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All Forum Posts by: Becca F.

Becca F. has started 24 posts and replied 816 times.

Post: Looking for a few new potential markets

Becca F.Posted
  • Rental Property Investor
  • San Francisco Bay Area
  • Posts 823
  • Votes 1,210

@Rosario Aiello

I'm in California and have properties in the Bay Area and Indiana. I'd vote for Midwest for affordability and cash flow although I think the appreciation is much slower in Indiana (Indianapolis metro area). From 2013 to 2019-2020 my Indiana house increased in market value from $140,000 to about-$250,000 (based on the all the realtors calling me with buyers lined up during the sellers market). So that's about a 78% increase in 6 to 7 years. It's in a nice suburb with a great school district. I'm going to guess that a California property went up in value much more in 7 years. I have great tenants but my property manager is very cautious on increasing rents as to not scare tenants away. I'm keeping the house since there's no state where I could buy an upgraded house for $140,000 now with a low interest rate. It's also landlord friendly. My personal view is that there isn't a lot of job opportunities in Indiana and the salaries are low. One of the major employers, Eli Lilly announced that they won't be expanding there for political reasons. If there are other Indiana investors that have found good deals or are cash flowing a lot, I'd like to hear from them.

My California properties are cash flowing much more what my Indiana house does. I acquired these properties before 2010 so I'm not paying the high prices or property taxes of someone buying in the last 5 years. I won't be buying in California now and definitely not the Bay Area. Paying over $650,000 for a house that needs rehab is really steep with 20% down with mortgage payments at 7% to 8% interest will be more than current rents. All my properties are Class A maybe class B for my multi-unit and so far have had no tenant management issues in the Bay Area or Indiana (so far). As far as the Bay Area, someone paying $3000 to $5000 rent is unlikely to put holes in my walls or someone with a rent controlled $1500 apartment would be stupid to do things to get evicted (these are tenants living there for 20 years or more).  Most of my Bay Area investor friends have very specific things in their leases and have had an attorney review the leases. I've had investors suggest buying Class C in Antioch or Stockton would cash flow as much as Class A in the Midwest. I would rather pay a little more and have fewer solid Class A or B properties than buy 20 cheap properties and deal with tenant management issues. I've also had suggestions about doing short term (AirBnb) or mid-term rentals (business professionals and travel nurses) - I really have to think about this. 

I'm in also in the same situation - researching markets so I don't make a purchase I regret. I'm also looking in different states: Ohio, maybe Colorado, Tennessee, Georgia and Florida panhandle area. Someone mentioned above you can cash flow in any rental market if you're smart. Hope this helps!

Post: California Vs Out of State (really, but why?)

Becca F.Posted
  • Rental Property Investor
  • San Francisco Bay Area
  • Posts 823
  • Votes 1,210

I did a brief search of SFH prices for Brentwood and current rents (Trulia). The lowest priced home is $599,000 for 3 bedroom 2 bedroom. Most of them are in the $600,000 range. Rents are $2950 to $3200. Mortgage payment on a $680,000 house will be more than the rent and I'm putting 20% to 25% down for investment property. I don't see I could cash flow with interest rates being 7% now. I can't wait for something to appreciate in 5 to 10 years while being -$1000 or more every month. Then I'm leaving my children this huge mortgage with a non-cashing flowing house if I die.

I spoke with my lender and she said unless I'm buying multi-family it doesn't look good for SFH rents especially in California because prices and interest rates are high. There's no way I can buy a multi-family for $400,000, maybe a nice duplex in Indiana? I talked to an investor in Florida near the Panhandle (near 30A and Navarre Beach, Freeport and West Panama City Beach) who said I could buy a house for $425,000 to $450,000 with rents $2300 to $2500 (long term rentals) or $3500 to 4000 (furnished short-term or mid-term rentals) or a $250,000 house needing cosmetic renovations ($1330 mortgage payment with $1900 rent). His opinion is that Florida is a combination of California and Texas and I'd have better appreciation than Indiana. Those long term rents for the $400,000 houses don't look like I'd get a good return with current mortgage payments. My strength isn't in running the rental property analysis calculators. Now I'm thinking to not buy any rentals and buy some stocks or index funds, where I could easily escape if I need liquid assets. I'm so confused.

d the rents are currently $2950 to $3200.

Post: California Vs Out of State (really, but why?)

Becca F.Posted
  • Rental Property Investor
  • San Francisco Bay Area
  • Posts 823
  • Votes 1,210

@Amit M.

Thanks for the feedback. I'm a bit apprehensive about Antioch and Stockton. So far I have great core properties (in Bay Area and Indiana) and great tenants and definitely don't want to deal with crime and tenant management issues. The price points are still high to me. I looked at a few houses in the East Bay but were over $650,000 and needing work. 

A turn key property in the Midwest is do-able for me in the low $200,000 to $300,000 range (haven't done any rental calculator analysis yet, just searches and talking to my Indianapolis area realtor). I'm afraid of buying something that needs a lot of work but $100,000 to $150,000 is a low price range. I don't want to rush into a purchase but the interest rates keep going up. I haven't hit my number yet and my goal is to retire early/quit my full time job - I don't want to work at this stressful job for more than 3 to 5 years. 

Post: LLC vs insurance + umbrella

Becca F.Posted
  • Rental Property Investor
  • San Francisco Bay Area
  • Posts 823
  • Votes 1,210
Quote from @Nathan Gesner:

An LLC is useful for two things: anonymity and legal protection. In most cases, neither is warranted.

Warning: I am not an attorney and this can be a complicated topic. Please note the information provided below is a layman's definition designed to provide a basic understanding for the general audience. You should consult an attorney or CPA for your specific situation.

ANONYMITY: When you create the LLC, your name is recorded on the documents and published on the Secretary of State website for all to see. So you're not completely anonymous. If you want to be completely anonymous, you can use a Registered Agent. The Registered Agent will record the documents on your behalf so only their name and information appears on the documents. I've done this with my properties because I'm well known in my small town and don't want people to know what I own.

LEGAL PROTECTION: By placing your assets in an LLC, you are legally separating them from your personal assets. If someone injures themselves and sues, they will be suing the LLC and not you personally. If your insurance coverage isn't enough, they could seize the LLC assets, but not your personal assets.

Additional thoughts:

1. An LLC is not free. You can spend as little as $100 to form an LLC, or you could use an attorney and spend $1,000 or more. There are also additional costs of operating and maintaining an LLC, like separate bank accounts, annual report filings, tax filings, etc.

2. There are rules to follow! If you fail to follow the rules, you may open your personal assets to a lawsuit. An example of this would be mixing your personal money and LLC money in the same bank account.

3. You do not need a separate LLC for each property or a series LLC! Don't make your life more complicated than it has to be. Most professionals will recommend a separate LLC for every $1 million in assets but I don't think that's necessary. In my case, I have residential rentals in one LLC, commercial properties in another, self storage in a third, and my real estate company operates in a fourth. Some have more than $1 million in equity while others have less.

4. The need for an LLC is grossly exaggerated on BiggerPockets and other websites. Have you ever heard of a Landlord being sued by a Tenant and losing property? I've been on this board since 2010 and haven't found an example yet. You've probably heard of big Landlords losing property, but only because they were flagrantly violating Fair Housing, running a slum, or otherwise violating the law in an egregious manner. You are more likely to be struck by lightning twice. The vast majority of lawsuits against Landlords are for wrongful eviction, security deposit disputes, and Fair Housing Violations. Your basic insurance policy with $300,000 in liability coverage should be sufficient in 99.999% of all lawsuits.

5. The best protection for you and your investments? Know and obey the law. I manage around 400 rentals with 12 years experience and have never been sued once. Even if I were sued, I document everything and obey the law, so I won't be found guilty. Even if I were found guilty, the cost would be in the thousands, not in the millions. Insurance would cover it, I would pay the deductible, and no assets would be lost.

If you are in an area like San Diego where people are more likely to sue, a judge is more likely to find you guilty, and the payout is likely to be higher, then you may consider an umbrella insurance policy. This policy will provide additional coverage above what your existing policy covers. It's easy to obtain, costs very little, and doesn't require additional, on-going effort to maintain.


Thank you so much for explaining LLCs! Most of my small time investor friends in California (owning 1 to 4 properties, meaning a multi-unit building counting as one) don't have LLCs. They said the paperwork and taxes for an LLC would be complicated. The only person I know with LLCs has 11 properties. I was so confused about the process to get a registered agent in another state (Wyoming?) to have anonymity. Then I would need to change my estate documents (trust and will). I have 3 properties. I had a few people suggest I get an LLC and I would need to get a different LLC for each property - my lender said a few years ago that I would need to refinance the mortgage to an LLC. I've heard there are ways around that to change the recording on the deed without having to refinance the mortgage or triggering the due on sale clause. I purchased additional umbrella insurance beyond the rental dwelling insurance policies.

Post: California Vs Out of State (really, but why?)

Becca F.Posted
  • Rental Property Investor
  • San Francisco Bay Area
  • Posts 823
  • Votes 1,210

@Darius Ogloza

I appreciate your perspective about the Bay Area and that someone paying $5000 a month rent is most likely to be easier on the rental house than someone paying much less in rent. I'm going to go with California on the appreciation. I'm a Bay Area and Midwest investor. With my California investor friends here, those of us who acquired the property before 2010 are cash flowing positive with fewer properties than my Indiana investor friends. My Indiana house went up in value about 70% ($110,000) in 7 years, based on comps from realtors and the non-stop calls I got with buyers lined up in 2020 to 2021. I'm going to guess from 2013 to 2020 any Bay Area SFH went up in value much more. The Midwest is landlord friendly and I've had great tenants. I would say it's a Class A neighborhood with a great suburban school district. I bought the house for a low price already upgraded with a low interest rate so I'm keeping it for now. My property taxes went up up more than 150% because I lost the homeowner exemption (I used to live in the house until 2018) so this is why the cash flow is okay but not great anymore. It took the county about 2 years to figure out that it was being rented out. There's no Prop 13 or anything similar in Indiana.

With the Bay Area, I'm reading the landlord-tenant laws carefully. I have a renter in my SFH that I know personally so I haven't had to deal with tenant issues so far To maximize cash flow, there would need to be roommates. I would say it's a Class A neighborhood.

I was leaning towards a Midwest property for my next rental property since price points for SFH or duplexes are high in the Bay Area, especially now with the interest rates. I've heard good and bad things about going further out to Antioch, Stockton, Modesto and up to Sacramento. My thoughts were if people are leaving the Bay Area for Stockton or Sacramento those could be good potential rental markets or is this not a good plan? Someone also suggested Las Vegas to me and do an AirBnb. Would I cash flow more in those areas than in the Midwest?

Post: Should I become a real estate investor

Becca F.Posted
  • Rental Property Investor
  • San Francisco Bay Area
  • Posts 823
  • Votes 1,210

@Warner Alexander I've been a real estate investor for 3 years now. I considered becoming a real estate agent during the seller's market in California. I know someone who quit his full time job thinking it would be easy money and has not even closed a deal here and is trying to get his job back at a hospital. Also after seeing what realtors go through... no thanks I'll stick to my full time job (which is in high demand) and growing my rental portfolio. My buying realtor, in hindsight, was terrible even though he was a super nice guy but he caused me to overbid on a property in a seller's market in the San Francisco Bay Area. There are so many real estate agents and some of them are really bad. It's easy to be a realtor in a seller's market with 20 offers over list price but the market is shifting now and you really have to hustle. I'm going to be a lot more cautious about vetting my realtors now. 

You don't say what your full-time job is but echoing what the others have said, I would buy as many rental properties as you can if you decide to quit your full time job since you need the 2 years income documentation for a conventional loan. 

Post: Best lease agreement form to use in California and DocuSign

Becca F.Posted
  • Rental Property Investor
  • San Francisco Bay Area
  • Posts 823
  • Votes 1,210

@Nathan Gesner

My friend's attorney must be a member of CAR or somehow obtained access to the lease agreement form because that's what he's using (I didn't ask too many questions)

I checked the California Apartment Association and San Francisco isn't on the pull down list of counties...very strange.

I'm not sure how to proceed now.

Post: Best lease agreement form to use in California and DocuSign

Becca F.Posted
  • Rental Property Investor
  • San Francisco Bay Area
  • Posts 823
  • Votes 1,210

Which lease agreement form is best to use in California? Is it the one that the California Association of Realtors has? Does that form allow for adding a clause or addendum? I've read that it's difficult to add additional conditions or clauses to that form. My other investor friend said his attorney recommended the CAR lease agreement form. 

Also is DocuSign the best platform for signing lease agreements? I've used it for work before.I've heard of WeSign also. So far I have one tenant for a SFH and I guess I could use paper and pen but I'd be printing out a lot of paper. I'm not the most tech savvy person so whatever signing platform is easier to use and doesn't cost a lot of money would be preferred.

Post: Rent for roommate situation for SFH in San Francisco

Becca F.Posted
  • Rental Property Investor
  • San Francisco Bay Area
  • Posts 823
  • Votes 1,210

@Miller McSwain Thank you. How do you divide out the utilities (electricity/gas, water, trash/recycle)? For example would I just take a ballpark guess of $200 for electricity/gas and divide it into $100 for each of the two couples and since there hasn't been 4 people living there so I don't really have baseline amount on the previous resident's bills for that many people.  I don't know what the water bill would be. Its about $30 with no one living there (except when contractors did the work). If I estimated $100 or $120, then divide that out among the two couples. Hopefully no one is taking hour long showers with the drought here. And include that in the rent? Could I put an addendum that utilities would be re-evaluated in 6 months? 

 I'm still confused. If theoretically I could get $5400 for the 3 bedroom house but two sets of people are occupying 2 bedrooms, I'm not sure how to divide this up. 

Post: Rent for roommate situation for SFH in San Francisco

Becca F.Posted
  • Rental Property Investor
  • San Francisco Bay Area
  • Posts 823
  • Votes 1,210

I have a 3 bedroom, 2 bath SFH (1357 sq.ft) in San Francisco that I'm renting out to 4 different tenants (two couples, working professionals). The main level of the house just went through a complete renovation (all new electrical wiring, kitchen, bathrooms, appliances, recessed lighting and new paint and baseboards and trim casing in all rooms). There are two separate 1 car garages, washer and dryer, backyard (a pretty good size for San Francisco). There's a downstairs unit (a large room) with a bathroom which could be a potential studio apartment if I put in a kitchenette

I know the first couple personally so I'm giving them a slight deal. I'm having difficulty trying to find a market rate rent to divide among the two couples. Most of the rentals are apartments in that area, within half mile radius as most of the SFH are owner occupied.

Here are the Zillow Rents comps:

-  4 bedroom 2.5 bath condo(1655 sq. ft) for $5890. That condo has a view of the mountain in that neighborhood. 

- 3 bedroom 2 bath (1340 sq ft) Victorian house renovated for $7495.

- 4 bedroom, 2 bath house (2166 sq ft) for $8950 

- 1 bedroom (877 sq ft) apartment for $3195 right across the street

-  3 bedroom 2 bath apartment  (1471 sq ft) for $4895

The $7495 rent seems very high and my house isn't a Victorian but built in 1957. A realtor I know suggested charging $2000 for master bedroom with private bath and $1700 the other 2 bedrooms who share a bath. The makes the total $5400. He didn't give me comps. It's likely one of the bedrooms won't be rented out for a while since the two couples know each other and to get a stranger in there would disrupt the household balance. My thoughts were $1900 for the couple I know, and $2000 for the other couple who would have the master bedroom and private bath (maybe $2100). There are 3 cars (the second couple only has 1 car), so each couple would get to use the 2 garages. So that's $3900 to $4000 a month total rent. Is that low? I'm not trying to price gouge them but that renovation cost me a lot of money. 

Also I'm paying for PG&E (electricity and gas) and SF Water since I can't meter each person's usage. How should I bill them? Include a certain amount in the  rent? Bill them separately after I get the bill and divide by two (for each couple). When the owner lived there the PG&E I believe was somewhere between $100 to $180 a month for one person (who ran the heat constantly when it was cold). 

The second couple needs to know soon as they need to give notice to their landlord in 2 weeks (their current rent is a $2000 studio apartment). Thanks for any help you can give. I'm new to the SF rental market. My other rental is in Indiana. I'm having them all fill out a rental application and running a credit and background check (I wouldn't necessarily have done a check on the first couple I know but my friend advised me to).