All Forum Posts by: Shiva Bhaskar

I'm here in Los Angeles. For quality, owner occupant single family residences (the sort of thing most investors wouldn't be very interested in because there's no cash flow) in decent areas, demand remains very high. Lending being tight may put some brakes on the market, but I do see things still moving locally. 

I think there are plenty of people out there who get trapped in a bad cycle with consumer debt, and could really benefit from DR's advice. Most of these folks, unless they have a major change in mindset, aren't likely to have much appetite for or interest in real estate investing. They could really use DR's tips around not overleveraging. 

However, I think for most investors, some level of debt is neccessary, unless you're a very high earner in a pretty cheap area. Managing that debt in a smart way is key. 

I know a lot of folks who don't like to go above 70% of purchase price in leverage (some stay closer to 65%), on investment properties. These people will probably be able to weather a storm better than many, especially if they buy value add properties. However, other people go much higher leverage and get burned - which isn't smart. As with most things in life, being educated as to risks, and doing things in moderation, is usually a good idea. 

Originally posted by @Gregory Schwartz:

Did I pick the best time or the worst time to jump in full time as a real estate investor? 

December 2019 - I very confidently left my full-time job as an active USMC officer making over 100k a year.

January 2020 - With ambitions of combining the 2 strategies of Househacking and BRRR I spend ALL of my investment money to buy and rehab a 280k 4-plex. I simultaneously began my career as a real estate agent with Keller Williams.

February 2020 - With an empty investment account, 1 unit rented and 2 nearing completion I first hear of Coronavirus concerns.

March 2020 - Corona is in full swing, lockdowns happening nationwide, wife's employer (a gym) is shut down and no one's buying houses. But with a decent savings account buffer, I remain nervously excited for the future.

I did not see this coming. Fully expected have at least a few houses under contract and my wife expected to be working full time. The blessing is that we live well below our means and thanks to the house hack we have very low housing-related expenses. Despite all of this I started a campaign to buy off-market distressed duplexes and 4-plexes as I continue to attempt to grow my portfolio and goal of financial independence through long term buy and hold multifamily. 

Any other optimist out there convinced that this tragic event can provide huge opportunities?

Greg, first off, thank you for your service! I think your skills from the USMC (grit, discipline) are going to serve you well here. My dad worked in the defense industry with a lot of USAF guys and many of them were involved with real estate after retiring (and here in LA, where things are pretty pricey and competitive). 

I think getting the 4plex completed (well, the units you're not living in), would seem to be the top priority. I assume you have a mortgage on this one, so nothing I"m saying isn't obvious to you. A lot of construction guys seem to have taken a bit of a pause with what's going on, but hopefully can get that figured out.

Anything any of us says as far as where the market is going is speculation right now. This isn't 2008, or right after 9/11, or any other time in the last 5 or 6 decades. A virus of all things - never would have guessed. Anyhow, Texas is a great market and there will be opportunities despite pain in the near future. Just get through these tough times. 

You and your wife keep getting after it- being able to live a little more frugally is a huge advantage. You'll have to for a little while I suppose. I was a realtor once, and really getting the swing of it takes time, but if you're committed to it (I bet you are), you'll be able to build a nice source of income, and can put that $$ back into properties.

Go get em! 

Originally posted by @Christopher Brown:

Just to put some meat on the hypotheticals of this thread: I am in my 180-day period for a 1031 exchange with $2mm in escrow and two properties under contract: a stabilizing self storage deal in a growing but small market and a NNN deal with three QSR tenants in Tampa. I had intended to close on the NNN deal and to syndicate the storage deal, but that was two weeks ago...

I have NO idea how to move forward with either property and my 180 days is up first week of May. Financing for NNN QSR is basically frozen - my really attractive CMBS debt got pulled, though the local bank says they think they'd still fund it - and the possibility of rent abatements or the spaces going dark in the next six months certainly seems like it could be a possibility. And while I have the reserves to float a longer lease up for the storage deal, the prospects for continued growth in population/rents in that market suddenly seem much less attractive.

Because my 1031 cost basis is so low, I'll pay basically 45% in cap gains if I don't close on either deal. But paying the taxes and having $1mm cash on the sideline all of a sudden seems almost attractive!  

Hi Chris, sorry to hear about all of the difficulties. You may have already considered  this, but to follow up on what @Dave Foster said, I wonder if private money might make sense for a while, even if the rates are not great. Not a lender myself, but I know people who used it during the last crash to push good deals through, and were happy in the long run. Self storage, from what I know, has often done even better when economy has issues and people are transitioning, so perhaps trying to hold on to at least that deal would probably be  solid. Of course, having cash and waiting for opportunities is never bad! 

Originally posted by @Charles Cooper:

When is the next South Bay meetup? I'm interested. 

Hi Charles, sorry for the delay - this Saturday, March 7! Please see here for more details. We would love to have you join. 

https://www.biggerpockets.com/forums/521/topics/810281-multifamily-real-estate-financing-and-advice-on-mortgages

Originally posted by @Chad Doheny:

Add in San Pedro and I'm in. San Pedro is hands down the most exciting neighborhood for investment right now in my opinion. 

Agreed Chad, San Pedro is an amazing market right now! We're calling this the Local Multifamily Experts meetup, and we consider "local" to be anywhere in LA. Next meetup is in Redondo Beach this Saturday: 

https://www.biggerpockets.com/forums/521/topics/810281-multifamily-real-estate-financing-and-advice-on-mortgages

 

The Local Multifamily Experts meetup is a new meetup, for folks who live in the greater Los Angeles area - and want to invest in multifamily properties here! This meetup is for both experienced local investors, and those who are curious to learn more about the market. No pitching whatsoever - strictly learning, networking and growing together.

For this month's meetup, we'll be hosting Mr. Charles Jones, an expert in commercial/multifamily financing. Charles currently serves as VP of Loan Originations at Hunt Real Estate Capital, a New York City - based loan originator, which currently services over $16 billion in commercial real estate loans. Earlier in his career, Mr. Jones was a part of Fannie Mae, JP Morgan Chase, and BMO Harris. He brings a wealth of experience, having originated countless multifamily transactions with various products and loan scenarios. We're looking forward to learning from Charles. 

Schedule:

9:30 AM to 1015 AM: Breakfast and networking.

10:15 AM to 11:15 AM: Presentation - Charles Jones.

11:15 to 11:30 onwards: Networking, wrap up.  

Location: The Great Room Cafe - free parking!


You'll easily be able to buy the property above after attending this meetup - OK, we can't promise that! But, you'll be sure to learn and meet like minded folks. 

Originally posted by @Tammy Skeath:

I’m interested! 

Hi Tammy, check out our meetup in Redondo Beach if you're around on Saturday. We will be doing this the first Saturday of each month, so please feel free to join whenever available! 

Originally posted by @Sammy Lyon:

Can’t wait to meet up with you guys!

Looking forward to it! 

 After much delays, we've put this together, for folks interested in investing in multifamily real estate right here in LA: https://www.biggerpockets.com/forums/521-events-and-happenings/topics/799283-build-wealth-now-pay-taxes-later-with-a-1031-exchange . We meet the first Saturday of each month at the Great Room Cafe in Redondo Beach. No pitches, just networking and interesting presentations from people with expertise in some part of the multifamily world. I know it's a bit last minute for the even this coming Saturday, but we would love to have each of you join if you're available.