All Forum Posts by: Alvin Uy

Those of you who invest in California or Pacific Coast that own property,  what are your thoughts on Earthquake insurance?   Do you have them for your properties?   Is it worth it?      If not, what will you do in an event of a major earthquake??

Thanks for the details.... Definitely sounds like its not for everyone. Glad you were able to identify those issues ahead of time. I literally just walked away from a similar deal to your Property#1 last week (although its an MLS, not an auction deal). A very small tear down 1/1 SFR on Hillside 14k sqft lot on a beautiful hillside views... surrounded by million dollar homes. Worse house on a very desirable neighborhood. Similar situation, it look good on paper basically paying for land value... I almost thought I hit the lottery on this one. A third of the lot was flat before a very steep drop off. The plan was to tear it down and build a high end home... and flip that would yield $300-$400k net. The day I was going to remove all contingencies, my contractor while sending plans to the city found out that ground soil the exist house was build on was basically back filled decades ago so it was not conforming to todays standards. Building and Safety requirements included having several pylons place with roughly 25-30ft each just to reach bedrock.. plus hillside retaining walls. Just to get permits for pylons and retaining walls will take 8-10mos... plus roughly $100k just for that. I had to walk away... Glad angels were watching me that day.

So I went to go look at a 2 Unit (duplex) today thats listed on the MLS. I noticed the square footage on title does not match square footage that I saw. The listing price per square foot includes the addition however. The owners (man and wife in their 70's) say the 2nd Unit (1bd/1ba) was built with permits for their daughter decades ago but was not recorded because owners did not want to pay additional property tax on the build. My realtor did some digging online and found permit of second unit on this property filed with city. I should also mention that the lot is zoned for up to 3 units, so I can still force appreciation by building a 3rd Unit, but would hate to have to tear down the 2nd unit if it wasnt truly permitted. So now im baffled by this and not sure what to offer... is this 2nd unit truly permitted but not recorded on title? I had no idea thats even possible to do.

I second this and 100% agree with Dan!     Im starting to look into San Diego to expand my portfolio.  I see similarities with Los Angeles Market where I play.     The way i see it, these markets ( Los Angeles, SD, SF) all have high barriers of entry.     Yes, these areas are unique markets where initial cash flow can be difficult at first (unless you put a larger down payment).... but the long term appreciation in equity and rent wins the game compared to other areas where most invest looking for initial cashflows.   I, for one, have been spoiled by the appreciation in equity and rent gains over the past 10yrs... not sure I would invest OOS for this very reason.   I personally see your issues as short term sacrifice...  just gotta find ways to make it work.  Try contacting property managers in the area to see if theres ways to get higher rent.   And if you still can’t and would rather get rid of it...  I’d be happy to take a look at your property and maybe acquire it from you .... and maybe I’d let you rent it back from me with a yearly rent increase.  LOL.      Good luck. 

Im interested in looking into Auctions ...and auctions.com as well.   Never done it before.    How are Tax Lien Auctions different from those properties on Auctions.com?   Your response got me concerned that its a huge gamble and not worth the effort or risk.    Just out of curiousity.... what exactly was that “significant issues beyond rehab type that could not be resolved”?   And how common are these types of issues? And why would anyone buy these types of properties?

Hiya!   I guess i missed this...   

 Thank you for your response.    Can I add 1% for water?

@Heath Cejka

This is exactly how i got started. That said, Its going to be a while before you can take out any money from your primary.... but depends where you invest in. Luckily for you, you’re in an area that appreciates. If your first loan has a good 30yr fixed rate that you dont want to touch, Heloc is a great route. May not be the fastest route but it can definitely work.

This has been my strategy and I have slowly bought 5 properties this way in Los Angeles. In fact, Ive recently gained access to about $1M in Heloc at an average rate of 5.6% just from 2 of my properties.... using the funds from the Heloc as downpayment for a 7th one. Unfortunately, Its a JV project conversion of SFR into a Triplex so its not a keeper. But my partner and I will be flipping this one with a big potential net profit.. I will then put that as a downpayment towards a another multi unit conversion project I will be doing on my own as a buy hold property in Los Angeles. Planning on repeating this flip then hold process.

In my opinion, just start where you can afford.  Don't over complicated it because I dont think you can go wrong if its your first home...  owning property beats renting.  Just the tax benefits alone is already a plus up.  

In most recent years, rent increases have been capped at 3% in Los Angeles. Im about to renew lease agreements on my 4plex and found this article today that says Rent Control Cap is going up from 3% to 4% starting July 2019.

As a landlord in Rent Control area, im excited about this possibility.... But i cant confirm if this is true. Im hoping some of you Los Angeles property managers in this forum can chime in and confirm this? Here’s the article I found:

https://www.google.com/amp/s/la.curbed.com/platform/amp/2019/3/12/18260567/los-angeles-rent-control-increase