All Forum Posts by: Jay Chang

The 50% rule is more accurate for areas where the properties are not as expensive. In areas with expensive properties, like LA and NY, the ratio is more like 40%-45%, and 35% for newer buildings. T-12 is good reference, but try to get a $/unit for each expense. Keep in mind that the $/unit for expenses like maintenance is going to be larger for smaller multifamily buildings, so speak to a property management team to confirm your underwriting before putting the property under contract.

Good luck!!

Not only is it important to have a strong presence on social media, it's also important to have meetups to attract real estate investors. All the successful real estate investors, such as Rod Khleif, Joe Fairless, and Adam A. Adams, use podcasts, meetups, books, blogs, and instagram/facebook.

Good luck!

May through the end of October are the best months for leases. Among these months, end of school is definitely the best time to have leases, so around May to end of June.

The worse time to have leases is around Winter/Holiday. Christmas and NYE time.

Hope this helps :)

Jonathan,

I am personally a big fan of Roth due to many tax advantages it provides. You should definitely invest enough money in your 401(k) to take full advantage of your employer's matching contribution. Use Roth 401(k) if you can. Here is my latest blog on 401(k) and IRA. https://www.biggerpockets.com/blog/401k-versus-roth-ira-pros-cons

You can use self-direct IRA later on to invest in investment properties if you like. Taking out loans from 401(k) to buy a personal property is also an option.

Colton, 

Checkout multifamilymasters on meetup.com. We are a national-wide meetup group and have a chapter in Phoenix. As you can already tell based on the name of our meetup, we focus primarily on multifamily. If you're buying only office or retail properties, it's still a great meetup to go to, because a lot of the skills and connections you acquire at our meetup can be transferred to other property types. We often invite professionals like syndication lawyers or market study specialists to speak at our events. Our mission is to provide value and education to investors. NO Sales pitches!

If you go, say hi to my buddies Gary and Kyle. I co-host the Downtown LA meetup with Gary.

 Kyle,

Good to hear that you're really getting into real estate. Los Angeles is a really great market for real estate. I am very optimistic about Los Angeles in the long term; however, I think the market is very expensive right now. I don't want to discourage you, but I don't think you'll find anything that will cash flow (in other words, your net cash after debt service) in this market. To get a positive return, you will have to rely pretty much 100% on the value appreciation. In my opinion, this is a very risky investment, unless you are an experienced investor doing a quick flip in the area. 

The three most important strategies in minimizing risk is:

1. Cash flow from Day 1

2. Secure Long Term Financing

3. Maintain a healthy capital reserve

Imagine you buy an expensive duplex in LA right now, and the market crashed 30% next year. How will this impact your investment? If you have sufficient capital reserve, then you can sustain the monthly debt service, but what if your term is coming due and the bank wants you to repay the loan? Do you have sufficient capital reserve to pay off the bank? In this case, you may lose your equity in the house. 

Alternatively, I'd suggest you look for other types of investments or simply hold on to cash and wait for the market downturn. It's hard to be patient, but it can be rewarding. 

Above is just my opinion. I could be completely wrong, so I'd love to hear other people's opinions!

Hi Jerry,

I also live in Los Angeles, and I do ground-up developments full time. Have you heard of MultifamilyMasters? It's a great meetup for investors looking to invest in multifamily nationally. I look at deals in Phoenix and I host the DTLA meetup. Hope to connect with you in person sometime!

Check out MultifamilyMasters We have different chapters throughout the nation. I host the one in DTLA. Our next meeting is on 9/18 at the WeWork @ Fine Arts Building. We meet every third wednesday of the month!

Investing in LA is tough. The uncertainty in rent control and the unfriendly laws for landlords aren't helping very much.

Have you thought about investing out of state? There are meetups in LA for people who are interested in investing multifamily properties in other states. 

The meetup event page: 

https://www.meetup.com/MultiFamilyMasters/events/263457928/