All Forum Posts by: Tony Kim

So based on your spreadsheets, it would appear that the bottom line is that we would be trying to capitalize on the fact that a HELOC is calculated on a daily basis, whereas a traditional mortgage is not, correct? Couldn't we draw from the HELOC just one day before payday thereby accruing just one day's worth of interest?

Same here...but I should mention that this is for non-commercial financing.  In my experience with buildings that are 4 units or less, vacant units allow for more financing as the lending limits will be based on appraised rental rates instead of the deflated rents that typically accompany distressed properties..... particularly here in rent controlled Los Angeles.

Finding a suitable place to deploy my 1031 exchange funds. Had a few potential multiplexes that I thought might be OK, but had to walk away from them.

@Daniel Byrd I love these types of threads where one spouse has not bought into real estate investing and is handicapping the other from implementing his investment plan.

Mrs. Byrd...If you're reading this....Stand your ground! Insist on getting the house you want. My wife did the same thing and I'm very glad she did. 

My wife always tells me, what's the point of being financially independent if you are living in a house that you aren't happy with? I didn't agree with her at first....but now that we are living in the house of our dreams, I've bought into what she is saying and couldn't be happier. The house costed a lot of money and also costs a lot to maintain and upgrade....but I wouldn't have it any other way. 

I agree with your reasoning but there's a big difference between multiplexes and a house that has a nice ADU attached. I'm not saying an ADU will drastically increase the market value, because the data on that so far has been inconclusive. I'm just pointing out that you're making an observation on traditional multiplexes whereas the original poster is talking about simply adding an ADU to the house.

@Nikki O. I'm in a similar situation as you in the sense that my wife is really interested in building an ADU by converting our garage. Since we are within a half mile of public transportation, we are not constrained by the city requirement to have covered parking for your car.

Here are my thoughts when it comes to an ADU.

I hate ADU's that totally feel like garage conversions (although admittedly, they ARE garage conversions). In order to build it one so that it doesn't feel like you're living in a garage that's just been prettied up, you will spend a considerable amount of money..... probably more than whatever quote some of these local garage conversion specialists have told you. My wife's co-worker is in the process of building a 2br/1ba ADU ...they demo'd the existing garage and are building it from scratch from the foundation up and are almost done. So far, it looks beautiful....the type of property that I would love to live in if I were 10 years younger and single. However, it is costing them about $75K more and 6 months longer than initially estimated. But in the long run, it will be worth it because any hint of this structure being a garage has been completely eliminated, new utility meters have been done, and the property itself has its own address. Basically, his home was converted to a duplex that is perfect for house hacking. And I'm convinced that this structure will indeed substantially increase this property's market value.

You also must have a contractor that you know will do a good job. I have a person that I use all the time and 90% of his work consists of me and a few other of my closest friends. If I didn't have someone like him who I've used many times in the past with great results not only for me but also for everything he's done for my buddies, I'd be less confident about building an ADU.

With that said, there is no place in So Cal where you can spend 200K on a building and rent it for $2.5K. Although you will go through a lot of stress during the build process, the return on your capital will be hard to match.

Another option is to build the ADU and rent it as an Air BNB. We live in Wilshire Park, which is a very good place to run an Air BNB...and from what I can gather, you also live in a perfect place to run one as well. This will provide even better revenue, plus you get the flexibility to keep it vacant when you have out of town family visiting.

We looked at other places in CA that have higher cap rates, like Bakersfield and Fresno, but ultimately decided not to invest for reasons that are too long to list here. 

 500,000 at 5 cap will be 2,083 per month. Are you ignoring cost to carry debt?

Some section 8 agencies will hold off paying the first month to catch up on all the necessities and make a larger payment second month. But it is probably different for different agencies.

Regarding the paperwork to fill out, I'm also interested in what others have to say as I'm in the process of purchasing a property with multiple existing Section 8 tenants. My only experience so far has been with properties under professional management.  This new one will be local and self-managed.

Heart disease is the leading cause of death in the US for both men and women. What good is building up a huge pocket if you can’t enjoy what you’ve built! I don’t know if it helps my job performance, especially for me as I’m just an accountant who sits on his a$$ all day long. But working out on a regular basis sure does help my self-confidence, energy levels, my waistline, and most importantly, my health.

My pops had a stent put into his artery, so there is some family history for me. That’s why I try to base most of my diet around whole plant foods (I also fully agree that you can’t out run a bad diet). I also do cardio 3-5 times a week, walk my dogs every day for at least 30 mins, and also lift weights around 3-4 times a week to get a head start against sarcopenia and bone density loss as I age.

Here on BP, we always talk about how important it is to be honest with yourselves when evaluating a deal. I think the same is true for your health. You have to be honest with yourself when evaluating your health. Also, to avoid putting your health on the backburner like so many people do, it’s important to find a way to remind yourself EVERY MORNING of what your most important values are in your life. I’m pretty sure that every single one of you will list your health as one of your top five important things in life. As an example, some of my values are:

1. Make each day your masterpiece (Thank you John Wooden).

2. Act at all times as in the presence of God (Thank you George Washington).

3. Maintain a healthy, strong body.

4. Work daily towards financial independence.

5. Maintain a life of presence, simplicity, and sharp focus.

I have about 7 more which I read every morning before I start planning my day. But reading this list every morning is a reminder of what’s important to me and not forgetting to plan my day around my life’s most important values, which includes fitness and health.