All Forum Posts by: Paul Choi

I have a commercial property with tenants in the auto business - dealership, mechanics and auto body shop.  Not sure how things are in NY but here's my experience:

Residential is easy to get financing for acquisition. Auto related businesses, not so much. LTV's are in the 50-60% range. Make sure all permits and licenses are proper. All fire safety like fire extinguishers are current. Probably have to do a Phase 1 and possibly a Phase 2 Environmental reports. Can be costly. If first round of testing doesn't look good, they will bore into the ground to look for soil contamination. Make sure it's zoned for that business of course.

Is the auto body shop and residential on separate lots? probably not since it's on the same tax deed but can you do a lot split if they are separate buildings?  If so, you want to split them and sell off the residential and or commercial separately or keep and operate them...whatever works for you.  The body shop is a big pimple on the residential part of the deal.

Or partner up with a capital investor. Preferably someone with experience.

It depends on the goal and personal preference.

If it's a house to live in and want to pay down debt as soon as possible, then 15 year makes sense.

If it's an investment property and goal is to minimize ALL expenses as much as possible to get the best cash flow (just like running a business), then 30 year would be best.

what kind of properties? MF, SFH, commercial?

I'm a project architect and have done SFH flips, MF rehabs, commercial upgrades, etc and the cost to build to very expensive in California. Worked with a alot of good and bad contractors and as other have said, a great one is hard to find.

Sometimes places like apartments.com shows unit mix.

Rent control forces the private sector to directly subsidize public programs.  It's as if the government caps new iPhone prices at $50 so that everyone can have one.  Apple can't make money and will ditch the product.  

If government entities want to help the tenants, they should increase rent voucher programs like Section 8 to fall in line with rental demand and prices.  Also reduce soft costs associated with development (like permits and building regulation fees in California) to spur building.  Rent control, on the high end of spectrum, can reduce property values and thus reduce property taxes, essentially shooting themselves in the foot by reducing a revenue source.  Some folks in government need to take basic Econ 101 classes.

No, Investors are members of the LLC and stakeholders. Even if they get partial or all of their capital back, they are typically in the same stakeholder position but their ROI projections goes up. Depending on the deal, a good portion of the gains are in the sale.

 We have business checking accounts with Chase so we went with Chase Ink business credit card.  I think sign up bonus point was around 60k if you spend a certain amount within a few months.  

We have not used any points yet but we're pretty open - any business related expense like flights to other markets to view properties, etc, we can use points or just charge as a business expense.  Any of us can use as needed.

We open credit cards for our Mf properties (15+ units).  May not use it much but can accrue great signup points for business travel.  And build up more point if used for expenses such as rehab etc. But of course paid in full every month.

Hey Deepak,

Another Bay Area investor here but am in Stockton and Sacramento almost every weekend managing rehabs of assets in our current portfolio and sniffing out new deals, typically MF 15-60 unit range.

Downtown/Midtown is hot and price per unit is nuts..$250k+/unit for more stabilized properties. We like Arden Arcade (east of downtown) as there is a good amount of inventory and close to downtown. Directly north Sacramento downtown is kind rough but Natomas is nice since it is further north. Seems like there are more SFH so not sure about the MF market there.

What asset class are you looking for? residential? commercial MF?