All Forum Posts by: Rick Trivedi

@Shopitha Kumar Not sure you should sell it to be honest. 3-4 years down the line, you would have more equity and you could rent the full duplex out and you have a good chance of cash flowing as well as appreciating property.

If you do wanted to sell it however, you could easily sell it with similar calculations to others. I am sure there will be lot more buyers with similar situation as yours at the time.

@Shopitha Kumar - See the example calculations below. Assuming you rent out the smaller unit, you have 4k/month out of pocket.

The good thing is, now that you are a landlord there are several tax benefits that you can leverage to lower your net tax (Happy to discuss offline). In Willow Glen or for that matter anywhere in the bay area, you will pay at least $3-3.5k in rent for 3 bedroom place, if you consider appreciation and tax savings opportunities, all in all it will be more than worth it for you.

We are brokers here local in San Jose, larger SF Bay Area. Happy to help with anything additional you may need.

@Brian Garrett I am currently looking to invest in FL. Would be great to connect.

@Mark Grozen-Smith for >4 unit, you are exposed to more problems. Most issues you have with 2/4 - multiply that by 4/2. It also depends a lot on the area and quality of the tenants. You are right about the parking lot but roof, multiple water heaters, HVAC, laundry area, Common area maintenance including the trash management - all become that much important. Very critical to secure a good property management company - absolutely critical unless you are local and can run at moments notice. I would again emphasize on the area - Class B and above to have less headaches.

Financing, in addition to 1.25 multiple, I would ensure there is no prepayment penalty or atleast you are aware of it.

@Alice Chen Though I am not a QI, we are real estate broker in SF Bay area, we have been part of the 1031 and you are correct on #1. 

For #2 - Having a knowledgeable agent for both transaction is helpful as there is a bit of co-ordination required between the two. But if you as an individual, are willing do it, dont necessarily need realtor who is familiar with 1031. You will just need to ensure that you let the escrow officer know about 1031 for both selling and buying transaction and ensure QI is involved in both. You can also leverage the proceeds from our 1031 to buy more than one property, so keep that in mind. There are few basic rules of 1031 exchange that if you look on the internet there are plenty of sources available.

Happy to help if you have any additional questions especially since we are local here in bay area.

@Brian Larson I have been researching ADU quite a bit recently. I have found a handful of companies, happy to provide the list PM me. Most of them seem super busy, so they barely respond. So the challenge is, its hard to find the companies which are trust worthy.

@Teresa Ong - David provided hippo insurance website. CSE insurance is cseinsurance.com. They both do investment properties.

Congrats @A Solanki on the plan approval. I would start with the architect who drew the plans to get some references of Contractors. Given you are here in Bay Area, there are ton of contractors if you search or I believe BP has a list in the marketplace as well - though I have never tried it.

Construction loan there are very few banks which are willing to take those. Try US Bank or California Bank or some of the local credit unions here in Bay Area.

Good luck. We are brokers here in bay area, so happy to help if you need any other information or help.

@Shopitha Kumar- It seems like either you are planning for the worst case scenario (which is good) or the the 4plex may already be in that situation where the tenant may not be paying which is why its for sale. Having gone through several evictions ourselves I can tell you that in CA even without covid, it's not easy to evict a tenant. If you add Covid, even with moratorium lifted, an experienced tenant can prolong this process quite a bit - up to 6 months or more. So I would advise you to be prepared. CA is tenant friendly state and you can feel/see it in the court if/when you have to appear for evictions or past due rent judgements.

Second part of your question whether its worth it - it depends on CoC (Cash on Cash) returns or CAP rate you are getting for the risk you are willing to take. If you search on the net you can find how to compute CoC / CAP rate for your specific deal and see if its worth the risk.

We are brokers in CA with experience in this field, happy to help if you need further help.

@Teresa Ong you cannot beat geico for auto and umbrella as well as general liability - they have some of the best rates and service which is rare.

On residential investments I would recommend hippo insurance and cseinsurance. They have some of the lowest rates and credit ratings. Please note I have never had any claims do not sure how good they are from claims perspective.   Unlike car insurance, If you don’t have a mortgage on the properties, having insurance is optional, so you might want to think about that.