All Forum Posts by: Account Closed

 Out of curiosity, what area codes are you focusing in on in Sacramento?  If you don't wish to share, then I completely understand!

Awesome!  I'm a newbie (and haven't acted on my own yet, have been more a tag along at this point) and it's refreshing to hear that others held their ground regarding something that seemed like a  good idea but rapidly lost its luster after a second look! Glad you didn't jump in feet first, hell or high water!

Almost sounds like a wholesaler without tying things up into contracts (which kind of defeats the purpose of a wholesaler).

Just for the OP's edification, here's what the Department of Consumer Affairs says regarding evictions:

"A landlord can terminate (end) a month-to-month simply by giving the tenant 30 or 60 days' advance written notice. (For an explanation of month-to-month tenancies, see Rental Agreements and Leases; for an explanation of 30-day and 60-day notices, see Giving and Receiving Proper Notice and Written Notices of Termination below.)

However, the landlord can terminate the tenancy by giving the tenant only three days' advance written notice if the tenant has done any of the following:276

• Failed to pay the rent.
• Violated any provision of the lease or rental agreement.
• Materially damaged the rental property ("committed waste").
• Substantially interfered with other tenants ("committed a nuisance").277
• Committed domestic violence or sexual assault against, or stalked another tenant or subtenant on the premises.
• Used the rental property for an unlawful purpose.278
• Engaged in drug dealing, unlawfully used, cultivated, imported, or manufactured illegal drugs.
• Using the building or property to conduct dogfighting or cockfighting.278.1
• Unlawful conduct involving weapons or ammunition.279"

 I'm planning on getting my feet wet out in the Sacramento Region and then working my way to buy/hold.  I'm going to take my vacations to go visit and connect with other BPers.

Take this for what it's worth, because I'm a newbie too, but...

1) I think it's easier to buy in your backyard because you know your market you can get a feel for your trends and you can actually see your properties on a regular basis.  You know what's affecting your communities and you can see the potential issues and changes that are coming.  I feel to do out of state buy and hold ownership means you need to have a lot of competent boots on the ground.  It's not impossible, people do it all the time, but you need to a) have people who know the market really well and can steer you in the right direction, b) people who can manage properties well (and without supervision or direction) and will keep on top of contractors for any rehab work that needs to be done).  It's hard to keep an eye on this when you're a 2 hour flight away.

2) Home-court advantage on easiness, IMO.

3) Either can be profitable.  I don't think California markets are particularly conducive to buy and hold right now (but again, total newbie, and I'm focusing on equity investing with family members).  I just haven't seen anything in which the numbers work really well (I could be completely wrong though, and I'm not great at the numbers at this point)!  Right now, I think there's more cash flow potential in other markets, but the problem is that cheaper RE doesn't mean better RE. 

4) You need to factor Property management into you calculations unless you want to be a property manager.  AKA build yourself another job!  Finding good property managers can be hard, doubly so out of state.  How can you be sure of what they're doing when you can't even see your properties on a regular basis?

5) I would get one property under your belt before you think about scaling your business up.  IMO you're putting the cart in front of the horse.  Starting out I think you should keep it local.

Not an expert by any means, but I think has a lot to do with your debt-to-risk tolerance. Leveraging allows you to scale your operation, but if something goes awry, you may find yourself with a lot of debt and no way of paying it back.

Welcome to BP!  Use the Learn tab at the top and I'd recommend getting a copy of J Scott's The Book on Flipping Houses to get started!  And of course ask tons of questions!

Best of luck!

Welcome to BP! Wish I had your foresight at your age!

 70% is the rule of thumb, and that's taking into account repairs.  It should be 70% of market value - the cost of expected repairs.  So if comparable houses are worth $100k, you want to purchase the house for $70k.  If you have to put in $10k worth of capital into it, then you want the purchase price to be closer to $60k.

Remember, the 70% rule is a rule of thumb, not a solid you must pick it up.  If the deal is good then something closer to 80% would be fine, I imagine (but I'm a new investor, so 70% is where I'm shooting at).