All Forum Posts by: Clarence Johnson

Pay a management company.  I generally send people to evict123.com but each city and scenario will be different and the cost to pay a management company or eviction attorney will be well worth the protection it offers.  I have a phone consult with an attorney Mon for a separate matter, $60 per half hr is well worth value they will provide.

@Daniel Johnson a 6 unit will require a commercial loan with 25% min downpayment.  Section 8 rents are competitive and in some cases with specific programs (VASH for veterans and HIP for homeless) they can be above mkt rents in the area.  You need to vet and interview tenants as you would with a cash tenant, which tends to be where people go wrong.  Some believe the tenants are "checked out" because they have a section 8 voucher and this is not the case.  Yearly or biannual inspections will occur in the City of LA even if you do not have a section 8 tenant as it is part of the RSO (Rent Stabilization Ordinance), the standards for section 8 and the city are not far from each other so if you can pass one you likely can pass the other.  I have clients and colleagues that recently told that LA is offering a bonus $1000 for placing section 8 tenants, likely an incentive to compete against cash tenants. Diversifying between section 8 and cash tenants is a good strategy that can be beneficial, especially considering section 8 income comes from the gov and must be reported back to them.  It sounds like you have hopes of buying a vacant building and placing tenants, chances of finding a vacant 6 unit will be very slim.  If tenants are already in place RSO will prevent you from having much rent upside and section 8 will allow annual increases but probably not at the rate you will want or need.  A deal can still be found, but definitely consider the aforementioned in your search.

@Roman Rida do both, FHA a duplex as the other poster suggested and go for a 25% down out of state investment.

Also, while I align with keeping the family safe, try exploring markets a little deeper.  Most cities have safe havens as well as areas that I would not want to live in given an option.  Seeing Compton, Long Beach, and Inglewood as examples is kind of confusing considering 2 of those 3 cities have million dollar duplexes.

Whats the scope of the job, the plumber I would suggest for drain inspection, repipe are two different people lol

@Andy Patel I may have a contact for you, dm

@Henry W. is there any specific reason your choosing to put 15% down, and will you be paying MI (mortgage insurance.  Glad the others caught the taxes, 1.25% is a good rule of thumb for LA county.  

@David Frandsen Cali just passed new ADU laws for 2020 allowing multifam ADU's and up to 2 ADUs on some SFR's, most cities have yet to adopt the new ordinance but I'm sure its coming down the pipes. Inglewood asked me to come back in 2 weeks about 2 weeks ago.

@Aaron Kennedy some things are improbable, few impossible. First off, based on where we are in the market there are not many REO's. The one's that need heavy rehab tend to go to investors willing to do the work, and even those situations get competitive and push their margins thin. Depending where you are looking to buy, the condition of the REO, and the strength of the offer you absolutely can buy an REO using an FHA or even a FHA 203k loan when the condition warrants using it. The banks want money; aggressive terms, solid approval, and proof of funds can and in many cases do beat cash offers. Cash buyers don't typically have the margins to offer what you are willing to pay, and on the contrast you cannot lowball with a loan expecting to have it accepted because it is an REO. I see your from LA, as an example I just saw the 3/2 property at 22033 Ponitine Ave in Carson appear on my personal family home search today.  Judging from what I see this property can definitely go FHA, and the price will likely get pushed up by retail buyers (listed at $519k) as the area is usually priced closer to $600k.  The point of the example is actually to further inquire about the need to buy an REO and the illusion of getting deal.  The property I posted will likely close for very close to retail value, where we have had success making deals out of stagnant standard listings where the buyers may be under duress.  Reach out if you have any questions, stay the course.

San Pedro-Waterfront development

Inglewood-stadium, NFL Network, proposed NBA Arena, Jr Philharmonic

Gardena/Hawthorne-overflow from Inglewood and tech...theres about 5 breweries between these 2 cities and cool places like Base 51 (bar, food, race car simulator)

Are you showing all the income on your taxes, or possibly writing off to much?  Small adjustments on both sides can move the needle a lot.  Ask the lenders how close are you to where you need to be and exactly what they need to see to get an approval.  You could do 2019 taxes per their standards and if you and your accountant see's fit possibly amend 2018.