All Forum Posts by: Aron D.

We have a duplex and a condo. HOA should cover most exterior. Condos are nice, but I think another play is in the value of the land and how it is zoned. If you can find a multi-family close to downtown, then it would be a good future appreciation play.

It isn't expensive.  Just $50 per door per year unless you have an exemption.  It could be worse like 5% that HI imposes.

I have not lived in Linda Vista, but looking at the map it is above Mission Valley.  It is definitely an upgrade from 92102 and should command more rent and also be more expensive.  Just make sure to do a thorough home inspection.  We had to deal with old termite damage, roof replacement, electrical upgrades, and misc. maintenance items.  I don't regret purchasing rentals in SD. You will also have to pay the city a rental unit business tax. 

https://www.sandiego.gov/treasurer/payments/rtax

I have rentals near that area.  We have 2/1 that rent from $1200 to $1400 and 4/2 that rents for $2000.  The rents could possibly increase, but the tenants have lived in the properties since 2008 and 2010.  Rental market is tight and studios are going for $1000.  I attached links and hopefully the area starts to gentrify.  It is the rougher part of SD, but close to downtown.  I've never been to the Bay Area so not sure what would be comparable.  If your property is more towards Balboa Park, then it is a good area, but if more towards cemetery, then it is a little rougher.  Hard to believe, but if you visit you will definitely get a feel and see the difference.  Good Luck!   

http://www.sandiegomagazine.com/San-Diego-Magazine/March-2016/San-Diegos-Next-Hot-Neighborhoods/

http://www.governing.com/gov-data/san-diego-gentrification-maps-demographic-data.html

http://www.city-data.com/zips/92102.html

Sorry to add more, but we sold a condo on Oahu 2 years ago as it was negative cash flow, but have appreciated and we wanted to free up capital to work on fix n flip projects.  We should never have sold as within 2 years the property appreciated $75k.  The person that purchased the property was a Chinese lady that bought it within her trust.  It was negative cash flow for us, but they are looking to park money and don't mind low returns.  The largest headaches I've had in real estate investing journey have been my investments in Middle America (out of state).  They have consistently lost money as the people can't afford to pay $700 rent and the repairs have come in equivalent to what it costs to repair a house in CA.  You can generate $2,500 per month rent and have an $8k roof replacement or a $700 per month rent and your roof replacement still costs $8k.  It only takes a few months to recoup your costs in CA, whereas it would take a lifetime to cash flow for out of state investment.     

As others have pointed out, the markets with the most appreciation potential are the ones that have foreign investors that park their money to preserve their capital.  Look at any other large city in America like Seattle, Miami, LA, NYC, or Honolulu.  Where do most people travel and do business?  Same could be said for any other large business hub internationally (Paris, Beijing, Tokyo, etc.).  I've noticed a trend everywhere that I've lived where gentrification is converting rough areas in the city and turning them into higher end properties.  They are pushing out locals that have lived their for generations and can't afford the area as they never bought.  If they bought and then eventually sold, then they get pushed out.  Look at local LA, San Diego, and Hawaiians that sold their land or homes or never bought.  They end up being pushed out to lower cost living areas or suffer paying 50-70% of their income to housing. 

In parts of CA, people are renting studios, converted garages, living rooms for $600-$1200 a month.  People either have to commute 2-4 hours per day for their jobs or pay more to live closer to work.  The cost to build and environmental regulations are a barrier to build housing.  Another issue is immigration.  You can see immigrants that work for people that have more expendable income to hire gardeners, nannies, and laborers.  A test could be to drive by your local Home Depot and see how many guys are just hanging around looking for work.  The Home Depot in San Diego is lined with guys waiting for work.  I don't see that at the Home Depots in AL or MS.       

Originally posted by @Roshan K.:

Treat your tenants how you'd want to be treated.

I used a turnkey provider and was offered a 9% return on my note purchase.  I am in CA and the property was in PA.  I got steady payments for 18 months and then it started to go downhill.  I had to constantly follow up about interest payments and eventually found out the turnkey provider was going under.  The property was given back to me via deed in lieu of foreclosure.  I obtained a property that was in bad shape.  It had back taxes, utilities, interior beat up, and the roof was shot.  During this time of transition, PA was in a winter storm and the pipes burst in the house.  The property manager and contractor repaired the damage.  After 4-6 months the property finally was in a condition to put on the market to try and get my money back, but it took all the interest payments plus extra funds to get it to this point.  We priced the property equivalent to the amount a down payment would require on a house in CA.  I didn't realize the challenges in investing in such depressed areas.  As Charles Roberts stated, it is not worth it for me to trust a 3rd party that I am not familiar with.  I was referred to this company by my 401k provider and assumed they did their due diligence. 

Everything could go smoothly for 1 to 2 years and then once things go downhill, then it can get bad quickly.  I have the best luck and income from investing in properties that I can drive by everyday and vet the tenants myself.  If you feel like flying out and visiting the property yourself and seeing the condition it is in before you buy and during the rental period, then go for it.  I just can't justify the hassle for $200-$300 profit per month.  The back taxes I had to pay to make the property current was $4k, new roof $7k, rehab interior $10k.  It was the largest headache for the least amount I've ever invested in real estate.  Hopefully I can recoup some of the money invested and not take too much of a loss.  Also hope the property management company is honest about repairs and the mechanicals of the home can stay together by the time I get an offer.  It is currently rented and the renter stated bed bugs were in the house.  It has been vacant for 6-8 months.  I got a quote from them that the exterminator wanted $1400 to rid the house and I had them get additional quotes.  It cost $750 to get rid of the problem.  Good luck on whatever you decide to do.   

I also got the program regarding filling furnished rooms with students, handicap, etc. I haven't implemented it as not sure of local laws or have enough time to manage tenants per room. I would imagine similar to airbnb concept without the hotel approach and more of longer term lease. Also similar to what people call househacking today.

I am interested in contractors in Rochester, Pa.