All Forum Posts by: Shiva Bhaskar

Quote from @Uri E.:

Hello,

I buy, hold and rent out single family residences. Each new acquisition I then depreciate using a standard straight depreciation - total cost of land improvements. I recently learned that I could expedite some of the depreciations through cost segregation which can be then depreciate over 5,7, or 15 years, depending on the item.

Asking for your advice and guidance on the following:

1. Is there a downside to doing cost segregation, to expediate depreciation?

2. Hiring someone to do the cost segregation analysis and report can cost $10K-$15K. When is such expense of hiring a team to do the segregation analysis, actually worth it?

3. Can I do these cost segregation estimates myself?

4. If I do these estimates myself, will that be in violation of IRS rules?

5. And finally, can I do cost segregation to expedite depreciation for properties I already owned for a few years?

Thank you!

Uri, we were able to get great cost segregation studies done for much less than the price you mentioned. It was very cost effective for us and our investors. Please feel free to DM me and happy to share the name of the team we worked with. 

Hi Eric. Our group owns and operates multifamily properties in LA as well, and I am a lawyer. I'm very sorry to hear this - it's something that many property owners are dealing with right now. Eviction moratorium is being extended again, but I do know a lawyer who may be able to assist, as well as another professional. Please DM me and I'll be happy to share more information. 

Buying a multifamily property is a major investment. This means you really need to do your homework. What should you look for before closing the purchase of an apartment building? What red flags must be avoided, to ensure the success of your investment?

The executive team of LME Investments has acquired or conducted due diligence on dozens of multifamily properties in Los Angeles County. We'll be sharing our unique approach to vetting properties before and during escrow.

Whether you're a new investor or a seasoned veteran, this discussion will be a great opportunity to ask questions and learn. You'll also have a chance to connect with fellow real estate investors and professionals.

Please support our venue by ordering breakfast or a beverage. When you arrive at the Great Room Cafe, please head to the back and we'll be there! We look forward to seeing you!

Agenda:

9:30 to 9:45: Arrive and order breakfast
945 to 10:00 Introductions
10:00 to 11:00 Group Discussion & Presentation
11:00 to 11:30: Networking

Hi Jake. I am part of a group that purchases and upgrades multifamily properties in LA. We do have Section 8 tenants in some units in our properties. Happy to chat about this privately ( I know it's a politically sensitive topic so would rather discuss individually). Anyone else thinking about Section 8 in LA County is welcome to DM me as well! 

Hi Jamie. I'm a local investor. Partners Federal Credit Union has been pretty good for multifamily loans, as has Luther Burbank. These are definitely for properties that are 5+ units. They aren't tiny, but on the smaller side for banks. 

If you're looking for residential, again I'd try credit unions, as well as places like Fairway, Guaranteed Rate and Academy Mortgage. Feel free to DM me for suggestions for some good local loan officers. 

Hi Lauren, so you have a 5 unit and 4plex? I am not totally clear here on the situation, but you have good equity in the 4plex? Taking out some money right now is a good idea. 

Originally posted by @Robert ONeill:

Who is buying these deals? Most of the stuff I've seen in the Los Angeles area at sub 4 cap rates and rent control are selling in weeks.

 Hey Robert, I invest in LA so I see this often. There are plenty of deep pocket investors, mostly rich families, that like owning real estate here for the long term. They're able to work with the various laws, but they also have a long horizon and often will keep these properties in the family for the long run if possible. Many of them use minimal debt, buying cash and refinancing or getting a bridge loan in a few years.

Also, we have a lot of foreign buyers here who are parking cash as you know. I think even in lower quality areas, plenty of them are buying these deals. I know of an under 3 cap property near Hollywood that traded for over $6 million, all cash to an Asian investor group that works with local management. Granted, Hollywood is a good area as far as rentals go, but you can find these sorts of folks buying in rougher areas too. 

Originally posted by @Nathan Myers:

Hey all, this is my first time posting on this forum. I'm a huge fan of BP! I was introduced to BP maybe a year and a half ago. I instantly fell in love with the podcast and YouTube channel. I quickly took action and was able to buy my first property: a triplex right outside Lancaster, Pennsylvania. I have been house hacking with my wife for a year. Recently I have received a significant scholarship to attend a seminary in Los Angeles. So in the beginning of January 2022 we will be moving out to LA. I do not want to stop investing in real estate even though I will be a student and in a very expensive market. I have a strong desire to be financially independent one day. I would love to adopt children, and even pastor a church for free in the future.

So there's some of my story and goals in life. What options do you all think a seminary student has out there?

 And if there is anyone near the Sun Valley area that wants to meet up, I would love to once I get out there.  I am eager to help/learn more about investing and property management. 

Thanks

Hi Nathan, house hacking a triplex or fourplex is tough here unless you have lots of cash. I have seen people in LA do house hacks where they rent rooms in the house and screen tenants carefully. That is an option also if you're comfortable. Overall, I encourage you to keep pursuing real estate, and welcome you to our city! 

On multifamily, I think East LA can be a great market on long term holds if you focus on value add deals and have high down payments and reserves. Long term holds in LA are incredible investments.

 Your other option is to buy a value add deal, improve it over a few years, and exit. With single family, NELA in general is great for flips, assuming you have a good crew. 

Originally posted by @Zoltan C.:

I've had a tenant for about 3 years now in Los Angeles and as of November he stopped paying and said he wants to use the housing is key rent relief program. He applied for it and has been promising me that I would get paid but this has been going on for more than a month.

Now he owes me both November and December rent and is ignoring me. I also made a claim at housing is key as a landlord and they cross linked them but every time I call, they say it's in review.

Can I post a 3 day notice to pay or quit ? Can I start a small claims. Los Angeles ordinance/moratorium makes this very difficult to navigate.

On top of it, he has indicated he could pay but is waiting for this program to pay. This to me is Fraud.

 Zoltan, sorry to hear about this. I am a local attorney and investor. The rules are changing fast, so it could make sense to speak with an attorney as to your options. I am happy to share the names of a few colleagues if that helps - feel free to send me a colleague request.