All Forum Posts by: Michael Kistner

@Jon Jones,

  I would look at the commercial building as if you were buying it from a pure investment side. Would you have interest in it if your coffee shop wasn't there? What other opportunities does it have? What are the businesses currently there? Is there a way to add value? Is it in a nice area?

   If you can answer all those and would still be interested in it then that might be the route to go at first. If you're trying to talk yourself into it for the coffee shop then I'd probably go the residential route and then look for an area where you'd like to buy for your coffee shop.

Thanks,

Mike

@Aaron Misiph,

  It's more common to have the contractors to buy the material but you can if you prefer to. I have a Lowes Credit Card and will do the work myself in California but obviously can't in Texas. But I just had a bathroom remodel done in Texas and still purchased all the material and had it ready for the contractors to pick up.

   Now Lowes isn't always the cheapest and best quality material but you do save at least 5% every time you use their card. That should add up over time.

  When working with the contractor and getting bids make sure you get an itemized bid. Then you can see what they're charging you for material and can always do some shopping around yourself.

  If you decide to have the contractor buy the material and do the work ask that he gives you a copy of the receipts for the material with the invoice. I've never had any push back with the request and if I'm ever audited I will have more detailed receipts.

Hope this helps!

Thanks,

Mike

Hey Joe,

  I work full time as a maintenance supervisor at a refinery in the Bay Area. Due to the high costs I commute a little over an hour each way to work. It gives me plenty of time to listen to podcasts. And luckily I work Monday-Thursday and do have time to answer phone calls or respond to emails.

   And every day I try to read for at least 30 minutes,

   Check bigger pockets forums for 20-30 minutes,

   Analyze stocks and look at the overall health of the stock market for 30 minutes,

   And analyze deals for at least an hour.

I'm also working on getting my real estate license during my free time to eventually do that full time.

 Thanks,

 Mike

Hey @Aaron Misiph,

  If you're not able to do the work yourself I would start asking around for contractors that friends or family recommend. Also check out angieslist and thumbtack for local contractors and go through the reviews.

   Don't be afraid to call a few and ask them what kind of work they do. Most of them specialize in something. Ask them their hourly rate because that will be your biggest expense.

   Hope this helps!

Thanks,

Mike

Edmondo,

 I’ve seen some Multi-families pop up in Lodi that meet the 1% rule. They move quick and some have been in need of repairs but if you keep looking I’m sure you can find some. 

Thanks,

Mike

Blake,

 In California and Texas you must honor the lease as well. I’d double check that just to be safe. I’ve also bought multiple properties with tenants that didn’t have move in sheets and just asked to do one once I took over. No one had an issue with it. 

 We also have to give tenants 30 days notice if we’re raising rent less than $100 and 60 days notice if we raise it more than $100. 

 Hope this helps and congrats!

Mike

Hey Nikolai,

 I always recommend to people looking to start in real estate to buy a small multi-family (2-4) units first. Especially if you’re planning on moving into one. You can get away with putting 3.5% down and still possibly cash flow. 

If you're looking for your first single family (SFR) buy and hold property I like to use the 1% rule. If the property will rent for 1% of the purchase price or more you're usually going to cash flow. There are exceptions so run your numbers.

  Hope this helps and good luck!

Mike

Lau,

  I found myself in a similar situation in California, it’s just too expensive when you’re starting out. I’m looking at markets that have well known colleges and hospitals in the same town. 

  As for the property you currently own, I’d recommend keeping it and look into getting a heloc off of it. You’ll be happy you have the property when it’s paid off. 

 Thanks,

Mike

Chris,

 That’s great! Learning the property management side can seem intimidating for most and I believe an invaluable skill to have. 

  Did you have to put 20% down on the second duplex or was there some creative financing involved?

  And completely agree that house hacking is another great way to get started if you don’t mind roommates. 

 Thank you! 

Sorry to hear about your loss. Living close to Sacramento I think you can find some decent deals in that area, but if you're able to branch out a bit, here in Lodi you can find more opportunities. I have a great real estate agent who'd I can put you in contact with. Shoot me a message and I can get it to you.