All Forum Posts by: Lee Ripma

@Erin S.

Well BP is great place to start! I found a deal, then I contacted local folks, then I flew out to meet them, then I closed on a deal (it was actually a different one, one I contacted them about ended up falling through) then signed contracts with them to do work on the properties and PM. It certainly takes an investment of time and energy to build relationships, but thanks to BP it's pretty easy to find folks to talk to in any local market you're interested in. I don't like TK for SFH but would do it for small to large MF apartments, I will only buy 5+ units in the future. Best of luck!

I would think about affordable markets that have folks you trust in them, friends and family. Research if those areas cash flow. I didn't have this, so I just looked into cash flowing markets and selected Kansas City. I built a local team, found a deal, purchased it, and now I'm working with the team to renovate it and rent it, then I will refinance and it and it will be a cash-flowing asset. It's work and there are surprises along the way. Working with banks for financing can be a real pain. Having done it with a duplex and a fourplex for the first time I now will only do 5 units and above in the future. Valuing commercial real estate is just much more straightforward and commercial lending is as well. I know it sounds "big" but I would looking into a small apartment building if you want to buy TK. I wouldn't buy a TK SFH. Good luck!

@Dottie Matheson I think historically that area has been a bit rough but things are changing quickly. I would not buy anywhere in LA that is subject to rent control UNLESS you get the units delivered vacant. That way even though you can't raise rents you can start with the rents high. The City of East LA does not have rent control (just east of Boyle Heights) however that is a bit far from UCLA. Is the student in question going to UCLA or USC? The area you're talking about is near USC BUT still fairly far from UCLA. Distances in LA are based on traffic, not actual distance, and that is going to be a brutal commute if they are going to UCLA. I prefer to rent in LA and invest elsewhere, the tenant rights in CA are so strong in LA, I would be afraid to buy! No cash flow and tenant relocations in the 40-75k range, no thanks! 

@Devan Johnson

Is there room in the yard for a pre-fab? There are lots of very cool ones these days and you would just have to lay a foundation and could get financing on it (but probably only 50%). 

If you're going for the carriage house over garage and can't cut the cost on it: You should be able to get a personal line of credit or another personal loan to cover the addition of the house, then refi into a new mortgage if it increases the value of the home (which it should). The rate might not be great but you'd be out of it quickly. If you don't want to do that because the loan on the current home is low then I think trying to get a higher HELOC is a good idea. Maybe have the house reappraised so you can up it? Maybe talk to a different bank that can offer a higher LTV HELOC?

Good luck! 

@Robert Jones

Best of luck as you educate yourself. I invest in KC so once you're ready you can add me to your buyers list for MF and small apartments. 

@Pralay Desai

I invest in KC and live in San Diego/LA. While I understand the TK phenomenon I think that buying MF over SFH is the way to go. Have you considered a TK multi family or small apartment building? I'm not selling anything and I'd be happy to speak with you about this if you're interested.

Best of luck!

Lee

Hi @Matt Friedman,

I also invest out of state in Kansas City. I split my time between LA and San Diego. The price of entry in KC is much lower and the cash-flow is good in theory. I just got my first 7 units and I'm doing rehabs on all of them. I think if you're going to look in LA commercial (5 units and over) is the way to go. Less competition and much less price per unit. You've got to watch out for tenants rights though. For that reason outside the City of LA is better. East LA doesn't have rent control. 

@Jared K.

Welcome! I live in Southern California but I invest in Kansas City. This site will be a great resource for you! 

Watch out for unpermitted additions! Can you use an FHA 3.5% down?

A move out on the 15 of the month could work out well, it will allow someone else to move in on the first of the next month.