All Forum Posts by: Kimberly T.

I agree with the statements here that not accepting disability could be viewed as discriminating against the disabled.  Also, as someone else pointed out, some areas prohibit discrimination based on 'source of income' so you could definitely get in trouble for not accepting disability as a form of income.  I'm not a lawyer, though; not legal advice.

As for the particular professions mentioned, I haven't had any applicants of those types so far.

@Nathan Emmert you can't even find 1% properties in OC.  You could barely even find them a few years ago when things were bad.

@Daniel Siapin , while I admire your can-do attitude, I strongly encourage you to do some research on local rentals and returns before you jump in feet first.  Prices have come up significantly in the last couple years, and from the numbers I've seen, you'd be lucky to break even, even if you self-manage and do the repairs yourself.  We bought a triplex in Orange in 2010 (around the bottom of the market), and we make an ok return, nothing fantastic, just ok.  However, we self-manage and do most repairs and work ourselves.  That property is now worth about 50% more than we paid for it back then (we bought it for upper-$400k's, and it's worth mid-$700k's now), so if anyone bought it at the current value, they'd be losing money.

I agree with the suggestion of looking at the Inland Empire, I think you can probably get better returns there.  I grew up in Riverside, and my parents even owned a fourplex there before they sold everything and retired out of state, so there are definitely good areas to buy in (good areas = non-scary neighborhoods).  Since buying our Orange triplex, my husband and I have actually been buying only out of state (AZ and CO) because the returns were better (even with a PM) and those states are much more landlord-friendly than CA.  That's another option I would encourage you to consider.

 I also have this same rule. And, I also check their driver license to verify name spelling and birthday.

Hal, sorry you had to deal with this. I also got screwed out of a few months' rent when evicting a tenant (CA is not landlord friendly). Unfortunately, it is part of the live and learn process.

Judgments aren't an automatic deal breaker for us, we just assess how much it is for and how recent it is.  Our primary criteria is their credit score, not all the little nitpicky details on their report, although having some bad recent stuff on their will cause us to decline them even if their score meets our criteria.

Jeri, just curious how things turned out with this tenant.  Did they vacate?  Did you do some upgrades and ask for $1900 for rent?  Did you rent it yet?  I always love to hear how things turn out.

As for the topic in general, for us (me + husband), we assess it on a case by case basis.  When we advertise a unit, we typically advertise it a little under market so we can get some good applicants to choose from.  We think of it as our competitive advantage.

We have a triplex we've owned for 4.5 years, and the 3 bedroom unit has a tenant who lived there for over 10 years before we bought the place.  Her rent is significantly under market, but the interior would need major work if we got it back (all new flooring, new kitchen, paint, etc.), so we have only raised her rent a little.  We will be raising it again this month, but not by a lot.  She has mentioned that she has no desire to move, and we have no desire to get that unit back, so my husband and I have agreed to keep her under market.

We have some other tenants in several buildings we own who are also a little under market, but not too much, maybe 5% or so, but they've been there for years and pay on time and treat the place well.  We have started raising rent on them, though, because we don't mind getting the units back because they wouldn't need too much work, if any, to be able to re-rent them.

My husband drives a 2004 Silverado.  We bought it a few years ago with 92k miles on it, paid cash of course.  Great for hauling stuff.  We bought it after my 1994 Camaro (with 200,012 miles on it) got totaled (I wasn't hurt, thankfully).  At that point, I started driving his 1997 Blazer (with 193k miles on it)

I drive a 2007 Camry.  My grandmother bought it brand new, so when she passed away a couple years ago and our Blazer was on its last legs, I opted to take her old granny-mobile with just 27k miles on it and we junked the Blazer.  I figure the Camry will be convenient when we have kids (which we hope is soon).

Then there's my 1959 Ford Galaxie.  My great-grandparents bought it brand new, and my dad (who used to be a mechanic) and I fixed it up when I turned 16 and I drove it to high school, making me the 4th generation to drive the car.  When I got married and bought a house, my parents signed it over to me since I finally had a garage to put it in.  Here's my great-grandmother with it when it was brand new (originally black):

And here's me driving it when I was in high school:

Red's my favorite color. :)

I'm generally not a fan of anyone who would be so transient that they would want to just rent a place for a couple of months, so just on its face, I wouldn't allow subletting to someone who claimed they'd just want to stay there for the summer.  I honestly see no upside in allowing subletting, all the time you'd spend dealing with screening new short-term tenants, dealing with claims of who did what damage (how would you assess costs for damage when you eventually do get the unit back?), etc., is just not worth the extra few hundred bucks you might get.

We have owned rentals in AZ for a few years, and just bought one in CO last month.  We have PMs for both states, and we coordinate with them via phone and email regularly.  For the AZ properties, we have gone out there ourselves to do some work on it initially, to get them looking good (such as, we did xeriscaping), and now they pretty much just run on auto-pilot with routine stuff.  We have never done turn key, so I can't speak to that.

What would I tell my 18 year old, or any 18 year old who isn't my kid?  I ask that because there is a difference in what i would tell them.

First off, we don't have any kids (yet, but hopefully soon), so this doesn't apply to me (yet) either.  However, we plan to raise our kids not unlike how I was raised - help paint/clean/etc. when we have vacancies, help answer the phone when we get calls for units for rent, etc.  We will also teach them lots about money, leverage, etc.  That is how I learned some of the basics about being a buy and hold landlord and having a goal of financial independence.  My husband and i are buy and hold investors.

You can see that I didn't have quite the typical upbringing - I already knew some of the underlying fundamentals about landlording.  We also had my parents available to ask lots of questions when we wanted to start investing ourselves (before I knew about BP!).  You can therefore see that a child raised with that kind of mindset about money, hard work, sacrifice, goals, etc., might get a different answer than some random 18 year old who asked about getting into real estate.

Anyway, if it was my kid with that kind of background knowledge, and they asked us about wanting to invest in real estate, I would teach them more about why we like multifamily properties, debt, buying low, etc.  I would tell them that we wished we had bought a multifamily first (instead of a house) so that we could live in one unit and rent out the other(s) and be even farther ahead.  I would tell them that they are going to college, for a good/useful degree (no liberal arts, sorry), and that's not up for debate (mom says, LOL), because you need a job in order to be able to save up for a down payment and get a loan.  I'd recommend against a degree/career that would require extensive money and time (like becoming a doctor), because that would cost them dearly as far as being able to invest while young.  I'd show them how to analyze potential deals, teach them about screening tenants, explain what is and isn't worth doing when turning a unit, etc.

If it was any other kid without that kind of background knowledge, I'd have to ask them what they mean about wanting to invest in real estate, ask what they know about it, then I'd start with the basics of what we do and go from there.

What you've asked is quite a big question, and I'm sure I could go on for pages, but that's the basic idea.

We use craigslist and Postlets.  Postlets posts your ad to numerous websites for you (zillow, hotpads, etc.), and then when you take the ad down, you just do it once (from your Postlets account) and it removes all the ads on all the sites within 24 hours (usually within just a couple hours).  Postlets also gives you a way to post the pretty ad (it has colors and borders and whatnot) onto craigslist, if you want.  And it's free!