All Forum Posts by: Rick Albert

There are a couple of ways to look at this:

1. How does losing a lawsuit bring the score down so low? There has to be other reasons.

2. Are they willing to sign up for a service that boost their credit score through monthly payments? Front Lobby is one company (I have not used them before). 

3. If they have debt, what is the overall debt to income ratio? Someone could be making $100,000/year but have $75,000/year in debt.

What are you intending to do after the 3 years? Move? Sell? Rent out the unit?

3 years is not a long enough horizon right now to see mass appreciation. The only caveat would be to buy a fixer condo and ideally 3+ bedrooms (so you become the house alternative but this is a want, not a need). 

Condos can be great investments but you have to really look at the HOA financials. Many are in tough spots right now between balcony inspections, older plumbing, and other systems that are nearing the end of its life. This means potential special assessments and increasing HOA dues in the near future. Those are things you have to budget for.

The only main advantage would be tax benefits and loan buy down each month. You might break even in three years but no guarantees. Generally speaking home values are going up in LA, how much is to be determined.

Also, and I don't know the answer, but does that 2 people plus 1 apply to only adults since typically children aren't counted? If so, then the kids growing up doesn't really change things and you may not be able to enforce it. It would be good to get clarity on it since they are likely going to ask you.

 Honestly, probably nothing. They will listen and probably not care because politicians know that the majority of Angelenos are tenants and their jobs are based on votes and what they say and do trickles down.

Contact LAHD and see what they say. I just don't think bringing up immigration status is going to go well and will likely create more gatekeepers.

Probably (double check with a lender) but why would you want to? The goal is to get out of the FHA loan and into conventional so you can recycle the FHA loan later on.

You have to follow rent control, regardless of status.

When I spoke to the fire department about the number of people in a space, they said that there are rules in place (such as the 2 people per bedroom plus 1) but they were told not to enforce it. You need to call the City. 

In either case, because they were minors when they moved in, the previous owner probably didn't want to get it with family discrimination. 

Don't try to find a loophole in this. It will cost you in time, money, and reputation. There are plenty of organizations out there ready to attack owners. 

In the higher appreciating markets, it does tend to take a second to cash flow. For example when I bought my second house hack here in LA, it would not have cash flowed immediately but a few years later it did. You also had the flexibility of refinances, etc. However keep in mind that you are dealing with bigger numbers, so a 3% appreciation on a $3,000/month rental is bigger dollar amount than other markets that may cash flow now. In other words if you look at a certain horizon (5 years, 10 years), that Seattle property might do better than other markets.

The wildcard with Seattle is rent control. That can hurt the appreciation if the tenant stays long term. You just need to factor it in.

I use DocuSign and it is fine.

As people already said, if the numbers work at 5% down, why wouldn't an investor putting 25% down just buy it. 

With house hacking you don't typically cash flow upfront, it is more about long term and you are still benefiting since it is better than renting.

You are saying you are losing $300-$400/month in cash flow, there are a few ways to look at this:

1. Is this factoring in repairs, vacancy etc.? If not, then you are likely losing more.

2. Did you factor in loan buy down and tax benefits? If not, then you might actually be cash flow positive, just not realized.

3. Another way to look at it is by splitting it into two. So really you are losing $150-$200/side. Are you in a market with decent appreciation potential? You may be cash flowing in a few years, in which case you are on the right track.

Real Estate is a long term play and can be very forgiving. When I bought my second house hack, we would have lost money if we were to rent it out completely. After some refinances and appreciation, we would cash flow almost $2,000/month excluding our HELOC and just on our PITI.

I really think this is an attorney question.

There are CBD retail stores all over LA. I would think it is neighborhood specific if you are concerned about the "crowd" that comes. 

To James's point about security, that could be part of the tenant improvements and on the tenant to handle.