All Forum Posts by: Anthony Capitan

Hi Everyone,

From Jefferson Lilly's great podcast on mobile home investing (ep. 111), I know that mobile home parks have an accelerated depreciation schedule (relative to standard residential and commercial buildings) of 15 years. I'm wondering if there are any RV park experts out there who know whether or not that asset class benefits from the same accelerated schedule.

Thanks,

Anthony

To add to that, if you go back to working in the industry you last worked in, depending on how long you haven't been working, your past time working could count towards the two years of income they'll want to look at. But if you go into a new field they'll want to see two years income from your starting date in that field.

If you want to get into hands on investing more quickly, you may consider trying to work for cheap with a building contractor. Photograph what you do / help with while you're there and develop a construction network, then if you find a good rehab deal you can use that evidence of your knowledge and experience in construction to persuade a partner to help you with capital and/or income verification, and/or to secure a loan with a hard money lender.

Thanks so much, Douglas! Much Appreciated!

@ Theodore, there are also one time expenses to think about. Transfer tax, escrow, title insurance - virtually all the closing costs are left to the buyer in most retail transactions in the bay area nowadays, hot as the market is. There are also Melo Roos bonds to consider, though in 1 - 4 unit transactions the agent has a responsibility to disclose that. 

Then if you're talking about a house rehab your main numbers to consider are not rent but ARV (After Repair Value) - to get that you need to do conservative comps. on a few others in the area - and the cost of needed repairs. You also need to consider the cost of construction financing, which can be steep, and have quite a bit of wiggle room for unexpected delays, work coming in over bid, etc.

But please, ya'll let me know if I'm missing something. I'm just starting out in this game too.

@Jerry, depending on what investment strategy and asset class you decide to specialize in (to begin with), you'll likely want to proceed with caution at this point in the south bay. Whenever entering a market, come to your best possible evaluation of the demographics picture and the macro-economy. Right now China's in freefall, Europe's on fire, oil producers the globe over are on fire, and U.S.  consumer spending, which was the tottering keystone holding the world up from a serious global recession, is starting to flag. So given all that, you gotta ask yourself how many companies in the south bay are over-valuated? If a lot of them go bust (again) where does that leave a given investment? There's a lot more old money in the bay now than there was in 2008, but how many of those cash buyers still have a lot of their capital in retirement mutual funds. And there's a lot more Chinese (and that means iffy right now) money here this time around too...  That's not to say there aren't good deals to be had even if the macro picture goes badly, but ideally at this point you may want to look into one of the many less common asset classes that'll do well (or better) in hard times along with hot times. 

In terms of deals, one of the best entry deals you could get into is a multi-family unit you live in - ideally a four-plex. That way you can still benefit from a very low down payment on an FHA 203B or 203K loan (3.5% if you're credit is halfway decent), and if you time it right and are patient for a good deal, you could generate positive cash flow off the same building you're living in, AND build up a lot of equity fast, and ideally live closer to work.

Don't shy away from properties just because they'll need some work. Those are often the ones with the most upside potential, and the 203K (either partial, which means sub $30K renovation, or full, which means over 30k renovation cost) includes the renovation price in the loan for a slightly higher interest rate (but that rate is cheaper and easier to get than a construction loan).

The turnaround on FHA loans is often a little slower than conventional loans, so you'd be well advised to find a good mortgage broker or banker that works with them principally - a person with a "can do attitude." And if the market's so hot in your area it might be difficult to get a 203k processed quickly enough, that's a good sign the market is too hot to buy.

Lastly, know all the rental laws and eviction laws in the area you want to buy in. Any rent control or equitable eviction laws? Any protected tenancy laws? It's vital to know the ins and outs of owner/tenant regulations BEFORE you buy in a given area, and always do a very thorough credit and character check of every prospective tenant. By far the easiest way to get rid of a problem tenant, is not let him or her into your property to begin with. If you do all this, I think you should be good. I'm just starting out myself, but learning from some of the best.

Hello Everyone, 

Can any of you tell me where I can get a copy of a Chain of Title without the house being in escrow, getting a preliminary title report done, etc.? It doesn't have to be completely up-to-date. Just trying to see if there's some city or county office or somewhere I can see one or view it for free.

I'm a student of Real Estate at Merritt College in Oakland, California. I'll be getting my CA sales license in about a month, a Washington state broker's license in a few months, and a broker's license in CA in a couple years. I plan to start in sales, then move into multifamily investments, and finally focus on sustainable development and mixed use properties.