All Forum Posts by: Ryan Landis

@Eric Li back in the day when I was a property manager for clients (it feels like yesterday lol) I didn't do room rentals so I am not 100% sure how it would work in that scenario with you living in one of the bedrooms. That being said, good, quality tenants, will typically do anything in their power to avoid an eviction/judgment/etc.  it would be a bit of a process, but they would be obligated to pay you if it is in the contract. I am almost positive you would not be able to take it upfront (there are restrictions on deposits in CA for furnished and unfurnished rentals and if they break the lease 2 months into a 12 month that just wouldn't work), but in general it is better to increase vacancy slightly to get better quality tenants (or lower price if you must - the alternative isn't very much fun).

@Cori Leste great question - as others have mentioned, you are in a very desirable market with great economic factors and job opportunities. You run across similar issues in a lot of the coastal markets (i.e. Bay Area, etc.). Not everyone invests for cash flow (not just appreciation, but sometimes it is asset preservation). Or, you also come across people with some deep pockets that made some money in the stock market/selling a company/etc. and they feel really good about the tenant quality and the likelihood of the investment not going to $0

@Maxine Kunimura it's tough because anytime a GC is any good, they likely will be booked out and the idea of going and taking a look at a property to do a job, knowing that you are not already under contract and going to close is tough. They may be willing to go out for a fee, but that gets tough from your end because you don't have it under contract yet either. 

The best approach is just be a little bit extra conservative and put together what you think is a rough bid to get an idea on costs. See if that makes sense, speak to the seller's agent about it, and if they are willing to play ball at half the price then it may be worth putting a bid in place.

Very interesting - had not heard of that before, but it makes a lot of sense when you think about it (if, and only if, he/she thought you were not going to ultimately close)??? Maybe he just has a client that buys regularly and you were sending him ideas and he just went and pitched them. I imagine these are low-cost properties, but if they are a couple hundred grand it could have just been seller agents slow to change the status on their listings? You do have a lot of examples, so I have to assume these are low priced properties that investors are actively seeking.

@Benjamin Herhold yep it works, the issue is most lenders require you to move in within 60 days of purchase, and with proper disclosure requirements/notices/etc. you can't guarantee that you will be in within 60 days on an owner move in with a tenant-occupied property. 

So, what you would really need to do (again there are situations where it may work) is buy it as an investment property with the lender so that you can take title and then issue an owner move-in. Some of the lenders can chime in if they have seen it work differently, but basically that is why you don't see this as often as you would expect in Oakland/SF/Berkeley.

I had a client working on one in SF for a condo and we were going to make it work until the attorney couldn't guarantee it happening within a 6 month period, which as you can imagine, doesn't boad well.

@Kyle J. Cooper I don't think you can truly go wrong either way. I carry a studen loan balance (because the rate is super low). Paying it off crosses my mind probably once a month (and I seriously consider it), but then I remind myself that my primary residence has a higher rate and I should just wait (my investment properties are at even higher). I think I will ultimately pay them off probably in the next couple of years, before my mortgages, just because I personally like the idea of getting them out of the picture. But if you can figure out a way to offset some of your housing expenses now, I think that is a good idea.

Hey, @Alyshia Holloway congrats on wanting to take the next step. Both a primary and a pure investment are good options, just depends on how you structure it. The cheapest debt comes on primary residences, but you can get a 1-4 unit, so if possible, try and find a 2-4 unit and get some rental income with it. After you move out down the road, you will be able to rent out all of the units and have a great low rate 30-year fixed loan on it! Not sure if basements are common out there either, but you might be able to find a SFH with a basement that you can rent out (acts almost like a duplex and usually a bit easier to do the real low down loans without having to go FHA).

@Brandy Carter the hardest part is in finding a brokerage where you will be able to be consistent and learn the trade. As the others mentioned, a lot depends on if you are trying to go full time vs. part, and the structure around it (I mention that as there are brokerages that don't always want to deal with the part-timers or the ones only looking to do their own deals).

The training is key, just to learn the trade and get exposure. But ultimately, whichever brokerage you join, as long as you are consistent with showing up every day trying to get the next client and working hard, you will do fine wherever you start. You can always change too! 

@Eric Li I would agree with what @Tony Lin said in regard to language around them being required until a substitute tenant is found. You can also play around with the break lease fee.

Something you are seeing though is the reality, there is not too much to enforce on someone if they decide not to pay unless you want to go down the collections/eviction route. People don't talk about it enough, but just because it is a year lease doesn't always mean they are staying for a year, unfortunately. 

Hey BP! Looking for a lender that might be able to help me out with a unique situation. I am purchasing a property that has multiple detached dwellings on 1 parcel. There is a combination of stick-built and 2 manufactured homes on the lot. Pretty flexible on how to structure it, ideally looking for something more long term (i.e. not a bridge loan or fix and flip type of loan). Rental income at the property should be able to get the DSCR above 1.25+ at market rents. Feel free to pm me if you might be able to help/have an option for a loan on this property. I can provide credit/deal experience/etc.

Pretty cool property as a rental, but the multiple detached dwellings and the manufactured homes are making it not fit in the ordinary loan box.