All Forum Posts by: Jon Schwartz

Jon Schwartz has started 37 posts and replied 926 times.

@Bruno Mauro, keep it!

1 Vote

@Ana Marie B., yes. That’s what I was asking. Where is the evidence that Prop 15 is the first step toward reversing Prop 13? In other words, where is the evidence that the proponents of Prop 15 plan to continue after Prop 15 passes to completely remove Prop 13 protections for home owners?

I’m well aware of what Prop 15 does. I’m asking for any actual evidence that the next target is residential property taxes.

Thanks!

0 Votes

Originally posted by @Jennifer S.:

Would you do it? If not, what do you suggest?

I own a 4-plex in LA, trying to refi and pull out cash to buy multifamily (5+ units) in Florida. My current rate is 3.75% fixed. Owned the building for 7 years. Rates I'm getting for refi are much higher. Many have told me they're not lending on multifamily right now. I've spoken to two residential lenders that will refi.

The best said:

-Non-owner occupied: 4.5% paying anywhere from 2% to 3% points ($56k)

-Owner occupied: same rate of 4.5% + 1.5% points ($36k)

-I can pull out a max of around $571K.

-My new mortgage (not including points) goes up about $3k per month.

Jennifer,

What's your current NOI on the 4plex? Will you still have cashflow after the debt service jumps $3k?

$570k can go a long way in Florida! How confident are you in your return expectation there?

As I'm sure you know, it's a math problem... but a tricky one as maybe the FL variables aren't dialed in completely?

Best,

Jon

0 Votes

Originally posted by @Michael Sueoka:

Hello! I'm hoping to buy a primary home in Los Angeles (30% down) where we can add an ADU (as a rental) and also remodel the primary home (the remodel will be light cosmetic work).

What would be the best way to go about financing the addition of the ADU and the remodel of the main house?

Michael,

Not to go off-topic, but have you considered buying a duplex?

Best,

Jon

1 Vote

Originally posted by @Bruno Mauro:

Hey all,

I bought my first property a 2BR/2BA In April of last year (before I found BP or how to calculate cash-flowing properties), been living in it until about a month and a half ago. I'm moving out of the country at the end of the year to study abroad, and found a property management company to take care of things.

Got a tenant in place already, here's the breakdown:

Rental Property Cost Breakdown

Mortgage/Insurance/Taxes/Escrow: 1215.35

Property Management: 137.5

HOA Fees: 366.56

Total Cost: 1719.41

Rental Income: 1650

Loss:69.41

This isn't even calculating maintenance costs...

In the second year, if my tenant renews I get a 35% discount on my management fees.

What is my best course of action at this point?

I know I can deduct passive rental property losses form my active income (I make less than 100k)

Some other info:

-I have about $15k in reserves

-Next year I won't be working in the States, or for an American company, but I will be receiving a W-2, but can offset those taxes due to the following:

"The Foreign Earned Income Exclusion, which allows you to exclude $105,900 from your foreign earned income on your 2019 US taxes and $107,600 on your 2020 US taxes
The Foreign Tax Credit allows you to offset, dollar-for-dollar, the taxes you paid in your host country with your US taxes
A Foreign Housing Exclusion which allows an additional exclusion from income on US taxes for certain amounts paid for household expenses that occur as a consequence of living abroad"

-I'm a single guy with no family, so my lifestyle is pretty flexible.

If you need any more info, please just ask!

Thanks.

Bruno,

I think you've left out the most important piece of information: where's this condo?

If you're in a stable, low-appreciation, Midwest market -- keep it. I'm sure your principal paydown is more than $70/month, so your net worth is growing each month you own. The only risk is a big assessment hitting you before you sell.

If you're in a trendy part of an appreciation market, definitely keep it! You'll be in the black from principal paydown plus benefitting from your market's appreciation.

If you're in a tired part of a C-class neighborhood, maybe sell. But even then, if a sale costs $10K and holding costs $60/month out-of-pocket, you should probably still hold.

Also, this might be less expensive alternative to property management for you: www.hemlane.com

(I'm not connected with Hemlane, just a fan of their product.)

Best,

Jon

1 Vote

Originally posted by @Michael Buabeng:

@Marcus Auerbach

That would have been a best option but I think I messed it up. I recently just purchased my first home(single family house) a few months ago with a 2.5% rate. I am surrendered. I feel like I am making a lot of mistakes already. 🤦🏿‍♂️

Michael,

Don't fear! It's better to make all the mistakes at the beginning when you're playing with less money and learning. Losing $10K and learning a really valuable lesson now is much better than losing $100K and learning that same lesson a few years from now!

To your original question: I'd start with flipping. Sounds like you'll like it more, and it's a faster way to generate capital. Flip a home, then plow the profits into another flip, etc etc etc.

Eventually, though, you'll want to start holding onto some of your flips and renting them out to generate passive cashflow and a portfolio. The cashflow and equity wouldn't just produce income; they'll produce wealth.

As far as your lending questions go, find and talk to hard-money lenders in Fort Hood. Tell them how much money you have, what you're trying to do, and how you can work with them to secure financing on a flip.

Good luck!

Best,

Jon

0 Votes

Originally posted by @Ana Marie B.:

@Jon Schwartz - Didn’t read through the whole thread, but you had a question about any articles showing the relationship between prop 13 and prop 15. A simple google search should provide some insight. I was researching the list of propositions and think the below website may have described the relationship:

https://ballotpedia.org/California_Proposition_15,_Tax_on_Commercial_and_Industrial_Properties_for_Education_and_Local_Government_Funding_Initiative_(2020)

Ana Maria,

I wasn't asking about the relationship between Prop 13 and Prop 15; I'm well aware of it.

I was asking the original poster for any information backing up this claim of his:

"Also understand that those proposing these measures have clearly indicated that these initiatives represent merely a first step in their long-term plans to effect the single largest wealth grab in the state's history."

How is Prop 15 merely the first step in a long-term plan to effect the largest wealth grab in CA history? I'd love to see some evidence that supports that claim.

Thanks!

Jon

0 Votes

Originally posted by @Reyna Montoya:

Hello,

I am a newbie to REI. I am located in Oxnard, CA and am currently Debating whether to invest in the states (not necessarily Ventura court) or outside the states for our first house hack.

I understand that the first house hack might not be the easiest, but it will definitely help me for the second or third investment. Definitely considering moving if it’s more beneficial for our strategy to house hack.

Advice?

Reyna, what's the update? Are you staying in CA or moving out? Dying to know!

0 Votes

Originally posted by @Jeff Dong:

Hey BP Community,

My name is Jeff. I'm 22, just graduated from Ohio State this spring and moved to Los Angeles for a job. Sometime in-between graduating and moving, I became obsessed with learning more about RE/becoming a real estate investor. Nowadays, I've been reading BP books and listening to podcasts to establish a good foundation going forward!

I plan to focus on house hacking/out-of-state investing for now. My plan is to accumulate a portfolio of properties through BRRRR investing, preferably in the Midwest/East Coast (I'm originally from New Jersey).

For any current investors, if there's anything I can do to help out in your business, I'd love to work with you. I'm just starting out and have few commitments, so I'm happy to offer any time/effort needed.

I'd love to connect with anyone involved with RE - looking forward to meeting!

-Jeff

Jeff,

Welcome, and what a great attitude!

I suggest you search "Los Angeles real estate" on meetup.com and join some groups. That'll give the opportunity to meet some investors face-to-face (over Zoom) and further your networking. Unless you're secretly a trust-fund kid, your biggest asset right now is your time and energy.

See you around!

Best,

Jon

1 Vote

Originally posted by @Carina Glasser:

Hello! My name is Carina and I’m from Los Angeles, California. I currently work in the entertainment industry and have recently became interested in real estate investing. I’m at the beginning of my journey so I’m still focused on educating myself but I wanted to introduce myself to this great community in the meantime. I am hoping to get started by househacking (as I know achieving cash flow in LA is difficult) and gradually build a larger portfolio over time.

Welcome, Carina!

What do you do in the entertainment industry? I'm a film editor -- well, I was until March 2020 and hope to be again when production resumes!

Househacking is a great move in LA because rent is soooo high. You reduce your cost of living and get great principal paydown. Definitely a solid first move! I'm househacking a duplex now.

Best,

Jon

0 Votes

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All Forum Posts by: Jon Schwartz

Jon Schwartz has started 37 posts and replied 926 times.

Post: First Tenant..Operating at a loss.

Post: California Draconian Rent Control and Property Tax Inc Nov Ballot

Post: Trying to refinance a 4-plex

Post: What kind of financing should I get to build ADU on primary home?

Post: First Tenant..Operating at a loss.

Post: Would you rather do rental properties or Flipping houses?

Post: California Draconian Rent Control and Property Tax Inc Nov Ballot

Post: House hack in California or out-of state

Post: Newbie from Los Angeles - Looking to Help

Post: Newbie in Los Angeles