been showing all week.

 As you know, It's very difficult to evict tenants on bad or less than ideal behavior without "just cause" in CA... Particularly in Los Angeles due to Rent Control. "Managing" your tenants can be a headache at times.... sometimes you just need to bite your tongue.   But like someone else mentioned above.  There are always 2 sides to the story.

Unfortunately, certain repairs and maintenance are your responsibility (roof leaks, plumbing, electrical, etc..).  However, I've learned that throughout the years to add to my lease contracts certain provisions for certain types of petty requests.   I have an addendum on the contracts that says my tenants are responsible for maintenance of certain things (replacing HVAC Filters every 2-3mos, Refrigerator water Filters, Light bulbs... especially Garbage disposals)... of course, I will supply the materials every year (bulbs, filter etc.)  If things break due to negligence or failure to maintain certain provisions then I can hold them liable for repair costs and will take it out of their security deposits.

By the way, SFR do not abide by the same multi-unit rent control ordinance. You can only raise the rent for multi-units up to 4% annually. However, you can raise the rent of SFR to the 10% limit within a year. What is your lease term agreement like? Are they on a yearly basis or month-to-month?? I have my tenants on a month-to-month basis after the first years lease so this would allow me to do so with a 30day notice. I've raised my rents 3% annually only, but I have a pesky tenant... I will bump it up to the 10%. Failure to pay rent is "just cause" for eviction under Rent Control. Thankfully, I've never had to do that. All my tenants are great because I screened them well.

At any case, if you don't want to deal with tenants directly.  Just get a property manager to handle the calls.  They are a dime a dozen.  Good Luck!

Post: Should I renew a habitually late tenant that pays the late fee?

Alvin Uy
Posted
  • Rental Property Investor
  • Los Angeles
  • Posts 284
  • Votes 184

urghh... Please don't take this the wrong way.... this sounds to me like a rant of a spoiled child.  You have no idea how good you have it.  LOL!

Im just so so jealous of your situation. Try being a landlord in Southern California.   Only one of my tenants pays on time and there isn't much I can do about it... Urghhh!!!   Consider yourself lucky to have such options to raise rent, raise late fees, option to renew leases... and kick tenants out!!!      

Post: I have access to $500k cash, should I put $50k down on 10 SFRs?

Alvin Uy
Posted
  • Rental Property Investor
  • Los Angeles
  • Posts 284
  • Votes 184
Originally posted by @Sammy Lyon:

@Daniel Dietz how do you split the equity with your private money partners? sounds like you're doing JV type deals and I'm curious how you structure it! I also like this model.

I was just about to ask OP that same question. Do you have a JV agreement in place? And Who holds title on theses properties?

Post: I have access to $500k cash, should I put $50k down on 10 SFRs?

Alvin Uy
Posted
  • Rental Property Investor
  • Los Angeles
  • Posts 284
  • Votes 184

I guess I keep getting stuck on a few things you mentioned on your original post.... 

Unless Im reading it wrong, you must have a super high income and must be a super high net worth indiviual to be able to cover that debt/income spread for 10 loans at one time....and with only 10% downpayment on non-owner occupied properties.

Do you already have a lender that would loan you Interest Only loans for 10 properties with 10% DP at a time?  

If so, thats incredible find!   I would love to get that lenders info please...

Post: Help! Moving from illinois to Cali

Alvin Uy
Posted
  • Rental Property Investor
  • Los Angeles
  • Posts 284
  • Votes 184

 I live in SoCal and this thinking never stopped me.   Over the years I have managed to buy and hold 5 income properties (SFRs & 4Plex)... all cash flowing... all with high equity.   Now, Im on my 6th... but I Im going to flip this one.    Yes, Its a high entry point... the first one is always the toughest.  But with higher prices, are higher appreciation potential as well compared to many other states.   There are definitely pluses and minuses to investing in Cali.  You just need to learn market and figure out the game.   I did it... so can you.     At any case... You can always invest OOS.  Good luck.

Post: Earth Quake Insurance —- To get or not to get???

Alvin Uy
Posted
  • Rental Property Investor
  • Los Angeles
  • Posts 284
  • Votes 184

With all the earthquakes this week lately... im kinda feeling better about having i

Earthquake insurance.

Post: Cash or HELOC - what is better?

Alvin Uy
Posted
  • Rental Property Investor
  • Los Angeles
  • Posts 284
  • Votes 184

My wife and I are on a similar situation. We have several investment properties that have accumulated large equity. We wanted to see if we can leverage it. We working on a project right now to convert a small SFR on a large R2 lot into a 2unit (2 separate houses)... and trying not to use any of our own cash. Instead, the property we just bought was acquired using a loan (with no prepayment penalty). We will be using the HELOCs against 2 of our rentals to rehab/build 2 new houses on the lot. All loans and lines of credit will be paid back after the property is sold.

Post: My first "High End" flip -- Looking for some input

Alvin Uy
Posted
  • Rental Property Investor
  • Los Angeles
  • Posts 284
  • Votes 184
Originally posted by @Monica Vigil:

Hi Alvin, Not to land a 747 on your plans but... I have a few concerns (not the least of which is the estimated build time with permits which people have mentioned).

The biggest problem here is that I think you are building wrong for the market. I'm very familiar with NELA and what people are looking for in this area. There was a time when people wanted two houses on one lot but that was before it was gentrified. The people buying the houses you are talking about do not live with generations of the same family on the same lot. The people who spend $1.7M on these houses do NOT want to have three college students living in their backyard. ADUs are super hot, yes, but NOT second whole houses. These buyers want the ability to rent their ADU as an Airbnb and have it available for in-laws when they come to town.

Expand the front house if you want but I would highly recommend you don't build more than a 1/1 in the back. You'll sell so much quicker and you already have two examples of this working. Don't think you have to max out the lot's zoning to make the most money.

One more point: these are more middle income houses than high end. Don't think you need to go crazy with sub zero appliances, etc. These buyers prefer rustic modern (think Magnolia Homes) and, especially, if you go the extra mile to keep and highlight any existing historic home features (cove ceilings, please double check for batchelder tile on the fire place!, etc). Get a great stager who understands the NELA market completely and bring them in before demo if you don't know what I'm talking about with the design and historic elements. They appreciate nostalgia but with modern convenience.

Good luck and please post how things go!

 Hi Monica.  All very good inputs.. and very much appreciate your insight.