All Forum Posts by: Bill B.

Guy, Please check your modern American policy. I seriously just bailed on 3 properties insured by them last month. They inserted a maximum water damage coverage of $18,500. I don’t have any multi family insurance but I have 12 sfr between 1800-3400sf worth $250-$400k each. I have $2500 deductibles with $300k insurance limits. (Where Umbrella kicks in.) they cost a total of $6494. So less than $550 each. That does work out to $2200 for a $1.2mi fourplex but that’s with an “expensive but dependable” company. Main reason for post was to warn about American modern. They switched the water limits on me a year ago after using them for 3 years with no claims. (At the time Allstate had a 6 policy maximum but my agent wrote for an exception.)

The renters insurance should pay the renters for damage to their property although they may turn around and sue landlords insurance company. This sounds like a solid claim against landlord insurance company assuming it was done legally. Otherwise the landlord should probably pay out of pocket fast, and be happy no one was hurt.

@ola Danits Am I missing something with your loan math? You have an ending balance higher than the starting balance? $184k minus 20% equals $147,200 loan. But an ending balance over $150k? I didn’t notice the City but a fourplex for $184k sounds great before commercial space. Any chance of moving in to a space for low down house hack? Even not living there a bank should accept 20-25% down investment. Under 7% for sure.

Sorry @Jeffrey Leung,

I thought you were comparing us to the posters home state of california. 

To the best of my knowledge it’s 3-5 day pay or quit, 24 hours after 3-5 days you got to judge, he gives you paperwork for Constable and next business day they lock them out. Start to finish might not be done in a week but 2 weeks should be easy barring any screwups by landlord. Plus there are “100’s” of companies here that will do it for almost nothing either to tack on their fees to Tennant or get your future business. The constables end up being the most expensive part. $24 plus $2/mile. 

@Jeffrey Leung 

Las Vegas isn’t landlord friendly to you? It MIGHT not be the most friendly but I put it in the top 10%. 5 day pay or quit and then the constables if they aren’t gone. In almost 20 years with 12 properties I’ve had to post two pay or quits. One paid, one vanished so maybe someone will say they’ve had horrible experiences but I doubt it would be government caused. What made you think it wasn’t landlord friendly? In many ways It is slowly following horrible California examples, but it’s resisted most of its real estate ideas. 

Las Vegas is way more expensive than 5-10 years ago but if you live in California you’re choices are vegas, Phoenix or far far away.

@terry Lao

sorry terry, figured you’d be able to sell them for at least $100k per unit. 5% 30 year loan on $95k is $510/mo. Could you seller finance them for $100k with $5k down? (If they are paying over $550/mo rent they could afford utilities.) you could play with interest and sales price to make purchase less than current rent. 

I did my bulk refinancing right. I have 2 x 4% 30 year loans, some 3.75% 30 years and a couple 3% 15 year loans. 

Are the utilities higher because it’s a 4plex? My water is $30, sewer is $20, garbage is $15. (2400sf single story with a pool but just two adults in it.)

$150 per unit seems like a lot of HOA. Do you charge your tenants for any of those utilities or just charge higher rent and advertise that it's all inclusive?

Have you looked in to/is it possible to take one of your fourplexes and separate it in to four condos and sell the units separately?

I get what you’re saying about the commercial loans. I ran in to the same thing when I was offered a commercial portfolio loan wrapping 10 mortgages in to 1. They just glossed over how it was 30 amortization but callable every five years.

I kept asking about what if there isn’t any affordable financing when they called it due? What if I had paid off 80%. They’d just take all the properties. 

I didn’t see a way in to those 12-50 unit multis that didn’t put all my money at risk when the loan was called except doing a 1031 with enough paid off sfr to pay for it in full. I have heard lately about Fannie and Freddy Mac small balance loans. Supposedly non-recourse, fixed rate, 10+ year loans. 

@Terry Lao

Hey Terry,

On the way to lunch today I noticed a couple different blocks and blocks of small multis on Decatur. Then I remembered to talking about joining the HoA for your fourplex. Is that the kind of fourplex you own? One of 10-50 identical ones in a group? If so, how is it different than owning a traditional stand alone fourplex? (What does the Hoa cost and what do they do for you? Any additional differences.) to be honest I never looked at that kind of fourplex only stand alone. 

Thanks

-B

@Robert Adams

@Account Closed

Thanks for the info terry. I’d love to see some of your properties and even areas/buildings you’d consider next time you’re in town. Keep me in mind if you find something a little larger you’re interested in. 

Ps. Clark county was second fastest growing county behind maricopa (Phoenix)

@terry Lao @jennifermatsumoto

1 in 1999 and 1 in 2001. Both of which almost tripled 6-8 years then dropped to about 90% of purchase price.

1 in 2009, 1 in 2010, 4 in 2011, 1 in 2012, 1 in 2013, 2 in 2015 and my primary in 2014. All of these have done nothing but appreciate. The 2009-2013 properties all doubled or more by 2015. The 2015's and primary are up maybe 30%. But none of these were bought with any skill or direct marketing or any magic. I made tons of offers on "dirty, empty, abused" MLS listings. Usually only about 10% less than listing price. I regret to this day the 4 I didn't buy at list price that have of course more than doubled in a few years. But I knew I had just bought "the same house" for $5000 less in better shape. So I lost $100's of thousand to save $5's of thousands.

You’ll have to ask Terry if I’m correct that there are no small multis,in good neighborhoods that are less than 30 years old, but I haven’t seen them. There was a super sweet multi at Durango and 215 (north side) that sat empty for 5 years after being built but I could never find anyone to talk to about it. But it looked closer to 20 units than 4. They are also building 3 massive multis by the Centenial library up north. 

There is empty land but it’s $140k for a 1/2 acre lot. Before you for utilities and if you happen to be the last empty parcel on the street you’ve just invited the curbing, sidewalks, sewers to be built and assessed to you and your neighbors, welcome to the area. Almost all the land for developers is being sold by the BLM. So it’s farther and farther out and more and more expensive. They’re really pushing the south west valley since that used to be barren wasteland. If the cheapest thing they can build, (excluding 3 story 1400sf disasters), is costing them $300k and selling for almost $400k with zero upgrades, landscaping, appliances, etc, I just don’t see it as an impact. They sold 3400 new homes last year and they were excited. That’s one month’s worth of sales. 

If you lived in the Midwest I’d say you have better returns there don’t buy in Vegas, but you have bad weather and little appreciation. Living in California I really don’t see you have many if any better options than Vegas. You could talk about Phoenix or anywhere else in Arizona but I consider them vegas without the shows, the restaurants, the gambling, the tourists, the excitement, and they tack on state income tax. You can probably fly to vegas for $50? Drive for the fun of it? Write off the trips. 

In conclusion: yes, you shoulda bought 5 years ago, but that’s true of just about every market in America.