All Forum Posts by: Carrianne Mucho

@Jay Hinrichs you are a wealth of diverse knowledge! 

@Paul Post is curious to know what the value of the SFR would be after the improvements have been made.

I understand where your wife is coming from - there is at least one property in my family for which I will have difficulty making that decision when the time comes.  Like Embert said, not a terrible problem to have with the exception of your loss. 

P.S. user TIP: when you are replying here, be sure to use @theirname so the person you wish to address will get a notification that you have commented.  Otherwise, that person may not think to come back to check the thread.  You can also "vote" for posts you like using the green button under their photo (sort of like facebook or other social media sites). 

1. Awesome that you are considering investing at 23 @Joseph Cahill!  

2. I cant think of any good reason to pay $30K above market value. But based on your comments about the desirability, lack of availability and neighborhood, I would get a market value opinion from at least 2 or 3 local Realtors (its free and more accurate than Zillow or Trulia); or pay an appraiser so you know what the accurate market value is.  What the owner paid in 2007 is irrelevant to the current market value and to you. 

3. Vacancy.  Make sure you are able to afford the payments without a roommate.  You don't want to lose the property if your roommate leaves and you can't find a replacement for a few months. 

4. Payments and savings. Lender's basic qualification rule: Principle, interest, taxes, insurance, HOA, PLUS any other debts, should generally not be more than 45% of your pretax (gross) income. Common financial advisor's rule of thumb: keep at least 3 to 6 months of living expenses (including mortgage payment, taxes, insurance, etc) in savings in case of emergency or unexpected job loss.

Good luck to you in accomplishing your investing goals!  Do start investing sooner than later but be sure to find a property that doesn't make you "house poor." 

Congratulations @Leo Ka on beginning to follow your dreams! The Sacramento area is growing and has a variety of opportunities. I believe in investing in areas you can drive to so you can have better oversight and as much or little involvement in managing your properties as you wish; especially for a new investor. I'm located in Roseville and would be happy to discuss financing options. You are welcome to message me; see my profile for contact info and best wishes to you in your REI journey!

Welcome @Joshua Delarosa! I'm impressed that you have recognized REI as a wealthbuilding tool at a young age. It also sounds like you've done a good amount of research which is great - so far, you are doing things in the right order!

I think your next steps will be building your team of professionals.  As a new buy and hold investor, the quality of your team will affect your success.  You will need at least one of each of the following: contractor, handyman, Realtor, lender, and property manager.  Even if you plan to complete some of these tasks on your own, as a NOOB, it would be a good idea to have these types of professionals in your LOCAL network for consulting purposes.  

If your eyes are hurting from reading, try the podcasts; lots of good information there!  Have fun, best wishes, and feel free to contact me if you have questions about finance.  

 Paul, I am by no means a rental expert so I'm hoping you will get more direction from those who have more experience analyzing cash flow.  If you are including the cost of financing in your cash flow (sounds like you are), be sure at least that you aren't including principal payments as an expense since these go straight to equity.  Have you used the Rental Property Calculator on this site?  

There are different markets across this great nation which yield different types of returns.  Some seem to give great cash flow, but don't expect to have much, if any, appreciation in these markets.  California on the other hand is more of an appreciation play and if you can get cash flow on top of that = gravy.  It is good that you are getting familiar with prices and neighborhoods; I think that familiarity with the neighborhood you are investing in is important!  I know many have been successful investing out of their local area but I personally just can't find a comfort level with this...I'm too much of a control freak!  LOL.  If you have the skills, the best situation is to find a property that needs work, complete some value-add improvements, then you can raise rents.  House hacking is also an awesome strategy in CA because you get to lock in low property tax rates and it is relatively easy to cash out the equity you build in a primary residence and use it to leverage your next property.  

@Chris V. Interesting information; can you include the link to the full article?  It seems like there is a Bay Area migration happening here in the Sacramento area as well.  Are you feeling that too @Ryan Dixon?

@Paul Vang  what is "still expensive": rents? properties for sale?  Expensive relative to what? Both rents and property prices are still increasing, although the rate of increase seems to have slowed. A year from now, or 10 years from now, might you look back and think they were affordable?  I recall back in '02/'03 so many Sacramento area clients were saying things had gotten expensive.  But the Bay Area migration had barely begun...  

What kind of properties are you looking for and what is your investment strategy?  

@David Gonzalez Click here: http://maps.assessor.lacounty.gov/GVH_2_2/Index.ht...

to search the LA County Assessor's site.  They will have the mailing address for the owner. 

@Abdul Azeez Although this didn't work out for you it sounds like you learned alot from your experience!  I'm surprised every day by how many people are not aware of the Homestyle Loan.  In my experience, the biggest reason these loans take a bit longer is due to the time it takes for the borrower to make decisions about what work they will have done.  If you know what you are doing upfront and avoid being indecisive, it will be much smoother.  It is much more affordable than private money (except maybe in a case like this where you are paying $100 a day!).  

Since your renovation in this example was under $35,000 there is another loan (exclusive) that might have helped you and is less involved than a Homestyle or 203k...same concept though.  Google "EZ Conventional Renovation loan" (or contact me) for details.  

I also second @Percy N.'s recommendation to read J Scott's "The Book on Estimating Rehab Costs."  Until you gain at least a basic comfort level with estimating costs, you are at the mercy of the contractor whether you pay them to give you a bid or not.  At minimum, you should get familiar enough with costs so you will know if their bid is fair or inflated.