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All Forum Posts by: Alvin Uy

Alvin Uy has started 13 posts and replied 274 times.

Post: Investing outside of California

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

@Saj Shah THIS!! I completely agree with everything you said. 


I too am so tired of many Californians and others giving up on Cali. It seems like everyone to be jumping on OOS investing bandwagon and can’t find the hidden gold mine in front of them.

I personally own 7 properties in expensive-*** SoCal. Los Angeles. You can’t beat the appreciation here on SFRs. Its rent control exempt!!! This is why im focusing on SFRs as the majority of my property asset type. They outperform my 4unit.... on rent and appreciation.

The new rent control laws are backfiring. In my opinion, it will force rents to go up 5-8% every year in the right markets. Because supply and demand. I see it now... its basically a license to raise rents every year. I have raised my rents every year at 4% and my tenants expect it and have never complained. Im cash positive on all my properties.... almost $200k in gross income after 10yrs of investing in SoCal.

I just opened escrow on a SFR fixer this weekend in SoCal. I was going to flip it but after running my numbers and after appraisal value came in... I have a $250k spread on "as is" value. After rehab (est $60-80k max), my LTV might even be under 80% LTV....Which i can refi into a conventional loan. If i rent at market rent, Rent will be negative about $15 bucks for the first year.... but i have $200k in equity off the bat.... and raising rent next year will cashflow.

You can find deals in Cali if you try hard enough. If I can do it in Los Angeles. There’s no reason you can’t...  you just need to find the right strategy for your market. 

Post: What was your biggest mistake starting out as a Landlord?

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

@Nathan G.

Im in SoCal, so rent control is a big issue and makes it difficult to evict.

For me.... So far so good, but i do wished that i got my property vacant because i don’t like inheriting tenants... and because i cant just raise to market rent compared to most states outside of Cali.

Post: Foreclosure purchase in person San Diego CA

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

Is being sold by the bank. I haven’t handled foreclosures in San Diego so I’m looking for some insight into this new territory. 

Is it a banked owned REO? You may want a local licensed realtor that has experience with REOs.

Post: Telsa Cybertruck the ultimate for the real estate owner operator

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

@Jay Hinrichs

Not quite sold on the design aesthetics but

im sold on the bullet proof paneling... its a damn tank!! Perfect vehicle to have if you own properties in a war zone... especially in case stray bullets come flying while you’re collecting rents or evicting tenants.

PS... I was lucky enough to have bought Tesla stocks at IPO. So, i really hope it does well.

Post: New to SOCAL investing with full time job

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

Where in SoCal are you?  You should attend meetups in your area. 

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, Yes, like Victor, I'm curious what happened with this project. Please post an update. Thanks!

Thanks for the follow up.  Project is taken longer than expected but still in progress. A few plan changes as well as project management changes happened that affected timeline... My wife and I have taken over the project and design.  Not to mention that city took their sweet time to approve new plans and permits (as some have predicted).   Original structure is completely demolished.   4/3 is going in the back ... smaller 3/2 is going in the front.  Modern Farm House style (with not so super highend finishings). 

Eagle Rock prices seems to continue to rise and so is rent. Theres a demand for housing in this area. My wife and I are actually considering keeping the property as a rental since we can make our the numbers work as a keeper. We also have the option at exit to buyout JV partner. "New construction" makes this duplex desirable because it is exempt from LA rent control. We should be done before summer next year...hopefully no more delays. We will decide then which exit to take. Stay tuned.

I’ve learned a lot since the beginning of this project.  


Post: Single Family Rentals: Are they a good investment?

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

In my opinion, this depends on the area... and property/tenant class. In Los Angeles, where there's rent control, my 5 SFRs outperform my 4-plex. My wife and I manage our own properties and I would argue that I get more complaints from my 4unit vs my SFR tenants. Because of rent control, i cant evict my 4plex tenants (that Ive inherited) without "just cause". My SFRs are exempt from rent control... also appreciated in value much quicker than my 4-plex for some reason.

That said, I have no experience with larger 5+ units. But my plan is to buy one more SFRs or 2-4unit that i can finance under fixed conventional loan (because thats all I can qualify for with my DTI). Then move up to larger MF complex using commercial financing.

Post: Where to buy 1st out of state property?

Alvin Uy
Posted
  • Rental Property Investor
  • Los Angeles
  • Posts 284
  • Votes 184
Originally posted by @Antonio A.:
Originally posted by @Alan Grobmeier:

@Antonio A., if this is your first RE investment do NOT buy a C class property.  The returns look sexy, the hassles are not.  
Go for solid B/A sfr in a good school system.  You will have fewer headaches & you will actually come out ahead in the long run over a C property.

Yes, this is my first investment. Similar to yourself, my lady and I have solid jobs but the obvious attention an OOS requires makes it less attractive. For now, we appear to heading down the "house hack" strategy and purchase a 2 unit here in the Los Angeles area. Sure we won't "cash flow" but our monthly living mortgage will be cut in half from the amount we are currently paying in rent. 

I suppose everyone invests for particular reasons and ours is to lower our monthly costs while loan pay down and appreciation do their thing. Cashflow should eventually come and we understand this. Luckily we have patience and the willingness to learn from our mistakes.

I see you have properties out in California, hopefully the governor here didn't affect your property too bad with the recent rent control bill. 

I know this may be counter intuitive, but consider yourself lucky to be boots on the ground in L.A. market. There are opportunities to be made here in SoCal.  You will thank yourself in the long run if you can figure out a way to invest in SoCal.   Its always going to seem expensive.  It seemed expensive 10yrs ago.. seems expensive now... going to be even more expensive 10yrs from now.  I see that as a blessing and a very clear sign its a good market. 

Also, Dont let the initial negative cashflow stop you. Its very very temporary. Trust me on that one! Regarding rent control... i see it this way. Its essentially a license to raise your rent 8%/yr (4% in LA Rent Control). Ive raised my rents every year... tenants expect it and never complained. In fact, i see it as a blessing when tenants leave because my rent roll jumps every time! I have a 4/2 SFR in Eagle Rock renting for $3200 last year... jumped to $4200 this year around summertime because my old tenants left ( i had 5 good solid applicants within 5 days it was listed).


Post: Where to buy 1st out of state property?

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

I would be careful buying any "turn key" properties because these deals often are overpriced and often are in lower middle class (or worse) areas.  

My advice is counter-intuitive:  Stay in California if you can, because the real estate is golden.  It is priced high because it is in high demand.  And likely will stay that way because the supply is constrained and the demand is high.

Certain cities that you mentioned have what I call "surplus" real estate.  Or low demand real estate.  The overall regional economy has been mediocre, yet new real estate gets built in the suburbs, pulling demand out of some of the older neighborhoods.  Cincinnati and Cleveland have had population erosion over several decades.  Thus the supply of older houses is high and the values are low.

The formula for successful investing in some of these neighborhoods has been to purchase distressed real estate (foreclosures) and then re-perform them into rentals.  Often the savvy, local investors buy into these properties at much lower numbers.  Hard to do that from California.

If you have to buy out of state, buy into a B quality or better area.  Do extensive research and get to know the market by travelling to the City.


Thank you for your comment!!    This is exactly what I needed to hear.  I’ve been investing in Cali for several years before I found BP earlier this year.   Since I joined BP, every new investors i meet here are wanting this cashflow focused strategy to replace income.   Seems like everyone have been on this OOS cashflow only bandwagon. I personally have not been able to reconcile my gut feelings with everything Im reading about OOS investing.... specifically struggling  with this concept of cashflow-only strategy as I do not see it being a true wealth builder without appreciation.  Cali has been an easy target for being the worse state to invest in.  But Not sure if I completely agree with that sentiment.  Its a high barrier of entry but can also be a generous wealth builder and very stable in the long run.

I own 5-SFRs and 1-4plex in Los Angeles. Majority of which were bought within the last 5-10yrs. My wife and I rehabbed and managed them ourselves. All are cashflowing. All have doubled or tripled in value within the last 5-10 yrs. All are less than 50% LTV because rents have increased every year and we were able to pay down mortgages much quicker. I have one SFR that's already made me a millionaire ( originally purchsed at $415k... just recently appraised for $1.45m). I doubt any of these midwest properties can do that kind of return.

Post: Prefab homes vs traditional stick-built homes ( in Los Angeles )

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

I have not dealt with the type of homes you are describing but I have been handling modular construction for many years. I can get one completed quicker than that and it appraises the same as a site built.  I most recently had one delivered last Friday, and set on Monday.  If weather allows, I should have everything complete including site work in 30 more days.  I ordered the house 3 weeks ago, mind you. Built better than most of the stick built construction.  My cost will be lower than $85/sf including site work.  Cali much more expensive than the Charlotte region, but I bet you would be better off going the mod route.

The design work that you are speaking of is very popular in the heart of Charlotte but I deal mainly 25 miles out.  Culture is different.

30 days?  That cant happen here because city permit and requirements are pretty strict.  Plus foundation needs to be completely redone new for Protohomes structure requirement. 

Did the mod builder you dealt with do custom design based on your lot or were they predesign selections you had to choose from?

I am the dealer.  I had footers dug and poured and foundation in place the week before.  Are you actually using an existing foundation?  I have never done that with site built or mods.  The majority of the mods I setup are existing plans but we can get custom as well for a nominal fee.  

I was told the existing footer/foundation will need to be torn out and redone entirely to meet new code requirements in Los Angeles... and to work with mod builders system.  

 Not necessarily a terrible thing since property will then be deemed as “new construction” if new foundation is poured.... which will consequently be exempt from LA Rent Control.  (a huge plus).