All Forum Posts by: Jon Schwartz

@Alex K.,

For somebody in your position (strong savings, good income), I highly recommend house hacking and Airbnbing here in LA. I’m in a similar situation, and my longterm plan is to keep my investments in LA for at least the next decade, then sell my LA portfolio and buy buildings in growing southwest markets for cashflow.

In the meantime, while I earn a living outside of the my estate portfolio, I’m happy with limited cashflow while I become rich on paper. My duplex house hack didn’t produce positive cashflow this past year, but it did reduce my cost of living by thousands of dollars while adding about $200K to my balance sheet.

As for Airbnbing in LA, the rules are strict, but workable. You can’t Airbnb anything outside of your primary residence for less than 30 days at a time. You can Airbnb all 365 nights of the year; you have to purchase an $850 permit to do so. All of LA’s regulations are here:

https://www.airbnb.com/help/article/864/los-angeles-ca

The best Airbnb hack in LA — and I have two friends doing this — is to rent a private space that is legally part of your residence. A friend of mine is house hacking a duplex in East LA that, when he bought it, was a triplex. One of the units, a studio, was non-permitted and carved out of a larger unit. A 2/1 became a studio and a 1/1 — so my friend moved into the 1/1 and rents the studio to short-term tenants on Airbnb. Technically, the studio apartment is part of his primary residence; it just happens to have an exterior door and a kitchenette.

Best,

Jon

New short-term rentals in Anaheim are currently prohibited:

https://www.anaheim.net/574/Sh...

Best,

Jon

@Jose A Perez, search "los angeles real estate" at meetup.com, and you'll find several events. LA's a big city, so there's a real-estate-related meetup almost every night.

Enjoy your time here!

Best,

Jon

Maximus,

Getting into the game in Socal is hard, but you probably don't want to start here. First thing's first: visit the property and see if you trust the area enough to undertake a flip here. If somebody asked me to invest in a flip at Central and Florence, I'd pass.

Best,

Jon 

Tecora,

Is this property a single-family home? If so, it is not subject to CA state rent control or, as far as I understand, any municipal rent control.

Even if it is a single-family home, it is subject to the eviction moratorium. However, no-fault evictions are allowed under the eviction moratorium in the case of an owner moving into the property. More details here:

https://www.nolo.com/legal-enc...

There are several county-level evictions moratoriums around the state, so knowing what city your rental is in would help.

But long story short, if you're talking about a single-family home, it isn't subject to rent control, so you can decline to renew the release. If the tenants refuse to leave, you can evict them.

What is your PM smoking? It must be some of that good Cali stuff!

Best,

Jon

Shefali,

Here's the Long Beach STR policy page:

https://www.longbeach.gov/lbds...

There are a lot of details to review, but it looks like a thumbs up. A duplex through a fourplex is allowed to have one STR unit.

I have a lot of thoughts! A few that come to mind:

• Aim for 1 parking spot per unit at a minimum. Parking is a premium in almost all of Long Beach.

• Definitely buy south of the PCH.

• Because the eviction moratorium is still in place, I'd try to buy a property with one vacancy that you can renovate into an STR immediately.

• Lastly, use the AirDNA calculator (https://www.airdna.co/airbnb-c...) to estimate income from the various locations and unit sizes you consider. I wonder what generates more income relative to cost: a 1/1 near the beach or a 3/2 further inland. It'll be interesting to see!

Good luck!

Jon 

@Cameron Mertens, congrats on house hacking! I hope you've been able to save on your housing costs since moving into the triplex.

My advice is to talk to a lender or two before investing in any cashflowing real estate. Lenders like income streams that have two years of history; if you're a W2 employee, you need two years of employment in the same field, and if you're self-employed, you need a business that demonstrates the same level of income for two years.

If you buy some property for cashflow, a lender probably won't count the income until you've owned the property for two years. This is called "seasoning." I may be wrong, but I'm pretty confident this is the case.

I suggest just applying the full $200K toward your down payment. $200K is 20% of a $1M home; how far away are you from qualifying for an $800K loan? Are you absolutely positive you don't already qualify for an $800K loan?

Long story short, run your plan past a lender or two before making any moves!

Best,

Jon

@Zach Stiegler, I suggest going to meetup.com and searching "real estate," "real estate investing," and "multifamily." Those are probably the only keywords you need. A ton of meetups utilize meetup.com. I found a bunch in LA through the site.

Best!

Jon

@Salim Mhunzi, I don't have first-hand experience with this, but my understanding is that Section 8 tenants lose their voucher if they break their lease agreement. I suggest you hold your ground; you have the leverage here.

@Account Closed, it looks like you only posted for two months! What happened???