All Forum Posts by: Jon Schwartz

I am considering removing my property from the rental market, renovate completely and sell. Can I evict a tenant claiming Covid income loss? Do I need a lawyer to handle if tenant is not being responsive? LA County area

@Jon Schwartz This answers one of my questions. When you say "income from the property count toward your total income," is the "income" the full rent paid by renter or the cash flow from the property? For example, renter pays $1200/month. And your cashflow is, let's say, $300/month. Which counts toward your monthly income, that $1200 or $300?

I think this factor will greatly help me if and when we finally pull the trigger on REI.

As always, thanks a ton Jon!

Regards,

Marlon

Hi all, I live in an area where there are a lot of duplexes and am looking to purchase one to house hack. The issue I see is that all of the homes on the market have tenants in place. Does this mean that I can not do an owner-occupied loan and will need to get more creative to get a low down payment? Any suggestions? 

how to invest in real estate with low to no money down

I'm 24 now. Before I turn 35, our family's goal is to have $50k a year in cashflow from buy and hold real estate.

I'm not asking for you to make me a step by step plan. I'm more so curious of what your individual strategy would be.

Where would you invest? What would you invest in? How much money are you using to get there? What's your schedule look like?

Thanks so much in advance. I greatly appreciate so many of you sharing your knowledge and experience.

Hello Everyone!

I am looking to acquire my first investment property (preferably a buy and hold). I live in Los Angeles where real estate is REALLY EXPENSIVE! I am a 22 year old, full time student with no source of income. However, I was wondering if it’s possible to get a mortgage using the future estimated income from the property . Please let me know if and how this works. If not, how can I go about getting approved? Should I move out of Los Angeles and start out in a cheaper market? PLEASE HELP! Thanks for the advice in advance.

@Pablo Hernandez

I would strongly encourage you not to buy a 4plex in LA and instead purchase a SFH if you want to house hack. Here are the reasons:

1) prices of 4plexes anywhere you will want to live, you won't be under the FHA loan limit, and you will have a very hard time getting an FHA loan accepted. Since you can't get an FHA loan you're looking at conventional loans only and you're going to need to put a lot down (15-25%) and/or get a jumbo loan. The conforming loan limit in LA is 765k. Checkout how many MF props you can get in LA for 765+DP+closing costs where you want to live, hint, not many.

2) Tenant's rights. Look up and understand city of LA RSO. Any MF in your price range is going to fall under this so you need to understand it. You won't be able to get rid of tenants. Only buy a MF delivered vacant. If anyone else in LA is reading this do NOT buy MF unless it is vacant until you understand LA tenant's rights. If it is vacant then you're okay but see above on pricing. 

3) SFH are NOT subject to LA rent control, this is huge.

4) SFH you can get a conventional loan with 5% down and rent out the rooms. This is also huge. However, remember that the conforming loan limit is 765k. So price limit is 765 plus whatever downpayment you have minus your closing costs (assume 1%of PP). If you get above the conforming loan limit then you are into the jumbo loan space then you need 20% down.

I would strongly encourage you to both rent upon arrival and consider doing a house hack with SFH if that is what you want to do.

Weather is great, prices are high, people are A-holes. Welcome to LA. 

I'm getting out of the military soon and I'm looking to buy a house that I will live in and rent out while I go to college. I planned on using the VA loan so I could put 0% down. The problem I'm running into is my lender won't consider the rent I will be getting from the house or my Post 9/11 GI bill BAH(basic allowance for housing) as income I can claim. I have great credit and $90k in assets. Anyone have some creative financing suggestions?

I am new to real estate as an investor, though my wife and I are on our second home now (fortunately made a few bucks on our first purchase thanks to LA appreciation) and I have always been interested in investing in general. We are still at the strategizing phase and trying to figure out how to tackle our local market (I’m not opposed to out-of-state, but my wife doesn’t like the idea of it… but that’s besides the point!). One of our options includes turning our current house into a rental, which brings me to the point of this post…

Our house is on a large lot for the area we live in (1/3 acre). It’s one of the biggest in the neighborhood, and is the main reason we bought the house. It’s 5 bedrooms, and I’m envisioning a larger family that isn’t in a position to buy such a big property would be very happy renting for a while. We have a decent amount of grass, LOTS of trees, a gazebo, kids’ “clubhouse”, etc. (no pool!). I understand this doesn’t fit in the typical box for rental properties, so what things do I need to consider when I look ahead and plan for (potentially) making this a rental?

We currently have a gardener that comes weekly for $150/month that mows&blows + a little shrub trimming here and there. For those of you that have rentals that require some landscaping maintenance, are you paying that bill or asking the tenant to pay it in the lease? Do you go by maybe twice a year to take care of all the items the gardener isn’t taking care of, or do you look for a landscaping service that’s going to handle everything (from pulling weeds to adjusting sprinklers).

How about water bill? I haven’t done a full analysis yet, but I’d bet half of our water bill is from landscaping. How do you incentivize the tenant to water enough to maintain the health of the landscaping?

I plan to get some of our trees trimmed this winter, so I will get a good idea of how much of our rental income would need to be budgeted for that ongoing expense. Depending on what this costs me, I think it could single handedly change the viability of this property as a rental going forward!

And finally as a more general landlord-ing question, are property owners responsible for any injury a tenant (or their guests) sustain on the property? I realize this is an insurance issue, but would like to understand liability as well. If a kid trips and breaks his or her arm, am I going to be blamed for a half inch raised lip in the cement? What about a pine cone falling on someone’s head?

I know there’s a lot there. Just looking for some feedback to make sure we are considering everything. We’ve only lived here one year, so any move we make is probably a year out so we preserve the option of selling within the five year window without capital gains. Thanks!

Thanks @Jon Schwartz. Yes, we are forming the LLC so that we invest as a single entity to meet the minimum requirement. As you said, we are asking the syndicator if we can invest individually even though the amount is less than the minimum. In case, that option doesn't exist, we would have to setup the LLC right?

Allen, Anderson advisors was one of the lawyers I consulted with.