All Forum Posts by: Rick Albert

I had similar issues to you once we closed.  It was a four month project turned into a year.  Part of the issue was the lender not issuing the checks fast enough and the other was the City.  Just like most real estate, time heals all wounds.  We are in the process of refinancing which should save us about $874/month.  Once we move out, the property will cash flow about $1,100 a month on our hard costs.  So in the end it is working out.  I would definitely do some things differently the next time around but glad we did it because I learned a lot and can share it with clients and others. 

@Jonathan Taylor I’m happy to discuss. I was able to get it done in about 30 days. We hustled to make it work. Where I had issues was during construction and getting the checks from the lender. It was a horrible experience. I would do it again but definitely with a different lender.

I've done the FHA 203(k) loan in Los Angeles. The contractor I used did it more as a favor so I will need to reach out to others so see who will be on board.

I'm happy to share my experience if you would like.

A few years back I sold a triplex where two out of three units were used for Airbnb (I'm in Los Angeles and this is before when you could do it).  Through due diligence with Airbnb, you can't actually sell the business because the account is tied to the host and their social security number for tax purposes.

At the time, we did use those numbers to show projected rents as an Airbnb property and ended up getting full price (which was actually $25K than when they listed it before with a discount broker).  So showing the numbers can help in adding value but only to those who care.  There is an assumption made that your buyer is going to be an Airbnb host and that's not for everyone.

I'm in, would love to meet more like minded people!

If your budget will allow, go with a 2 bedroom.  Much bigger pool of tenants.

Between 1 bedrooms and studios, my vote is a 1 bedroom. Tenants like their privacy. As someone who is house hacking by living in my studio ADU and renting out the main house, I would so much rather have a 1 bedroom. Keep in mind little things start to bother you like everything smelling when you cook, etc. Plus then no one has their privacy. If I'm thinking of these things, then so are tenants.

It depends on your goals.  As others have mentioned, I like investing in my own backyard (figuratively and literally by adding a second unit).  I live in Los Angeles.  I already know the area, so the learning curve shortens considerably.  Plus you can house hack it since you need a roof over your head anyways, so you might as well own it!

 Thanks for the shout out!  Yes, house hacking is a great way to get started in Los Angeles.  Because of the way the market is, you have to create your own deals rather than find them and it does take patience.

Happy to discuss more about my experience and the experiences of my clients.

Best,

Rick

 The law states no less than 30 days.  Keep in mind with skylights the seals can get worn and start to leak.  Privacy is extremely important and providing washer/dryer and a private yard will give you a better return.

Opening up the ceiling can make the place look cool and make it look bigger. When I looked into it for our ADU it was going to be thousands of dollars more because it requires more engineering.

Is there a way to make the property cash flowing?  For example once the tenant moves out switch it to a vacation rental or pass along services?  I charge a gardener fee to my tenants so it doesn't hurt my bottom line.

As a learning experience, I wonder if some of these fixes could have been caught through a home inspection when you initially purchased the property.