All Forum Posts by: Shiva Bhaskar

Anyone know of any good titles companies in Los Angeles that I could get into contact with?

Hi all,

Situation: Have an accepted offer for a fourplex in San Pedro. Walked the property and its a complete redo outside and inside (mold, water damage, sewer issue, etc). The numbers are tight. The construction project would not start until 12 months from now. 

Complication and main concern for backing out: One of the current tenants have lived there for 20 years (over 62 years old) and one is section 8.

Questions: 

• Can anyone share their experience with evicting tenants in LA county for major renovation (I assume that the current Covid regulations will be lifted 12 months from now)?
  
• Can anyone recommend a good lawyer that I can consult with?
• I read that Cash for Keys can be rejected in Los Angeles County, whats your experience with this?

Thank you in advance for the help!

@Shiva Bhaskar I think the person/team doing the deal has a massive impact. I tell people, you and I could by identical properies across the street from each other and have very different outcomes. I attribute that to the operator not the market or property. I personally really want to create/get EQUITY in my properties. So I wouldn’t touch the cash flow in Cleveland. But for some they totally make that work and it’s incredible for them. Great post! 

@Shiva Bhaskar

Take the same 20-50 year outlook and apply it to deals with a 15% ROI annually, on a total capital basis. In 7 years you have received all of your capital back, in TAX FREE CASH FLOW and have an infinite return for however long you hold the property.

That’s regardless of if the market goes up, down, or stays the same (and we all know what happens to the value of real estate over time).

If you factor in appreciation (which is icing on the cake) at a minimal rate of 5% a year, along with rent growth, you have a hard time finding a better investment.

By the way, that’s with no leverage. Add leverage to the deal, and you’ve turned a home run into a grand slam.

Now do that 20 times.

We’re talking about rental real estate. I don’t care about population decline. I care about supply and demand. As long as the balance between supply and demand is favorable and there are jobs in the market, you have the perfect storm for building equity, and most importantly, creating long term cash flow that you can live off of!

@Shiva Bhaskar, as you mention, there are people succeeding in all markets, big and small, low crime and high crime, etc.

Investing overall comes down to finding a hole in the market and filling it.  But there are bad markets to invest in, and those are the ones you don't understand, or your strategy is not aligned with actual demand.

The acquisition and operating team make all the difference in buy and hold real estate, in any market. There are great operators in all markets, they are just tough to find if you don’t know what you’re looking for. 

It also depends on what you’re investing for. I invest for cash flow so, Detroit is the perfect market for my investment strategy. 

If you’re looking to grow a large portfolio of cash flowing real estate, you have to be in a market with enough inventory to scale. 

You also don’t want to be in a market that’s too competitive. Competitive markets lack yield. As an investor, I love the fact that people are scared of what they don’t know when it comes to Detroit. It allows us to continue buying properties with excellent intrinsic value. 

A good acquisition and operating team will allow you to purchase income-producing real estate below replacement costs. That margin of safety, combined with great yield, make it hard to lose in a market like Detroit. 

Yes, there are bad markets to invest in, but you are correct in saying your can cure "some" of them based on the strategies you use.  

Also, don't the mistake thinking that higher sales prices and/or higher rents are what makes a good market.  All that does is make it an expensive market.  A good market is one where you make money either cash flowing, or flipping.

@Shiva Bhaskar what’s up buddy!

Hi @Shiva Bhaskar, me again.  I totally agree with this.  I grew up in Cleveland and my dad was BRRRRing before it was cool.  He never made very much money and had to have one of his properties foreclosed on in 2014 because the crime was so bad in the area.  

On the other side, I invest in Portland, Oregon, and have tons of success.  While my properties don't cash flow as much as other areas, the appreciation makes me substantially more money.  I think it is so important to study the market and do what makes sense for that market.  Do the math and the math will tell you what to do.