All Forum Posts by: Stephen Masek

1) You would be living very dangerously with such a deal, unless you have plenty of reserves.

2) A big part of the problem is using a loan, becoming a slave to the lender - you do all the work and have most all of the liability, they have enough of a down payment that they have little risk. Great deal for them, lousy one for you.

3) The return is too low. We're in escrow now on two houses - one built in 1969 for $49,000 which will rent for at least $750 (we have another nearby with a Section 8 at $835, so it might even be better). The other for $115,000 is in an excellent location, was built in 1997, and should rent for $1,200. That makes the cost for those two $164,000 (plus closing), with a gross rent total of $1,950. The 1997 house has a 4 year old roof, and the 1969 house was just rehabbed (new bathrooms, new kitchen, etc.), so we do not anticipate any near-term capital needs. We're buying them with cash.

4) Single family houses are easier to sell than duplexes, as there is a far larger market of buyers, and you can sell one at a time.

By design. We diversify our risk being in multiple states. Although there is a general economic mess now, different places will have different economic situations. We now have them in California, Nevada, Texas, Tennessee, Indiana, Georgia, and Florida. We've also had them, pre-bubble, in Idaho and Washington, but sold all but two when we knew the bubble was going to pop.

We simply look for good deals, and prefer newer-nicer, but have two older ones (1969 and 1974) which are excellent cash flow.

Jeff, what is the name and where and when?

Westminster is city in Orange County.

Anyone with any size bankroll can do better investing elsewhere, as the rent to purchase price ratios here are no good. Yes, I bought two houses in Victorville in 2012, just as rents were dropping, but they have appreciated. One is located near a new overpass, so we knew its value would rise substantially when that is finished (I think this month).

Any landlord not following what is going on in the legislature in Sacramento is making a big mistake, as there are some bills extremely adverse to landlords . The apartment association magazines, such as the ones published by the Apartment Association of Greater Los Angeles or the Apartment Association of Orange County, are excellent for keeping up to date (see their web sites). My company is a vendor member of several apartment associations, so we receive hardcopies of all of their magazines, and attend many of their events to meet other investors and the top people in the industry.

You may wish to join the Apartment Association of greater Los Angeles to obtain a vast amount of important information for landlords.

We recently did not renew a tenant in a very nice newer (2006) house in an excellent neighborhood in Las Vegas, as she kept leaving the trash can in front of the garage, violating HOA rules, and id not pull a few weeks (the yard is mostly 3" rocks), drawing a fine from the HOA. We own it outright, so we did not hesitate to instruct our manager to get rid of her.

As Marian mentioned, the new nicer ones have the appreciation potential. The older ones may have better cash flow.

I've heard several landlords with decades of experience, one also a well-known attorney for landlords, say one of their key screening methods is making surprise visits to the current residences of applicants.

Not on the face of it. You could use that same money to buy two single family houses, one older C-class and one newer A-class, with a total rent per month of $1,900. The SFRs are far easier to resell, and you can sell just one of them.

What kind of work would they do? If it involves applicable tasks, you will an Illness and Injury Prevention Plan (IIPP), and may need training and safety equipment.

I live in a subdivision in Orange County with houses selling at $900,000, yet my wife saw one for rent today at $4,000. That would be a really lousy return on a $900,000 purchase. The multifamily stuff here, even in bad areas, can be $150,000 per unit. A real estate agent licensed since 1970 spoke at the June apartment association meeting in Orange County and told those gathered that it is time to sell apartments here and buy in other states.

Before buying in OC or anywhere in California, also follow what is happening in the legislature. They reconvene Monday, and there are some bills tremendously adverse to landlords which could pass.

As for apartments, what is happening is that older warehouse and such buildings are being torn down to make way for apartment construction. My company has inspected two such buildings recently. So, there is land, it just has something else on it.