All Forum Posts by: Andrew Jurinka

It depends on the state and your contract. There’s usually a clause that discusses a “lease break fee”. Often 1-1/2 times the rent.

You can also negotiate with the landlord. Never a bad idea. Whatever you agree to, have it signed. 

The near-term for SF is very bright. How many high-flying IPOs are scheduled for 2019 & 2020 in SF?  At least six including Airbnb, Uber, Luft, Plantir, Peloton and more. That will be some serious cash looking for a home. And by home I mean a home to buy. It’s hard to believe but the Bay Area will likely continue its run. It defies the senses but then again it is regionally home to Facebook, Google, Apple, Oracle, EBay, the above companies, and twenty to thirty other big companies. It’s staggering really.  For me personally, the only thing that scares me about SF is a major earthquake. Now that would ice down the real estate market. 

You will get a good gauge of what’s out there on your tour; the size, quality and location relative to amenities and attractions.

You’ll likely see there isn’t much for sale!  This has been the case for the last year or so but investors are now looking outside of Portland for yield and looser landlord oversight. 

Let me know your thoughts after your visit... I can fill in the blanks from there. 

Cheers,

Andrew 

For you, the buy and hold investor, “cash-on-cash”, as a measure of the return, is your true measure of performance. For example, your rental house of 300k that you own outright, house that you net $15k in annual income, the coc return is 5%. People use leverage, aka a loan, for more than one reason but one of them is to increase their return on their cash. Play with different scenarios that you’re comfortable with in a real estate-related spreadsheet or calculator (meaning the amount of leverage) to see how the returns are different. In other words, see what cashing out 50% from the rental and putting it into another property looks like to see what the individual and combined returns are. All things being equal (property’s expenses and rents), you will see that your returns are greater with leverage. That’s why people use leverage and why few people simply pay their mortgages down. In fact, most pull money out at the right time to put that equity to use in another property. Also, today’s money is worth less than next year’s money when there’s inflation. That means you’ll be paying back a loan with the future’s devalued money. And, don’t forget, all of the interest is deductible, something you don’t have with an all cash, 100% owned property.

I've owned property in Salem for two years and rents have gone up 20% in that period. There's not much building going on here and there are parts of town people simply won't live in by choice. Look for duplexes (and larger) or wholesalers with property that have upside.

Hey Jon, own two properties that amount to 38 units.  One of the properties is a a collection of duplexes.  I'm working with an agent right now on the pricing for duplexes in Salem.  I'm happy to share that info with you, tell you more about what I'm doing and also put you in touch with her if you need an agent.

Cheers,

Andrew

Don't forget about the tax consequences for doing a flip. Not exactly sure what they are but short-term capital gains are steep. If you like the location and overall condition, then keep it. Do a refi and keep that equity and avoid the tax payment. You can always do a 1031 at a later time. Hillsboro is a desirable place.

What are "bandit" signs?

Looking to connect with other Salem MF owners. I am one myself (40 units) but don't know others out there. Don't be shy. Likewise, happy to connect with folks who are interested in MF in Salem. Happy to share my experiences. Cheers, Andrew

Hey Nick, I'm an investor in the area and new to BP. Just wondering what you did with the property. Andrew