All Forum Posts by: Patrick Senas

Hi Mark Allen I wish I can use a conventional loan to avoid PMI or VA funding fee. Unfortunately in the SD market, it'll be difficult for me to obtain 20%. For most of these properties priced above $500k that's at least $100k. I don't have that kind of money laying around. If I want to get in the market today I don't have much of a choice but to use a VA loan. The tris to quads are mostly D type and in really bad neighborhoods. Coincidently near the military base. Personally I don't want to invest in a place that I wouldn't want to live in. If I invested out of state then yes I can enter other markets easily. It's something I'm looking into but finding a market that isn't over saturated is a struggle in its own. I'm not as well versed in RE so I can only use the information provided on forums and word of mouth. I'm doing some more research though, and hopefully I'll come up with a sustainable strategy and process on finding the "one". Im actually waiting until Monday to hear back if I can get my first property under contract. To be honest I'm as nervous as it gets, especially with the numbers investing in SD with a VA loan; but many others have said it's im over reacting. Well its my first deal, it's no home run but hopefully it works out in the end. How did you get into being a broker for a firm? You obviously like it, do you prefer it over investing on your own?

Hello Jon Lee Thanks for sharing and providing some insight on how you conduct business. Since you mainly focus on flips, how did you initially learn how to properly assess rehab costs? If you have read J. Scott's book on estimating rehabs, do you recommend it as a must read? I also want to do rehabs since I think it's the most efficient way to force appreciation. I was also thinking of finding someone more versed in the process to do a JV but I need to figure out what I can do to be an asset for them. You mentioned private money and hard money lenders. I'm also using some private money but from personal relationships. When you come in on a purchase with all private money is that what they consider all cash buyers?

Hi Kevin Fox I would need one for a duplex, what are Bravos rates? Thanks for the recommendations.

Hello All, I'm looking for any recommendation on some reputable home inspectors in the greater San Diego area. If you have any trusted people in mind or are an inspector yourself I would like to get in touch. Hopefully I'll be needing their service here within the following week. -Pat

Jonathan Jaime Velarde I'll be going to UCSD for Aerospace Eng. UCLA is a really tough school to get into. Mostly because of # of applicants but I hope you get in!

Hi Jonathan Jaime Velarde , I will start using my GI Bill this fall actually. So yes I would be collecting $23,000 annually for housing allowance as well as scholarship refunds when the VA payment gets to the school. So technically I wouldn't be affected if I take all of that into account. I was just assessing the property as it stands by itself. No point in having a bad asset just because I can keep it afloat using other means. I also won't be putting any money down so there's that. I can rationalize that instead of putting 100k down I'd be slowly putting money in annually while building equity. The MF market is hot here. It gets scooped up pretty quick so good luck!

Hi Samuel Lynch , welcome. Yea this markets a tough area to wrap your head around lol. Good luck!

Ben Biggs My numbers: CapEx 10%, Repairs 3%, Vacancy 3%, Appreciation 3%, PM 6%, Income Increase 3% and OPEX increase 2%. I am financing through a local broker that was recommended from BP actually. I'm preapproved and the interest is max 3.875. The rent does cover the mortgage but not with the taxes and insurance. The property itself is right next to SDSU. Great looking property. So I'm trying to wrap my head around rental increases in that area. One of the units can be rented for $1700. That alone is a tough sell in a college area I think if most of the renters are probably students. Now with a 3% increase, in 3 years rent would be $1850. I don't see how that's sustainable. I don't know anyone that would be willing to live in a 1/1 for $1850 let alone a college student. Or am I overthinking things.

Hey Ben Biggs , always a pleasure. So I actually have a 1/1 duplex that I'm working on getting under contract now. Dealing with some counter offers currently. My issue is with the numbers when using a VA loan. Using 100% financing the property Im looking at, or any property I've analyzed, do not even come close to breaking even after PITI. And that's calculating the property as a full rental. As I see it, sure I'm getting principal pay down and building equity but I will be losing ~10k a year on an investment. That numbers probably less but I'm taking about saving up cash reserves and all that. That seems like a bad investment choice to me. I would at least need the income to cover PITI. Is that possible using a VA loan? My realtor says it's probably not going to happen and to close on a deal and bet on appreciation and rent increases. What's your take?

Hello BP and fellow vets,

So I have been trying to get a grasp of the SoCal real estate market and the best ways to invest. I was hoping I can ask my betters on this forum on how they have found success in RE. I want to focus mostly on investing. I already rent for dirt cheap and plan to stay (as long as my gf would let me live with her lol). So any property that I do buy, probably with VA or FHA, will be turned into a full rental after the owner occupied period has elapsed.

Local or OOS?

SoCal is a very expensive market with a lot of competition. I was hoping to invest locally so that I can use my VA loan and be able to manage it myself when I rent it out. Do you guys invest locally or OOS? If you invest OOS do you use turn key properties or create a team in those markets.

Whats your strategy?

If you do invest locally, what strategies have you found to be successful here? I was thinking of employing the BRRR method. I'm about to buy J. Scotts book on flips and estimating rehab costs to learn more about the process. Do you guys look for properties only where you can force appreciation? Or do you find rent ready properties?

Maybe you focus solely on flips or on wholesaling.

Financing the deal

They teach on BP to only consider properties that cash flow after expenses with 100% financing. I don't think that is possible, at least from the deals I've analyzed on the MLS. I directed this post mostly to vets because we have the option of using a 0 down loan (VA) without using creative financing. Do you utilize VA loans for investment properties or only on your "dream" home.

Investment Vehicles

I know this may be a preference but which niche is your favorite to invest in? Condos/Townhomes, MFR or SFR? I want to stick to MFR but those listed on the MLS are overpriced IMO.

Criteria

What do you look for in a property? What is a reasonable CAP rate, GRM, COC and IRR when analyzing a deal. Does your criteria change when you are using 20% down vs. 0% down?

Any inputs would be greatly appreciated. I have a basic idea on what I think I should do but would like some validation. Hopefully hearing your strategies will help solidify my own plans.

Thanks!

Pat