All Forum Posts by: Ryan Rodriguez

@Joseph M. Thanks, Joseph!

I have had my licensed since I was 19-years old and this was the first deal I put it to good use! I did represent myself and received the commission. Fortunately, I had a mentor (my mother) who guided me throughout the entire process. There are many benefits to have a real estate license in my opinion. 

@Alison S Thanks! The rents were at $700 when I bought the property. In my opinion, the seller had stopped taking care of the property and let the tenants live in bad conditions. I was not legally subject to any percentage limitations. All leases were on month-to-month.  

@Anthony Gayden Thanks!

I was fortunate to have a savings fund my parent set aside for me I was able to pull out from after college. Having a full-time job, living at home, saving, and representing myself to get the commission were contributing factors on why I personally was able to finance the deal. 

I would like to mention that this is not the only way to invest in LA. It is also possible to have done my same deal using a FHA loan(FHA allows you to invest up to 4 units). I decided not to go through this route since I had the cash available for a bigger downpayment and wanted to treat it as an investment rather than my personal property(would have to live there).

Please see below the same Analysis as if it was done with an FHA loan:

Note, I lowered the interest rate because FHA loans are usually lower than conventional. I also subtracted one of the units rent since I will have to live in one of them. Lastly, I made an assumption of $300 in PMI to be added in my monthly expenses. By doing an FHA loan, I have reduced my total investment by almost $100k compared to my actual deal and I am almost breaking even! Furthermore, after a year, you would be able to move out and rent out the other unit to get a better cash flow and an even better cash-on-cash return. It's possible to find good investments without coming up with a ridiculously amount of cash in LA.

@Ian Dunross Thanks Ian!

A good credit score helps a long way! I believe rates are still low and I locked my rate in the beginning of the 2017 year. Also, it's important to not that this is technically not considered a commercial property (less than 5 units).

@Brian Ploszay Super pricey! Thanks for the feedback Brian

Would like to hit that "freedom number" when I am 35. Planning to make real estate my full-time job down to road to reach my goals.  

Thanks @JP K.!

I calculated the cap rate by adding all the monthly income and subtracting it by all the monthly expenses (not including mortgage payment). Then would times that by twelve to get annual NOI. Then divide your NOI from the purchase price

My Formula: 

((5,100-1,008)*12)/595,000=.0825

@Vinny Randazzo

It can be tough to find a deal in LA, but they are out there! We just have to look that much harder. 

Would need your email to send the excel file. Will definitely let know if I find a deal that would be great with a partnership 

@Kuba F. Appreciate the feedback Kuba!

@Francine Biton Property was not rent controlled. It's important to note that this deal would not have happened the way it did if it was. Fortunately, EastLA falls right outside rent controlled areas. Good site to double check for rent controlled areas is ZIMAS.

Obviously, the tenants were not happy about the increase in rent. To my surprise, all the tenants gathered together and asked me to not increase the rent. However, I stayed to my word and told them I would increase it, and if they don't want to pay the increase the rent, I am also giving them the option to leave. Legally, I had to give them a 60-day notice (being they were long-term tenants). One by one, they started to leave except for one. The one tenant that stayed saw all of the improvements I was making to the property, which justified the increase. 

@Ray Lai

You are right. It's not possible to make have 100% occupancy at all times. However, my analysis was based on the assumption that all my current tenants will for at least a year (which they have communicated to me) . Can add some vacancy costs for a more conservative assumption. Also, I should of put that $200 in CapEx instead of repairs. I have renovated all units making them tenant proof and fortunately have had zero repair costs (knock on wood!). Appreciate the feedback and will add some more costs to be prepared for any hiccups :)

I did buy the property through the MLS. I would like to buy as many deals as possible, but finding a roadblock with coming up with the financing. Considering to do a HELOC/Cash-out-refi down the road. Current comps are supporting a $700,000 property value, which would allow me to pull some cash out. Would re-invest that money for another down-payment. Also, thinking about doing direct mail to find owner-financing. I am finding it difficult to find a deal like this one with the market being really hot right now. My goal is to at least get another buy and hold deal next year.