All Forum Posts by: Becca F.

Thanks Alan, finally someone who knows about this code. Only one other local investor knew about this. There seems to be a lot of "handymen" (unlicensed people) performing work costing over $1000 in the Bay Area. 

There was another guy I talked to and I asked him for his contractor license number. He refused to give the number to me but claims he had a contractor license. He said he is charged a fee per job for "using his contractor license" I've never heard of this - don't contractors pay an annual fee regardless of whether they do 20 or 100 jobs a year? 

I think he lied and was pretending to be licensed. He didn't look at the fence and give me a quote. At least the other two told me they were unlicensed when I asked for their license numbers.

I asked Contractor #4 (the fence company) about these lower quotes and she said they come back and fix a lot of fence issues done by unlicensed people. I'm  going to have licensed person (a contractor, not a handyman) do the new fence. 

 Great advice. A roof is good for about 20 to 25 years? Can it go 30 years? 

Not to derail the topic but I posted this in the General Real Estate Investing Forum about getting a new wood fence. No one replied lol

https://www.biggerpockets.com/forums/48/topics/1263208-licen...

The short version: should I replace an over 50 year old wood fence (I think it's closer to 55 to 60 year range) in the Bay Area? Or do the band aid solution and replace a few loose boards and posts for $945? Fence isn't subject to extreme heat but there is moisture coming from the San Francisco Bay and Pacific Ocean (house isn't right next to the water). I think I will power wash and stain the fence myself if I get a new fence. 

I'm not sure what you mean by alignment question but I wish I had asked how does a property manager determine if a repair that a tenant is requesting is due to malfunction of the system or part (so the owner's responsibility) or something the tenant is doing either intentionally or unintentionally to cause something to break. In the second situation, the tenant should be responsible for repairs and pay for it (not the owner). 

I've noticed that larger property management companies who do things all digitally will automatically do the repairs if it's under a certain dollar amount and bill me/take it out of the rental amount (as the owner). I started asking a lot more questions now when I see a repair notification. 

Are you trying to put 10 to 20% down on a primary residence and house hack in the East Bay? If you're buying a single family your roommates would help you pay down the mortgage. If it's a 2 to 4 unit, if you lived in one of the units and rented out the other units, they would also help you pay down the mortgage. Would need to see the numbers and areas you're considering buying.

I'm deciding to replace a wood fence on a rental in the Bay Area. I have had 4 contractors look at the fence, two are licensed and two aren't licensed. They gave me estimates for demo of old fence, haul away old fence, install new fence, install new gate, new posts. Fence is about 100 feet but Contractor #1 measured it as 98 feet). I don't want any lattice work or any fancy stuff. 

Contractor #1 unlicensed:  $8850 (includes above listed and staining new fence) Wood Dog Ear Picket

Contractor #2 unlicensed: $6000 plus $1200 for staining new fence = $7200 total (verbal quote, he's supposed to send a written quote to me)

Contractor #3 licensed (a small sole proprietor): redwood fence, $9100 plus $1200 for staining = $10,300 total

Contractor #4 licensed (a fence company recommended by my GC who did the renovation on that home) = $10,508 (no staining) redwood fence and getting quotes for a company that does staining. 

In California, my understanding is that an unlicensed contractor cannot charge more than $1000 for work done (it used to be $500). So technically Contractors #1 and #2 aren't following the law. Obviously a new fence is going to cost much more than $1000. I asked for different opinions and one person said it's not electrical or plumbing work and it would probably be ok to have an unlicensed contractor put up a new fence. Another investor friend said if I use an unlicensed person if the fence falls over (one side of the fence is shared with a neighbor) I would be liable.  I'm leaning towards Contractor #3 or #4 (both licensed). Or is it not a big deal to use an unlicensed person for a fence? As far as penalties would I be liable for using an unlicensed person or does that fall on the contractor? 

I mentioned this to a few CA investor friends and no one has hear of Assembly Bill 2622. 

Penalties for using unlicensed:

https://www.cslb.ca.gov/contractors/journeymen/journeymen_un...

https://contractorexamschools.com/understanding-californias-...

Here is the wording from CA Assembly Bill 2622:

https://contractorexamschools.com/understanding-californias-...

To give the complete picture, the fence is over 50 years old but has stood up pretty well but one side has loose boards and a few loose posts. There is quite a bit of green stuff and dirt on the fence when I power washed a section of the boards.  The cheap way to do this is just me power wash the fence and have someone nail up the loose boards and install 2 new posts. That estimate came out to $495  and $450 for a new gate door (by Contractor #4) so $945 total. Then I either re-stain the old fence myself or hire someone to stain it. I thought wood fences last 30 years from my brief research. 

Thoughts on what to do considering the above? Licensed or unlicensed contractor? Get a new fence (which would add value to the property) with a licensed contractor or just do repairs and get a new gate door and try to get a few more years out of the fence? 

You're back! Maybe temporarily. I used to comment and post frequently and this has decreased a lot in the past month. 

Not to scare away beginning investors but I do feel that many of them probably saw on social media that real estate is a way to reach "financial freedom and build wealth". One of the last few comments I made on an aspiring investor's post was on a 22 year old who started his first day on a corporate job and hated it. I think maybe looking for some magic formula so he could get into real estate so he could quit his W2 job - there were two experienced investors who said it takes years to build up portfolio and I think it was a huge reality check. This person didn't ever respond back to our questions to him. 

I think it's much more difficult in 2024-2025 with high on market prices and higher interest rates. It's not like 2010-2021 or 2008 or before that. I tried to give him some hope with if corporate job isn't for you, maybe consider other career paths. If you're miserable at 22 and don't change your mindset, that's a long sad life. There's no get rich quick in 5 or 7 years, can't click on a property on Zillow, buy it and expect it to start spitting out money, which could have been maybe been done in 2014. 

Maybe it's just me but I'm noticing a lot of people in their 20s that have barely begun working but hate their jobs and want to "retire early", FIRE, "passive income", financial freedom, or whatever social media gurus are posting. When I was growing up I saw people who worked years and bought California property (when it was a lot less expensive) and now they are reaping the benefits 15 to 30+ years later - no one quit their job in 5 years of buying a rental. 

There is a lot of spam with people trying to sales pitch something. Then copy and paste and ChatGPT. 

To the new investors, please attend local meet ups and talk to people in real life that invest in your market or out of state, walk properties, see how renovations are done, ask investors and contractors, etc. You can't invest in RE by being online all the time. I attend local meet ups all the time and am still learning - I talk to my RE friends who invest in California as well as other states and there are so many things to consider, pivoting when one strategy you planned isn't working etc. One market may work well for Investor A but be not aligned with Investor B's goals. 

@Aaron Phifer 

I recently flew to Vegas with many California investor friends and we went around with an agent to look at homes. We focused on southwest Vegas and Summerlin. I would agree with Eric's assessment. My group looked at all single family homes. There was a small group who went and looked at multi-family (I can ask for details if you would like to know more). I don't know Vegas very well but since you live there you would know the different areas much more. 

Here's my feedback about investing in the Midwest since this market is pitched a lot to CA investors: much higher property tax rates. Nevada has one of the lowest property tax rates in the USA. My Indianapolis metro area homes are at 2.7% to 2.77% property tax rates. Of course the prices are lower than Vegas. My SFH in Indianapolis have a higher property tax than Vegas investors' property which are worth much more and the property taxes go up significantly. Being 2000 miles away is a disadvantage. Even if you get a property manager, you still need to be in constant communication.

If you're going to look out of state, visit the area multiple times and talk to local investors, someone unbiased who isn't trying to sell you anything. It's been said thousands of times on here, location, location, location. Buy a high quality asset not a Class C cheap home (I lost money with Indiana Class C, sold one home and plan to sell the other one. My Class A is doing well but I bought it in 2013 so much lower interest rate and purchase price than now). 

I would recommend househacking, maybe buying a single family and renting out the rooms but you would have roommates. If you can find a 2 to 4 unit in a nice appreciating area that might work. 

I've used Rentometer to get a first look for potential rents. I just typed in the addresses of the properties. I didn't start a paid account so I can't say what other detailed information you would get if you have an account. 

I found that it overestimated rents for one property and underestimated rents for other properties. Getting comps from property management companies or agents was accurate - they consider the condition of the property and if it has upgrades. 

I briefly looked into doing a 1031 exchange of 3 properties to one property.  I sold Property #1 with capital losses (Class C Midwest property with no capital gains). Property #2 will likely sell with losses. I have a huge bucket of passive losses that can only be unlocked by selling since I'm not a real estate professional. 

Property #3 will keep for now and I still have the carryover passive losses from Properties #1 and #2. After that if there's still a small amount capital gains, I'll pay the small capital gains tax. The fees I need to pay a Qualified Intermediary or 1031 to a DST (which has fees also) or to find a new property on a time constraint, not worth my stress.

I have a California investor friend who just sold two 4 units out of state and using tax strategy with a CPA, no capital gains even with the depreciation recapture (wasn't owned for long, maybe 4 years, rentals weren't performing great so losses with repair issues, high property taxes and high insurance costs). 

 I didn't expect a post that was 6 months old to show up in my feed again. I'd add to that: don't become a property collector. Don't buy a bad property just to say I own a rental. We're trying to make money. 

Someone can say they have 50 or 100 units - that tells you nothing about the performance of those properties. If over half of the 50 units constantly have repair or tenant issues,  I'd really question this situation.