All Forum Posts by: Tony H.

@Wes Blackwell @Thomas S.Thanks for the insight. 

I guess I have been reading too much about out of state investing and got tempted. Now that I think about it, I am not comfortable at all doing out of state investing. 

@wes 

@Wes Blackwell would you be able to share a bit of certain areas of Sacramento nowadays? I am interested in class B neighborhood. What area would you recommend?

Hi BP,

I started my first investment in Sacramento 1 year ago and I have been looking to add more since then. 

While I have not pull the trigger to invest more in CA, I am interested to learning more about out of state investing.

I looked up areas like Michigan, Austin TX, Joplin, MO and I dont think they are worth investing since the ROI is about the same (probably a little better than what I got in Sacramento).

Anyone can chime in "Why should I invest out of state?".

I personally have that "fear" of putting money so far away and rely completely on PM.

Help me to overcome this fear.

Thanks BP!

Hi BP.

It's been a while since my last post. Things have been busy with new baby!

Anyhow, I purchase a duplex last year (time flies). Everything is going well so far. I am now trying to see what options do I have for my next venture. Here are the list that I thought about:

- Buy a land and build a home for rentals or maybe sell it.

- Get another duplex.

- Flip house

- Invest out of state in duplex or single homes.

I am in the bay area. My current primary home is needing an upgrade (due to additional family member). However, I dont see that we can afford upgrading in Bay Area now. Everything is so overpriced. Even if we sell our current home (roughly $700-750k), we wont be able to afford anything.

Therefore, I thought I should just utilize my equity to invest more and create cash flow.

Hopefully I can get some insights from some of you. I am not comfortable doing any of the options above (except getting another duplex to rent out), since I have never done it! and it seems more complicated than just buying a property and rent out.

Thanks BP!

Thanks for all the replies. I thought about getting the ac filters change and smoke detector batteries as an excuse. However, my lease says tenants are responsible for those items. So I probably cant use that excuse. I don’t believe they do it though. Maybe I should just wait another 6 months when their lease is expired and check it out. Its a lesson learned for me. Will change my lease clauses that allows me to get in there somehow. Like once every 6 months or so. Thanks all.

Hi BP, Its been a while since I posted here. I have been learning a lot from all of you. :) Here is what bothers me now. I bought a duplex in Sacramento 6 months ago. Since we put a new tenant in on the unit (the other was a inherited tenant), I never had to go there and ‘check’ if everything is okay. There were a couple calls in the last 6 months, one for fence repair which was done by my other tenant who is pretty handy, and the other was plugged sewer which I had a plumber took care of it. I didnt go there for these two events since I figured I wouldnt be able to do anything anyway. Other than that, no calls. All peace and quiet. Its been 6 months since I visited the units. I understand tenants want privacy. I drove past by the duplex few days ago, everything look Christmasy with the decorations. What is a good “excuse” for me to tell them so I can visit and look the inside? They are good people, i dont believe they would trash the place. But who knows?! People change. Thanks BP!

@Josh Saul are you saying they want you to pay $2000-2500 fees for them to tell you the tricks?

Dont pay it! There has been some speculations online "how to pay down your mortgage quickly with HELOC". Look up online.

I was considering that until I put everything on spreadsheet, then play around with all kinds of scenarios.

In conclusion, it's very tricky and not worth the hassle/risk. It's always easier to just put extra money in your monthly mortgage.

Fyi, HELOC typically are variable rates. If they offer you a guaranteed fixed rate which is LOWER than your current mortgage rate, may be worth a try. Otherwise, walk off.

@steven Hu , it is black and white business, but some if not most C class tenants have different type of understanding of responsibility than B class. They are most likely less educated too. I would think, explaining our lease terms to them takes a lot more effort. If they have a hard time understanding or just being stubborn (because thats how their personality), dont you think you have to have certain communication skills to make then understand what you want? If you are highly educated person, and you want to train someone who is not educated, you have to train them using baby steps and repetition until they get it. Meanwhile, Training educated people is different. You can use high level terms and vocabulary, and they get it. Anyway, my point is, I am not a good trainer. When I explain things to my lower level co worker, they are having a hard time understanding. Lol. Therefore, I know I dont have the skills and patience to deal with C class tenants. It's just not for me. To me, if I force myself to take C class tenants, then I am stressed out all the time, its not worth it. B class is my minimum requirements.

Jason Chen i was lucky I didnt have competition when I acquired the duplex. I got them into contract within 2 days after they listed on MLS. - probably not the best price, but again, I was aiming for long term appreciation. And yes, 60 day notice is required if you increase rent by over 10%. I increased my tenant's rent by 15% but then I charged water garbage for $100 flat monthly. This way I could increase my rental income without sounding like I increased their rent by 28%. - on a side note, even after 28% increase, their rent total is still about 30% below market.

@Youdo Thirakul Exactly like what I was thinking back then. C class yields more cash flow, but dealing with the problems make it all worthless.

Plus, I dont have the personality to deal with C tenants. I think it requires certain level communication skills and rationale (which I dont have).

My tenants now are self-employed gardener, and the other is a Doctorate student. They are both very well mannered when communicating with me.

So far, I have no issues. (but hey, it's only been 2 months). I sure hope things will go smooth.

Originally posted by @Stephanie Garcia:

@tony h. Did you have to put 25% down

 Yes, 25% down. that was the requirement from my lender for investment property.