All Forum Posts by: Rick Albert

There have been brokerages offering flat fees and failed. One example is Purple Bricks. They barely lasted in California (they are based on London).

The challenge is (1) you are assuming all listings have open houses and (2) there are a lot of moving parts that can happen behind the scenes. It will ultimately depend on price point and what level of service you want to provide. 

I don't know of any top producing agents who are with discount brokers. This is mostly because they can't provide the high level of service that Buyers deserve and for now Sellers are still generally paying. 

I think there will be a market for it and you will gain some market share, but I don't think there will be tons of profits coming in.

In my experience so far, Sellers are still paying. How much they pay is what is negotiable, whereas before that was predetermined in the listing agreement.

If you don't want to pay, let your agent know and that becomes part of the negotiations.

It is my understanding that the purchase price won't matter. It is whatever you qualify for. 

The best way to see if there is demand is to look on Zillow (there is a room feature) and Facebook Marketplace. You could also go onto Facebook Groups and see what kind of activity there is.

Chances are there is some demand. People can't afford LA or Santa Clarita so naturally they would keep going. Plus there is the prison that has employees.

There are pockets of Palmdale where there are homes with a good bedroom count. My clients bought one that was four bedrooms with a den (just needs a closet) and a loft area (which could easily be converted). 

The Mello Roos are something to look out for but I will say that the neighborhoods with Mello Roos are generally nicer than those without, so I wouldn't discount them just because of it.

It would help to get more information:

1. Are you house hacking?

2. What does the financing look like? Cash? Least amount down? Etc.

3. What are your short term (1 year) and long term (5+ years) goals?

4. Are you looking to make improvements or buy as-is?

Los Angeles has its difficulties but I do have clients that are killing it. I have an ADU on my property and we have been performing well.

It all depends on what you are buying. Remember that you have to follow the 1031 Exchange Rules.

Is that $500/month after putting money aside for vacancy, repairs, etc.?

I would suspect that rents will go up considerably in Los Angeles over the next five years. Right now it seems stagnant/slight decline. It will be short lived depending on what's being built in your neighborhood.

There are always reports out there that show high appreciation and high cash flow markets. In my experience (and I own in four different states), those reports are nice but already outdated. The information is about what happened in the past and once people read those, they start to flock to those markets, making it more competitive.

I would create a list of wants in a market and then narrow down. That's what my wife and I did when we bought our first out of state property. Some of the criteria was:

1. Landlord Friendly Market: Otherwise we would keep investing in Los Angeles

2. Population of at least 100,000: We want a big enough tenant pool.

3. Are there major industries there (hospitals, universities, etc.).

4. Are people moving there?: Check out howmoneywalks.com to get some idea. 

5. What does your gut tell you? This is super important. I didn't follow my gut in the past and it has bite me (always worked itself out). 

It is all dependent on the numbers.

If you are planning on putting low money down, the odds of it cash flowing (or even breaking even) in the first year would be difficult. 

It would only work if you add a lot of value.

I also wouldn't wait for rates to drop. The problem is everyone else is in the same mentality, therefore if rates drop more, then competition rises, and so do prices (think 2021 but not as intense). 

Versus buying now, and when rates drop, you refinance. That way you also would have a lower loan balance (because each month you have been paying down the loan) and there may be some appreciation. This COULD result in removing your private mortgage insurance.

There are pros and cons to everyone having ADUs. An argument can be made that it changes the dynamic of a residential neighborhood. If you drive through residential streets versus MFU neighborhoods, there is a distinct difference in most (not all) cases.

For ours, only the main house parks in the tandem driveway. ADU tenant and guest park on the street. I'm in So Cal so weather isn't an issue.

 If you have a JADU, then you as the owner need to live somewhere on the property. The laws may have changed so you will need to double check.