All Forum Posts by: Joseph M.

@Adriel Liwag  , Craft beer and real estate , a great combo! Was great to see you organize this meetup. We've spoken on BP , so it'll be nice to meet in person, will be coming from SFV so hopefully can be there by 6pm. 

Google News search on Englewood brings up a lot of articles about drive by shootings , a delivery driver robbed at gunpoint and tied up , guy shot during home invasion , boy shot by stray bullet , man shot sitting in a car , 20 year old woman shot while driving . These are just some from the past few weeks . always makes me wonder how many more don’t show up in the news too . Crime in every neighborhood, A lot of shootings and murders for a neighborhood with 30,000 people or so (2010 )

Ray Lai , how much longer do you see for the current cycle in San Diego ? That makes sense , with a downturn construction slows and gentrification slows . In L.A there was hardly any building going on because people couldn’t get loans etc . Recessions and downturns in housing hurt the areas at the lower end most . In L.A you didn’t see many REOs/foreclosures in prime areas versus lower end areas . Some of the lower end .. like parts of the San Fernando Valley dropped 50% from the highs . I wasn’t watching San Diego too close but I’m guessing it was similar there in regards to the lower end getting hurt a lot more than prime area.

@Mia Trasolini yeah breweries seem like a good one. Speaking of breweries SD has so many good ones. I took one of those brewery tours there before... was a lot of fun!

There is an area in the L.A area that isn't considered hip at all..but I saw a hipster type gastropub just opened up there. Makes you wonder if the area is changing..

@Jay Hinrichs , interesting story about the lot in Portland and investing in Charleston. It sounds like you have been early on quite a few markets before they blew up. Buying where people didn't want to live , but then seeing the potential of it becoming a place where people do want to live in the future. 

I remember you mentioned some land you purchased years back in Northern CA  for a low amount but now it's worth millions. Did you end up selling that land? Land it seems can go up much much more than a house if in the right area. But of course there isn't the income coming in usually...unless maybe you put a billboard or cell phone tower etc on it.. and there are taxes to be paid. 

@Matt Ellis , yeah I always wonder that too.  In L.A you practically never see small multis 2-4 units for sale with vacant units, of course they don't cash flow either which is a bit of an issue.. 

I heard the BP episode featuring a Chicago lawyer and investor. This is the one 

https://www.biggerpockets.com/renewsblog/biggerpoc...

He was talking about a lot of the laws specific to Chicago so I'd definitely recommend listening to that one and maybe consulting with him or another attorney if investing in Chicago. Some landlords have lost a ton of money by not doing the leases the right way etc. There was also an issue with security deposits and I believe he said it's better not to accept them because of the way the laws are. It makes it harder to evict.

Originally posted by @Tj M.:

Both homes are in the same area. I kinda would like a paid for house but not a must.

Why would I sell it to buy other investments when it would be a investment?

I would not buy if for what I could sell it for to be a invest but at what I owe on it now it would make a good investment.

 I probably should of been more specific. You would sell it if you could put the capital to work better (give you a higher return) in another asset. Keeping the house as a rental may be an opportunity cost. 

$2750 is a nice rent, but if the market value of the property is $400k , not so much. I wouldn't consider so much what you  paid for it years ago or what your mortgage payment is , but rather what your return /cap rate would be if you had to buy that property today. Would it even cash flow? 

If your cap rate would be 2% for example, that could be an opportunity cost if you could invest somewhere else and make say 6% cap.  Of course there is appreciation to take into consideration , do you feel the area the home is located will appreciate more than any other area? 

An example in my area there are homes for $600,000+ but they might be renting for only $3,000 month.  The landlord can only afford to rent them at this price because the house is paid off or their mortgage is tiny since they bought years ago. This is not a good return without appreciation. Of course Southern California has had high appreciation historically over the long term and especially the past several years ...but there have also been big dips too. 

I don't know Reno market really, but I have heard about new companies moving there and prices increasing, so it seems to be a good place for appreciation too. 

Apparently luxury housing went up over 53% there in a year according to this article, housing shortage they say.

https://www.realtor.com/news/real-estate-news/reno-nevada-luxury-prices-soar-amid-general-housing-shortage/

Are both the houses in the same area ? You said that you might be able to pay off your new home if you sold the old house . Is your goal to have a paid off house ? Interest rates are still pretty low now so I’m sure a lot of people would say sell and use that money to invest in other cash flowing property . Or maybe do a cash out and pull out money to invest But if your goal is to have the house paid off there is nothing wrong with that . I know some people say you should ask if you’d buy the home today at current price as a rental and if not then you should sell .

Henry Trinh , you mentioned an FHA loan , so you will be occupying the property ? Do you feel safe living in that area ? You said it is an ok property . So why are you worried about the opportunity passing you by ? I know you are eager and excited to buy something but a little patience can pay off . It doesn’t sound like this is a once in a life time opportunity , and most aren’t . Richard Branson has a quote: “Opportunities are like buses - there’s always another one coming “

Been to San Diego several times over the years but don’t know the area too well . It’s still SoCal though so some things are similar to la I imagine . High demand , limited land , etc I don’t think San Diego has rent control so that is good . I’d be looking to see if the city is planning any new investments in the area , new transit etc . Are there new developments planned? Google or Google News search the neighborhood name . Are new hip or trendy businesses starting to pop up ? Yelp can be helpful as you can put in the address of a property you are considering and see all the places nearby . Or search by “restaurants” or “bars” . I’d look more for independent mom and pop places that have that artsy edge , it seems once Starbucks or Whole Foods moves in there probably isn’t much upside . Since these neighborhoods are close to you definitely check out the areas in person if you haven’t already. Will you be managing the properties yourself or have a property manager ? If you don’t feel safe going there and it’s really that sketchy , I wouldn’t recommend investing, positive cash flow isn’t worth your safety . From L.A I have definitely seen that these neighborhoods can go up a lot . People get priced out of the hip area so they start looking to the neighborhoods nearby for affordable places to live and open their businesses . The up and coming /gentrifying areas can have higher yearly price increases than more mature markets. Kind of similar to stocks . The startup or up and coming tech companies can have big gains versus a company like Coca Cola . But on the other hand there is more risk .