All Forum Posts by: Arlen Chou

@david 

@David O. The HELOC strategy is something that I have used with great success in the past. It only works in appreciating markets like the SF Bay Area. Basically, I would pull a HELOC on an A-class property to buy a property in a C/D-class area. The purchased property needed to have the potential for BOTH forced and market-based appreciation. This strategy allowed me to look like a cash buyer. I would then force appreciation and ride the market appreciation wave for 1 year (seasoning period). At the end of 1 year, I would put direct debt on that building and pull of my cash out to pay down the HELOC. Essentially I was reloading the gun.

However, I would be very careful about using that strategy now. As you may know, Wellsfargo pulled back on their LOC's. This could be an indicator of problems to come... It might be a safer bet to lock in a normal loan and eat the financing costs. Just my opinion and you know what people say about opinions...

I wish you the best of luck!

Hello everybody,

Unfortunately, we did not get enough people to sign up for the event so we had to cancel and refund everybody who did signup. Hopefully, there will be another Bay Area Real Estate Summit next year. Many of the same speakers, but over a 2 day period.

Take it easy,

Arlen

@Matt Dello Russo the process takes at least a year. Typically, banks will not re-evaluate the value of properties in less time. I have heard of 6 months, but I have never done it that quickly.  In my case, I had strong market and forced appreciation working on my side. Essentially, I was able to let both types of appreciation help me past the 20% level so I could pull most, if not all of my initial money out of the property in one swing. Basically, you have to be in an appreciating market to use this strategy.

Come on out, learn a few things and help a great cause!

https://www.biggerpockets.com/...

@Christian Aguirre check out my post for a meetup next month. I hope to see you there.

https://www.biggerpockets.com/...

Come on out to the event in Fremont. We have great speakers and panelists covering a wide range of topics. I just posted details here on BP. 

https://www.biggerpockets.com/...

The past 18 months have been a difficult time for real estate investors, new and old. Not having the benefit of meeting people face to face to discuss deals or learn about strategies has definitely put many newer investors in jeopardy. Coupled with the fact that the market and the political climate of the SF Bay Area have drastically shifted, getting together and sharing knowledge is more important than ever.  

In an effort to get people back in contact and dialog started again, we are putting together a group of speakers and panelists to get people thinking about how the markets have changed and what may or may not work in the future. This will NOT be a high production wiz-bang event, more of a large working group of people who want/need information to get ready for the changing market. Don't expect free food or high production graphics. More importantly, don't expect booths of people pitching their services. There is NO corporate sponsor. Think of it as a large-scale meetup. This will be an opportunity to make contacts and hear people with real experience discuss what they have seen over the past 18 months and what they might see coming in the future.

Topics to be covered:

1. Overview of the past 18 months and forward projections: Michael Zuber author of One Rental at a Time
2. Traditional and hard money lending: Chris Mason and Sean Pan
3. Out of state investing: Sean Pan and Sharon Tseung
4. Furnished rentals: Al Williamson
5. Flipping: Jeff Pollack and Diana George, Moderated by Hayden Hsu
6. Syndication: Anthony Addessi and Sam Grooms, Moderated by J Martin
7. Development: Jay Hinrichs

All speakers are donating their time and knowledge in an effort to help the real estate community. All NET proceeds will be donated to Habitat for Humanity.

I hope to see you all in July,

-Arlen

Sign up at https://www.eventbrite.com/e/s...

@Adam Kuszczak keep in mind that cash flow is not only a function of purchase price and rental price. A large factor in cash flow is the down payment. The larger the down payment the lower the monthly nut. Maintenance costs are also a huge grey area. I understand that many people underwrite with a general number for each property they analyze, but the reality is that each building will require different maintenance budgets.

If you look at the macro state of affairs' in the Bay Area, I don't think the supply of properties will catch up to demand anytime in the near future. As a fact, the government is boosting demand with their proposal for a first time buyers credit on the owner occupant side and their call to limit 1031 exchanges which will further push institutional money into the SFR market. On top of that, if you believe that inflation is coming down the road because of all of the cash that was printed last year, I think real estate appreciation in the Bay Area is not going to go away in the near future.

The secret sauce is trying to figure out how to make the numbers work so you can take advantage of the appreciation.

Good luck to you!

-Arlen

@Shira Laux yes, that should work. Just as an FYI, depending on the city, permitting is taking longer because of COVID.

@Shira Laux first thing you need to do is really understand the loans you currently have on the property. I believe most mortgages do not let you tear down a house because the actual security of that loan is the existing house... I personally have done a "remodel" in the SF Bay Area. I say remodel because we left 1 wall and the foundation, but everything else was torn down. We went from a 3/2 to a 4/2.5 and added about 1000 sqft, but that is beside the point. I pulled my construction loan from the same bank so they knew what was going on and they approved everything. I would suggest that you get the lenders involved before you start knocking things down.

Good luck to you!