All Forum Posts by: Gabe Radovsky

@Matthew Anderson have you actually looked at the numbers side by side for the different options you presented? Some quick back-of-the-napkin math indicates that you're currently giving your tenants about $11k per year in rent discounts on these 3 units (Assuming you could easily find renters at $875). If you raise each of their rents to $725, that's still over $5k you're giving away in rent discounts over the following year. Would you expect vacancy, repairs, marketing and screening to find new tenants to cost to you more or less than that? (I guess you also need to take into account the smaller discount you'd be giving them next year if you raise the rent slowly over multiple years).

Also, thanks for the reminder that investments in most of the country don't have to consider rent control at all! In California, rent increases are capped state-wide at 5% plus inflation for any multi-family more than 15 years old. Good motivation for me to buy out of state.

If your "cash flow" numbers don't account for these very predictable expenses, you're always going to have this problem, regardless of what property you buy.

PhD economists and hedge fund managers with large teams and complex computational models can't reliably predict recessions. Frankly, if you trust small time real estate investors, or your own gut, to succeed where those people have failed, then boy have I got something to sell you.

$800 monthly cash flow and $224k in equity are both amazing! However, that's only 4.3% ROE (800 * 12 / 224k).

Do you own properties in California? If your primary goal is to increase cash flow in the next few years, you might consider moving that equity to cheaper markets where you can get a higher ROE. If your main goal is increasing your net worth for the maximum cash flow in the long run, you should probably consider what market you're in and how much future upside other investors think there is in that market. (Credit to David Greene and his Long Distance Real Estate Investing book for those ideas).

@Sameer Kh when you say it cash flowed $1200 last year, is that after accounting for CapEx, repairs, vacancy, and any other predictable expenses?

LA city has loosened up a number of laws around ADUs as of January 1, including legalizing movable tiny homes as ADUs.

Do any investors in other parts of the country have experience with buying or renting out movable tiny homes or other types of non-traditional living structures? I like tiny houses a lot on an aesthetic level, and I like that fully constructed ones can be bought for in the neighborhood of $20k. Even accounting for electric, water, and sewer hookups needing to be set up, it seems plausible that buying one of these as a rental could offer a better ROI than constructing a freestanding ADU building.

Can confirm, in both the Bay Area and LA, there are plenty of neighborhoods which have few or no homes under $1MM, but still have rats around. It's not a big problem, and the amazing weather and quality of life more than make up for it (in LA at least).

Congrats, Mark!

Take this with a grain of salt since I'm just getting started and don't have any tenants yet, but ¯\_(ツ)_/¯

Very few people would tell you it's advisable or even acceptable to lie to your spouse, your employer, your friends, your kid's teacher, anyone else you're in business with, etc, to get what you want, or avoid a slightly difficult conversation, or avoid having to be "the bad guy". Why would you treat a tenant any differently? They're just another human being.

The best cash flowing market is Los Angeles, right?

😂🤣😭