All Forum Posts by: Alejandro Arciniega

Thanks! I forgot to mention they are month to month. Can I just write the letter and place it in their mail box or do I need to have it certified? 

I have a property I've been renting out for the last 5 years. I currently have great tenants in place but I make sense for my wife and I to move back to the property to start our family. We are expecting our first child in mid July and want to get into the property by April 1st to start some remodels before the baby comes. I've communicate this to the tenants and they are understandably sad as they would rather stay but are understanding of the situation. I've essentially given them a 90 day notice via text but would like some advice on the situation. Do I need to formally serve them with 60 day eviction letter? We have a good line of communication and I don't see them not vacating on April 1st but would it be unwise to take their word for it?  Thanks for you guys input. 

Hi Guys and Gals! Thanks in advance!!!

My wife and I have been getting beaten out by cash offers left and right. The only way to be competitive in our market (So-Cal) is with a cash offer. My mother in law has some cash she is willing to put down the cash to get us in and close a deal. I've talked to my lender and she has a product called a "Cash recoup loan". Basically we can refi within 90 days and pull 80% out of the property to pay back mom. My question is, what kind of tax implication are we going to run into?  

We plan on putting mom on the title along with us, then pull the money out, giving it to mom and then doing a quit claim deed.  Will she need to pay taxes on the money we give her from the refinance? 

Thank you for your reply Tony. We are in southern CA, the 150k is the down payments. I've got about 300k in equity in the rental and I don't think that would be me very much locally. Thats why I'm interested in to out of state brrrr's. 

Hoping to get some clarity from you fine folks.

I purchased a SFH in Southern California and have been renting it out for the last 5 years. It's currently cash flowing $800/month. My wife and I have been renting a small unit in an area in town we preferred more. I've always been interested in real estate investment and want to invest out of state. We've managed to save 150K to start start our investment journey but here is the rub. My wife is tired of renting and has become very excited about a house that has come onto the market and wants to put in an offer OR move back into the SFH. What would make the most sense?

1) Keep SFH(rental), purchase the nice new home using that 150K and put investing in real estate on the back burner?

2) Move back into the SFH, loose that cash flow but keep the 150k and use that for renovations and investing?

3) Purchase the nice new home using that 150k and sell the SFH and use the 350k in equity to invest out of state?

4) Something I'm not thinking of?

Thank you guys and gals in advance. 

@Ali Boone No, we've never done anything like this before. I consider myself handy but this is a complete remodel. 

Yes, this is a SFR. The cash flow I'm referring to would be income from our day jobs. The plan is to live in the home for the foreseeable future. There is a small bungalow in the back that could eventually be turned into an airbnb and would easily be rented out being so close to the beach.

Setting the stage:

My wife and I have been looking for quite sometime for a good opportunity in our area, southern California, beach community. A realtor I've been in communication with called me up and said I have something you might be interested in. It was a pocket listing from her office that was going to go on the MLS in a day or two. The home is a 1920's home within a 4 min bike ride to the beach but needs a total remodel. The roof needs to be replaced with rafter repairs, need new electrical panel and rewire, a wall needs to be removed, needs a new kitchen and bathroom. We made an offer to try and avoid letting it go on the MLS and getting into a bidding war and they accepted. After some negotiation they have agreed to replace the roof (only a 25 year) and declined to credit us a 9k for the electrical work.

The numbers:

Purchase price - 639,000

Repairs - 120,000

ARV - 850,000

The Problem:

We are going to be using most our savings for the 20% down payment and will have to borrow about 75,000 from family for the repairs. After paying the mortgage and the repair loan, we will cash flow from our income 4k. We plan on having a baby next year and if my wife stops working we will loose that 4k for a few months making things very tight. Flash forward 5 years, she will be back at work, loan paid we will be living very comfortably 7k cash positive a month.

Is this deal not worth being tight for a year or so?  Am I about to spread ourselves too thin? Is there a better financial strategy I'm not thinking of? Is this just bad all around?  

My wife and I have talked endlessly about this and have flip flopping on what we should do. I was hoping to get an outsiders honest opinion.  Thank you so much in advance. 

Thank you all so much for the input. It doesn't look like this is the wisest investment. I'll continue to analyse deals and wait for the one. 

New to the group and first post to please bare with me.  I've been looking in West Michigan market for a few months now waiting for the right opportunity and I think I might have found it but I wanted to run it by some pros.  Is there something I'm missing? Something I should watch out for? Does the deal sound good? Should I walk away?

Here it is:

3BR 1.5BA 1844SQFT good area but home is in pretty bad shape. Looks like it was turned into an un-permitted duplex and rented to 4 college boys. I would want to return it to a SFH.

Purchase Price - $100k (I would pay cash for the deal)

Renovation cost - 35K. Had one contractor check out the property and this was his number.  He was recommended to me by a friend but I have not seen his work. When he walked the property he said it needs a new furnace, gas leaks, roof is leaking.  Is 35K reasonable for a large renovation?  

ARV = 150K very conservatively. Homes in the area range from 150k for 3br 1ba 1300sq to 206k for 4br 2ba 1800sq.

Estimated rent from rentometer is $1200

Recap/Numbers:

Cash in $135,000

ARV $150,000

Refi 75% ARV = $112,500

Total Invested after refi - $23,000

Cashflow less 5% vacancy, 5% capex, 5% repairs, 10% management, Insurance, P&I =$668 

Those numbers look great to me. Do they look good to an experienced investor? First deal so its a little scary to pull the trigger.