All Forum Posts by: Jason Kosowan

From a buy-and-hold perspective, my best performing property is a condo, so sometimes condos do have a better cashflow than SFHs, mostly because of the lower price point. And because the condo market seems to always be softer than SFH, the negotiation can be easier too during purchase.

However, I still keep an eye on the condo fees for the longer term. You want to make sure that the management is good.

I guess the trick is to negotiate the price down enough so that even if the condo fees go up, you'll still have a lot of padding month-to-month.

Hello Arthur

Thanks for following up to my post, it gave me something to think about. I don't think I'd consider going back to renting, but getting equity out to get more rentals that cash-flow seems like a good longer-term move than just keeping the old place and hoping that rents keep going up.

You've got quite a few properties already in such a short time, that's great! Is your "day-job" in the real estate field as well?

It's funny, I really wasn't that interested in RE a few years ago, but when I saw the prices drop so fast in '08 and started to do the math, I had to try it out.

Anyway, just wanted to say "Hi" to a fellow CA investor.

- Jason

Hi everyone

I've posted a few questions on BP and was given very good advice and information, so thought I'd try it again. :)

I bought my primary residence a few years ago but it's too big, too expensive, so me and the Mrs. want to downsize. The house itself is in a very good area (it held it's value even during this down time) and I can definitely foresee it as an appreciating asset in the next 10 years.

But, right now, rents in this area will not cover the mortgage and insurance. It's short by about $100-200 / month.

I have enough cash to get a loan for another (cheaper) place without selling the current house.

From an investment standpoint, what should be the next move?

Should I sell the current house, rent it out or something else? If I keep it, I'd have to shell out a couple hundred a month to keep things going, but once/if rents "catch up" with the place, I'll have a strong asset for the future.

If I sell and put all my money into the new place, my living expenses will be very low and could be covered by my rental income.

Some other options: Sell it using seller-financing in some sort of wrap-around-mortgage deal. Don't move at all, just get another rental with the savings.

Thank you everyone for your replies. The BP forums, as usual, come through. I guess I was thinking that because of the lower price point of Lonnies that I'd have to shorten the length of the loan, but I didn't know by how much.

What threw me is that all of the Lonnie examples that I've seen are for a few thousand dollars at most. I wasn't sure how to get what I wanted out of the higher-price-point California environment.

This definitely shows that I need to read a lot more on Lonnie deals before attempting one.

Thanks again - this advice potentially saved me from making a costly mistake.

I think Jak is right.

Unless you inherit a large unit there(in which case, you're probably set), most places in the Peninsula are a very bad deal. (Possible exceptions are South San Francisco / Daly City).

That being said, East Bay and Central Valley are a much better deal. I have a couple there and they cash-flow reasonably. Oh, and get familiar with Sec8 regulations.

Has anyone tried to do a Lonnie in the Bay Area? It seems that the for-sale MH listings here are a lot more than some of the prices that others are quoting. (e.g. rather than a few thousand for a cash-deal, I've been finding MH listings that start at around 10k)

I have not done a Lonnie yet and am willing to try, but this seems like the numbers are really skewed on what should be a "smaller" deal.

Example: even for a small owner-financed 2-year $15k loan and 10% interest, the monthly payments would be over $600 / month. My impression is that this is supposed to be an affordable choice for lower-income people, but these numbers don't bear it out.

What do you think?

Thanks for the advice, David and Cheryl! I'll look into each of these

One of my friends owns a couple of condos in Vegas and, although he's doing ok on them right now (I didn't ask for exact numbers), his main concern is that Las Vegas is a one-trick pony with regards to being reliant on gambling.

Normally, that's not a bad thing, but these days a lot of the high-limit gamblers are not going to Vegas anymore, but to places like Macau. If this continues, it may skew the Vegas demographic towards smaller-time gamblers, which cannot support the big over-leveraged casinos.

I was looking at Vegas for my next investment a little while ago, but I'm not so sure anymore.

I recently posted on a similar topic related to mortgage limits. I've talked to a large lender about getting a fifth but they told me that 4 was the limit. For those of you here that have more than 4, who did you talk to to get over that limit?

Thanks to everyone for their great replies!

At this point I'll have more than 2 years of tax returns, so I'll keep those around and see what I can negotiate with maybe some smaller lenders.