All Forum Posts by: Mark Whittlesey

Perhaps you could name the city or agency as trustee (!) and maintain some level of control of designation of trustee as bene of your irrevocable trust : )

This is VERY funny!!! Just quit claim it to the city.. or the mayor. Like a reverse eminent domain. I LOVE IT!!!

1 Vote

A couple of quick questions for the appreciation gurus...

Assuming this is NOT a personal residence play (which I DO love)...

1) What cash flows (positive/negative how much per mont) are you accespting on day 1?

2) What down payment are you putting in to achieve that cash flow?

3) How are you retrieving your appreciation from the property?

Thanks.

0 Votes

Originally posted by @Jean Bolger:

Furnished units, especially furnished efficiencies will have probably have a LOT of turnover. That's a transient demographic.

This. Very much so. Efficiencies and 1BD are NOT my target unit mix.

I much prefer 1s and 2s or even better 1s, 2s and a few 3s.

How bad is the neighborhood if you can get it for 7K a door?

0 Votes

Originally posted by @Manch Hon:

All the examples people gave so far are of the "I bought this great deal at under market value and rehab it" type. This to me is just another form of appreciation. They are not collecting the $100 or $200 per door to become millionaires.

Yes. No one is becoming a millionaire just by this.

But with buy and hold:

1) If you finance correctly then your "fixed costs" are just that... fixed. (The TI portion of course is not. But the PI portion is). Rents will go up over time so that your cash flow will increase.

2) For the PI portion, you will gain equity through mortgage paydown. And this gain will accelerate over time.

3) Even for the most cash flow-centric areas, I would expect some modest (1%? 2? 3?) appreciation due to inflation. If this is not happening (I see you there, Detroit) then something else is going on that should concern the investor. This compounding over time in combination with #2 does matter.

4) Given 2 and 3, the investor will have various options after X years to change the portfolio. (Re-leverage and acquire or de-leverage and hold.)

5) If you work a J.O.B. buy and hold provides substantial tax advantages which should not be discounted in the analysis.

#1 is bit more tricky now with all the financing changes. (Go back and read some old style REI books. "Getting in" was all that mattered and there were MANY ways to get that done with minimal down payment.

2 Votes

If you are looking for cash flow with a reasonable down payment, then San Diego (like the other major cities in CA) is not the place.

If you are not willing to go out of state then least out of metro areas is good.

In addition to Bakersfield, you might look at Imperial County.

Best of luck.

0 Votes

Originally posted by @Richard C.:

Originally posted by @Jonathan Twombly:

@Manuel Sarabia If you listen to the people on this site who tell you not to put your property into an LLC and only buy insurance, you will be completely and totally screwed when the courts make an award larger than your insurance coverage and the plaintiff takes all your personal assets.

You will be equally screwed if you think an LLC is a sort of magic bullet-proof vest.

The vast majority of people with LLCs do not actually manage them as separate entities. They co-mingle funds, they do not maintain clear and consistent lines of responsibility, etc. The result is that courts can and do set the LLC aside and allow a case to proceed against the individual.

This may be true. But its NOT an argument against setting up an LLC. It's an argument against NOT running your business... like a BUSINESS.

0 Votes

Originally posted by @Manch Hon:

@Matt Mason Personally I think the California business burden is overblown. True, we have high taxes and higher housing costs. They are on the negative column. OK, make it super negative. But on the plus side we have world class talents, many of the world's top universities, great weather, on and on.

It's not overblown. Look at the regulations. For an "office" type building... like hi tech... yea, it's probably not too bad.

But try to open a restaurant? Have fun with that..

0 Votes

I think those blankets are too broad.

Personally, I don't like buy and hold (rent) on mobiles. But I do like buy and sell on contract to an owner occupant, especially if you also own the park and can get the lot rent.

As for parks... I think fixed, tied down mobile home parks are fine. But RV parks are more like a business than an investment.

Cheers and happy investing.

0 Votes

I would assume that the cottages would rent more quickly. By cottage.. I am assuming detached.

I don't see that the decor etc. variance would really matter unless they were just grotesque looking... but even that could be changed.

So I would say cottages.

0 Votes

All Forum Posts by: Mark Whittlesey

Mark Whittlesey has started 2 posts and replied 216 times.

Post: How can I un-own a property ?

Post: Cashflow Doesn't Build Wealth?

Post: 10-unit building deal

Post: Cashflow Doesn't Build Wealth?

Post: Real Estate Isn't Rocket Science! Newbie from San Diego, California (also Bakersfield)

Post: What happens if my apt building burns down and someone dies. How screwed am I?

Post: Appreciation - how to factor it in?

Post: Negative perception of Trailers/Trailer Parks

Post: Your thought on the security deposit

Post: Deal comparision: 10 unit apartment vs 10 cottages