All Forum Posts by: Andrew Jones

Thank you guys for the replies. 

Any Bakersfield investors have an opinion on wether it is a good time to sell? My original plan was to hold forever, but prices have appreciated greatly. I believe I already missed the peak. Now prices seem to be stagnant and potentially on a decline with the oil prices down. Inventory is still very very low. Multi family units btw. So what do my bako people think? 

@Account Closed Yes, I would still recommend them. Daniel Holt is the name of my property manager. If you are looking to buy and hold then Bakersfield is overpriced at the moment. I know that might be hard to believe when you are from LA like me and see homes in Bakersfield in B- areas go for $150,000 for a 3bd/2b, but consider during the downturn you could get these for around $70k.  Just don't look at Bakersfield prices with "LA eyes". 

I have used Portfolio Properties for my 8 units for the past 5 years and would recommend them. They send me a monthly report and deposit directly into my bank account.  They respond to emails in a timely manner.  

As others have said keep going at it and making offers that make sense for you.  I don't buy much, but when I do, I make 20+ offers before 1 is accepted. 

I feel like I am in the same boat.  I bought two properties in Bakersfield in 2011 when prices made sense.  Prices have gone up dramatically since and no longer seem to work. 

Some of the price to rent ratios mentioned in the replies here do not meet my acceptable cash on cash return of at least 10%.   

For example 175k for $1000 rent would not meet my investment return goals. See the two scenarios below for what I mean.  (Please correct me if I am missing something here.)

Scenario 1: Financed Purchase

If you put 20% down and financed the remaining 140k at 4% and factored in 1% property taxes your monthly payment would be $814.21.  That leaves you $185.79 a month for maintenance costs and insurance.  Lets say insurance is a low $25 a month. That's $160.79 left for maintenance costs.

Lets say maintenance costs are an unrealistically low $50 a month. We have $110.79 left.  That's not including vacancies and property management (or paying for your time spent).  $110.79 x 12 = $1,329.48.   $1,329.48/$35,000 = 3.8% Cash on Cash return. 

Scenario 2: Cash Purchase

$1,000 - $75 (unrealistically low maintenance and insurance monthly costs) - $145 (1% property taxes, may be higher in your area) = $780. $780 x 12 = $9,360.

$9,360/$175,000 = 5.3% Cash on Cash return.

If I used the 50% rule on the scenarios they would have turned out even worse. Investors buying at these high purchase price to rent ratio make it harder for me to find something that is actually investible. 

As stated $1600 is not out of the ordinary to turn over a tenant, but the lack of communication with your PM is a problem. 

My PM is Portfolio Properties now and they handle all the repairs. If I have a big job to do I will get a few bids from different contracters and compare it to my PM's bid.

Anson Young thank you for the reply. I guess the same could be done in CA, but we have the extra $800 Franchise Tax so deal would have to a little bit thicker.

I would love to shadow someone in Southern CA that does this type of wholesaling in CA. PM Me (p.s. I drive and will buy the Burgers and Beers)

Anson Young could you elaborate on how you actually structure the wholesale deal? What do you do after you find a deal fitting your criteria?