All Forum Posts by: Dan A.

I'm interested in learning more about the foreclosure auction process for a specific property in California and had a few questions (well I have many, but I'll start with a few). Appreciate any responses.

Here's some basic info on the property:

Auction is Jan 2021

I estimate the property is worth ~$500k post-renovations

It is currently occupied

According to ServiceLink who is running the auction, there are two mortgages on the property - a negative amortization and a revolving credit line

The property was last sold for ~$400k in the early 2000s 

Here are a few of my questions:

According to RealtyTrac, the property has an estimated opening bid of ~$425K. In the description, it says that this is usually based on the remaining loan balanced owed to the lender. Where is RealtyTrac getting this number from? Is it accurate? And if it is, should I basically assume that the remaining loan balance is the floor on the auction price, because anything below that and the bank will simply purchase at that price? Assuming in this scenario that the bank thinks it can sell for ~$500k. 

There appear to be two liens on the property. How can I find out definitively which lien we are bidding on at the auction?

How can I determine the $ amount of unpaid property taxes?

The property is currently occupied. Is there any way to know if the property is tenant or owner occupied? 

The property is 4 separate 1 BR bungalows, and I'm looking to rehab 1 of the 4. I'm based in LA. 

I'm considering the purchase of a 4-unit investment property where one unit is going to require a gut rehab basically down to the studs, and I am trying to figure out how to incorporate that into my offer price.

Is anyone willing to break down the cost for something like this? Here's the pertinent info:

Apartment: 500 sq. ft

Foundation: Assume no repairs needed

Roof: Some surface granulation failures, will need to be repaired

Full gut renovation of kitchen, living room, bedroom, and bathroom.

Appreciate any and all thoughts. Thanks, Dan

@Mark Futalan thanks, the reg changes in La Quinta def. add a bit of uncertainty, but I still like that area a lot as you know.

@Luke Carl Goal is to set up in an area w/ the highest cash-on-cash returns w/n driving distance of LA. We have one in Palm Springs, and we are looking to expand..

Curious to hear from the collective wisdom of the group. I would probably choose Palm Springs, because it's an easy drive from multiple big cities, has established STR regs, and will always be in demand. What do you think?

Does anyone have a recommendation for either national or local lenders (I’m based in LA) that will include short term rental income in a debt to income calculation to help finance a separate conventional mortgage?

Thanks again @Kevin Romines and @Dave Spoonerfor the thoughts. 

Any tax experts reading this? Let's say both partners own a 50% interest, would everything get split down the middle? What about mortgage interest / depreciation? Does it matter that I would be living in the home? Would we still be able to take the depreciation tax deduction? 

Appreciate all thoughts.

DA

Thanks Kevin, that makes a lot of sense. Do you know how we should structure this? LLC / partnership or something else? And how would each party get taxed on the annual income?

My partner and I are looking into a 4-unit property where one party would actually live in one of the units in order to get better financing and a lower down payment. Has anyone seen or done this type of deal before? I'm not sure what makes the most sense in terms of how this type of partnership would be structured, or if this is not really an arrangement that lends itself well to a joint deal. Would appreciate any thoughts and perspectives, and especially an example if someone has done this successfully before (or can point to an example of someone who has). 

Thanks, DA

Hi all - can you please help me think through this scenario?

We are looking to buy a home that will be a SFR. One thought that's in the back of my mind though is the potential for turning it into a vacation rental down the road when travel opens back up again. What are the implications if we decide to do that? Do we need to wait a certain # of months / years before we do? Do we need to tell our lender? I'm also interested in purchasing another property - either multifamily or another vacation rental (which will be classified as an investment property from the start) - will converting our soon-to-be current property into a vacation rental impact that process in any way?

Thanks so much for any thoughts / replies.