All Forum Posts by: Rick Albert

Every market is different but there are things to consider (my first job out of college was bidding on properties at the courthouse steps):

1. Talk to a local title company and see if they have a public facing website where you can look up properties. 

2. I'm sure there are but bidding on properties is fairly easy and if it is like Los Angeles County, you need cashier checks to buy. I wouldn't trust a random person with blank cashier checks.

3. Keep in mind at the courthouse steps you cannot view the property ahead of time and it is your responsibility to get the occupants out. That holds a lot of risk in money, time and stress. It is why my investors stopped going. For one of them it took nine months to get the occupant out. For another we discovered the foundation was completely shot.

Go check out the auction in person and sit there and watch. That is likely the best education. 

Hello All,

I have been looking into these courses to broaden my horizons (I know residential) and was curious if anyone in the community has insight to the program and willing to share.

https://ecornell.cornell.edu/certificates/real-estate/real-e...

Thank you!

This is a very broad statement that no one can really give guidance to. Real Estate Investing ranges from flipping to long term rentals to note investing. 

What are your goals, short term and long term, and work from there. That's the best advice anyone can give you.

Your duty to disclose is a local issue. You need to contact the department of real estate and ask. If everything is going through the property management, let them be the ones to tell you. 

There are a couple of things to consider:

1. How private is the back unit? Do they see each other?

2. People rent out duplexes all the time. I would take a look at those comps.

3. Inventory is low and people ideally want SFRs. If you meet most of the criteria, some may not care.

4. Regarding utilities, You could do based on square footage. Although not 100% accurate, it will likely be the easiest way to split it. Alternatively, you could do a flat fee for one or both units. Maybe doing a flat fee for the smaller unit and then crediting the main house might make sense. We charge a flat water fee for the ADU and so far so good.

Personal residence? Can you remodel it using the FHA 203(k) loan?

Cost of construction is high and you may be paying extra to match 2024 building codes rather than a remodel/addition. Just something to consider.

This is a complicated question because it depends on a few factors:

1. It sounds like you want to STR or MTR so when you come you have a place to stay. Is this correct? If so, you need to be aware of the laws and what is and isn't allowed. For example there are strict guidelines in Los Angeles for STRs.

2. How much money can you bring in and/or are you pre-approved for? You can make any property work if you pay cash. 

3. What is your experience in investing in California? Are you planning on self managing or hiring it out?

4. How do you define "paying for itself?" Do you mean PITI plus vacancy, CAP Ex, etc.? Just something to think about.

I could come up with multiple strategies that could work.

I tend to think that RSO applies, even if all parties agree. I think you are limited on the rent increase. 

What Greg is suggesting is interesting, but has inherit risk, especially if the tenants change their minds, then you are really screwed. Make sure to document everything.

First of all, you are in Washington State. Check local laws to see what you can do. Being on a fixed SS income, she may have more rights than you realize.

Raising rents isn't going to do much good because it isn't like she can pay more (this is assumption, she could be a millionaire living below her means for all we know).

Raising rents or having her leave, you are going to look like the bad guy. Even if you offered her tons of money. You are going to have to be able to sleep at night. 

To Bruce's point about making her understand you are losing money, that's not her problem and she likely won't care. She can make the argument that you are putting her in a bad situation if you raise rent. I wouldn't go down this path. This will just make you look greedy. If you lay out the cost of ownership (maintenance for example), then that is a different presentation.

If allowed, it might be interesting to say that we are going to gradually increase your rent. For example:

Now: $1,000/month

3 months: $1,025/month

6 months: $1,050/month

1 year: $1,100/month

I've never done this before but it might be an interesting concept. Show her what current rents are so she understands she is still getting a deal. Vacancy can be very expensive. 

There are two parts to this:

1. Airbnb: Pass. LA has laws restricting it if it isn't a primary residence, no more than 120 days, etc. If you are talking mid-term that is a different conversation. Even then I would really run the numbers to see if it makes sense since there are additional costs (utilities, internet, etc.)

2. You can but even the best tenants may unintentionally trash the place. What might have been a week to fix everything my turn into 2+ weeks or worse. If you had a tenant lined up, you could end up in trouble. And there is a difference between viewing it before they move out versus after.

3. I know it may sound extreme (and maybe I'm paranoid), but what if you find a tenant today but come June/July they lost their job, took on debt, etc.? Are you going have them reapply?

Option: Start advertising it now and get an interest list. As you get closer, you can keep them informed as to what's going on. That way when July hits, you schedule everyone for one last tour and call it.