All Forum Posts by: Mark Frattini

Hey Timothy,

If short commute time is a priority Fallbrook is a bit of a stretch to Sabre Springs plus the traffic on the 15 is not getting any better in the next few years. You're going to want to spend that time with all the little ones running around not sitting in traffic. A commute time of ~20min or less is ideal. Checkout Greatschools.com to compare the schools. As you probably know PUSD contains some of the best public schools in San Diego.

It is nice to think we as investors can hold onto property forever but that is not always possible. You have great equity in both condos and it might be a good time to cash out and realize those gains. You could sell one or both and buy a nice SFH in Poway, PQ or Scripps Ranch and drastically reduce your commute time. If you decide to hold onto them for a bit longer you may be able to 1031 into something else. Check with your CPA. You could also hold onto both and pull some equity out to put towards your primary. Money is cheap now and will probably be for awhile. Lots of options to consider, just depends on what your overall goals are. Reach out anytime to discuss more in detail and let me know if there is anything I can do for you.

Roman,

How did everything go? Were you successfully able to extend the balcony?

Geo,

There are opportunities in every market and a lot of them never make it to the MLS. North County is no exception however there are a lot more opportunities south of the 56.Just depends on your goals...Reach out anytime to discuss details.

Ray,

Whether you choose a SFH, Townhome or a Condo you would still need a Property Manager. I wouldn't worry too much about not being able to find renters for a 1 vs 2 bedroom. Some investors like more bedrooms as they tend to attract families who may or may not plant roots and stay longer. My properties with two bedrooms always seem to have tenants that stay longer. So it works for me. One bedrooms and studios typically attract more of a transient tenant. Call up several property managers in the area and ask them what are the current rental trends in the area.

If you need the names of a few local Property Managers let me know I'd be glad to help. I work with property investors to try and help them with their investing goals. Let me know if there is anything I can do for you.

Originally posted by @Lee Ripma:

@Mark Frattini Sure, sounds like it could work. You don’t need an agent to close a deal, you can work with a title co. You can finance if the folks you’re buying from are fine with it. Since it’s a small number of homes you could skip trace and call/email. I’ve never done this, but it seems like it will work. However, you might need more than 20 on the list! The benefit to the seller is that they don’t have to pay fees and they can close when they want. Maybe you can find someone is ready to move on but not motivated enough to actually list.

Thank you. My list is small as these are just the properties that appear to not be well kept up. I am looking for different ways to get information on absentee owners, behind on property taxes and behind on mortgage payments, and owners without mortgages at all. I think this should help at least double the list as I know this can somewhat be a numbers game.

Do you recommend any sites that assist in tracking down information that might help in finding owners who would consider selling?

Hello everyone,

I wanted to see what you think about using the driving for dollars strategy for a primary residence.

I am a multifamily investor now in search of my own primary residence. I am looking for a single family home in small pocket with great schools a few miles north of downtown Los Angeles. If you are familiar with La Crescenta/La Canada/Montrose/Glendale you might know the specific area. Homes are not listed very often and when they are the asking price is more than I am currently willing to pay.

I have already driven the area and have a list of homes that have neglected yards and deferred maintenance on the outside of the home.

Can the driving for dollars principle be applied to a primary residence?

Will the strategy still work if I need to finance the property and not pay cash?

If I did find an owner that was interested why would they consider selling to me vs listing the home and getting a better price?

If this is possible what would be the best way to reach out to the owners (mailing, attempt to call them etc.)?

I have a list of ~20 houses total so far.

Driving for dollars, Craigslist, mail campaign, attend local real estate club meetings, call local PMs and see if they know anyone selling off their portfolio, call the Craigslist listings for apartments for rent and ask they current owner if they want to sell, bandit signs (not something I would personally do & check local laws), BP market place, MLS, auction sites, HUD home sites, tell every you meet what you do and what your looking for. Be patient.

I wanted to make sure I had all the information from my PM before making a decision. I spoke with them today and got the full story. The tenant said she was given the dog which turns out to be a Pit Bull because her friend is worried about her living there alone. The area is as I mentioned a C type neighborhood. I verified that her lease states animals are NOT allowed to live in the unit. I asked the PM to give her 5-7 days to find a new home for the dog. As nice and docile as some pit bulls can be I am not willing to take on the additional risk and liability. Also my current insurance company may not allow the breed. If she doesn't wish to give up the dog she will be given an option to vacate or we will start the eviction process. 

This would be my first early lease termination and I am choosing this over evicting the tenant at this point. I want to part ways and have them leave the unit in good condition. It sounds like she is willing to find another living option. Thank you to all who replied. This has given me lots of ideas should this happen again in the future. 

Originally posted by @Anthony Wick:

Do you allow pets otherwise? My new policy is $250 pet fee (non-refundable) and $50 per month pet rent. 

I do not typically allow pets unless I have trouble renting out a unit.

I made the original post on my phone and for some reason its formatted as one massive, hard to read through paragraph. Here is an attempt to make it easier to read. 

I’m under contract to purchase my first 6 unit commercial deal. I wanted to get the community’s opinion on my analysis. Purchase price: $315,000 

5.9% CAP

B class property 

25% down payment 

5.25% interest rate 

5/5 20 year amortization

Expenses 

Vacancy: 8% 

Property tax: 7,000/year 

Insurance: 2,000/year 

Property management: 12% 

Maintenance: 5% 

CapEX: 5% 

Utilities: 325/month 

Landscaping: 50/month 

Loan payment: 1,592/month 

Income 

Gross rent: 3,485/month 

Storage: 200/month

I will basically break even using the above projections. Not ideal. The property has a newer roof, no central furnace (baseboard heating), and wall ac units. Units are in good condition with the exception of one which needs a total refresh. CapEX should be low for this property. After taking ownership of the property I plan to slowly increase rents up to a total of 4,050 and bill the tenants back for water. This makes the property a 8.7% CAP. This will increase the cash flow to around 114/door. I will also increase the storage units rents to 250/month. Do my pro forma numbers appear accurate? I'm more familiar with analyzing residential 2-4 unit deals in C class neighborhoods. Thanks for any tips, tricks and suggestions.