All Forum Posts by: Account Closed

Jonathan,

It never hurts to get your real estate license.  It will help you become more knowledgeable and give you some options.  Allied is a good company that allows you to take online courses.  First Tuesday is another option.

Remember that to use your license for any real estate activity, it must be hung under a broker licensed in California.  PM me if you need more specific help or advice.

Not sure what area you're in, but we're active throughout California.  Let me know if there is any other way I can help.

Pretty much.  Unless you are super excited about that potential.

Thanks for the vote!

The price per unit simply allows you to compare it to other nearby sold properties.  You can check what the comparable price is that way and it will help determine whether the asking price is reasonable.

You want to pay based on what the complex is making now, NOT on what it could be making.  Keep in mind that sometimes there are properties with rents much lower than market that could drastically affect the property value if they were increased.  First you would need to make sure you know what the rents should be.  Then you need to know if there is a limit to how much rents can be increased in your area.  Last you need to decide on how much you feel comfortable raising those rents.   It's easy to say you should raise everyone's rent a large amount, but that can be a tough thing to do to families and you would need to take into account how many tenants might leave with such a sudden increase.  It's best to be conservative when thinking of prospective numbers.

Bennett,

The per unit price is determined by dividing the number of units into the purchase price.  $1.2M divided by $60,000 is 20, so I am guessing this is a 20 unit complex.

You want to look at what the complex is making now.  Check your market to see if what they are suggesting it will make is legit.  A lot of agents will be pretty aggressive in their proforma (projection of what they say a property could make), and the numbers may not be realistic.

Lauren

Where are you located, Darren? Depending on how much work you are able to do and where you are looking to invest, an FHA loan requiring only 3% down could work for you.

Good for you, Tony!  I am in California, but I would love to be a resource for you if you have any questions I can answer.  Meanwhile, network with some good local agents.  They should be able to connect you with excellent, trustworthy contractors that might be willing to invest in a flip with you.  Or they might know of local investors who are willing to work with you.

Consider investing in a syndication - buying a property with a group of investors.

Hi Dusty,

I think that's a great idea and a good way to start building wealth.  That being said, there are a couple of downsides you should consider, but they are not insurmountable.

You will have a tenant right next door.  That means late at night when their toilet clogs or they notice bugs, they can find you.  You should be prepared to establish clear boundaries and maintain them with any tenants.  If that makes you or your wife uncomfortable, you could consider a property manager who would be the contact for the tenant and require all property communication to go through them.

You need to be well-informed regarding laws in your area.  You can do the research, join a local apartment association or hire a PM.

If that sounds doable to you, you can certainly search online for a property, but if you find a good agent, they should be able to steer you to a property that will serve you well as well as point you in the right direction for any management advice you might need.

Best of luck!

Charlie,

First of all, great job in keeping the expenses low and starting out early in educating yourself regarding investing.  Real estate investing is a wise choice and if done right, will benefit you greatly.

I would suggest researching property management companies in your area before you even start to look for a property.  With the right company, you will be able to get some good, free advice to help you make a good selection. 

Next, find an excellent agent who deals regularly in investment properties.  Choose your location wisely.  You want as many units as you can afford in an area that will appreciate - not a luxury apartment or a ghetto.

Have your PM handle the property, but make them aware of your goals.  Your goal is probably not to own this property forever, so keep that in mind when making any larger repairs.  Your goal is also to get as much appreciation as possible.  Keep that in mind as well when planning any repairs and/or renovations.

Meanwhile, keep saving and watch the market for a good time to exchange into a bigger and better property.  A lot of people really love larger multi-family, but consider multi-tenant commercial properties as well.  My personal favorite is multi-tenant industrial.  The landlord is only responsible for maintaining the exterior or these units and they are relatively easy to rent.  They are not the prettiest properties, but with a good PM, they can be excellent for both cash flow and appreciation.

Best of luck!

Lauren Prichard