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All Forum Posts by: Becca F.

Becca F. has started 24 posts and replied 797 times.

Post: Cash Flow Killers in Real Estate (And How to Avoid Them!)

Becca F.#3 Starting Out ContributorPosted
  • Rental Property Investor
  • San Francisco Bay Area
  • Posts 802
  • Votes 1,166

- Property tax increases 

 - Not raising rents enough. I was advised early on by two investors who never raise rents on good tenants - that was a huge mistake, kept the rent the same with lease renewal. As much as I want to be "nice" landlord, this is a business, not a charity. 

Trying to find a balance of raising rent enough but not excessively high (e.g. $200 to $300 increase on SFH in Indiana) to where the tenant will move out, leaving me with a vacancy and a unit turn.

- Repairs: buying Class C older (built in 1920) homes which have been renovated many times by previous owners. I'm -$300 to- $500 a month most months now for 2 years. I think I've had maybe 6 months where I was net positive. 

Post: Feedback about Flip Secrets by Jake Leicht

Becca F.#3 Starting Out ContributorPosted
  • Rental Property Investor
  • San Francisco Bay Area
  • Posts 802
  • Votes 1,166
Quote from @John Hoschouer:

Now more than a year into real estate investing. If i had it to do over again I would not purchase Jake Leights program again. 
You can het all of the details from Bigger Pockets, watch the podcasts, buy the books. However, this is a hard and costly journey if you dont have a mentor.

Last year i went to BPCon, it was great. I have also joined ProjectRE which has been amazing. great community, but also great mentors actively participating.


Find and connect with other investors in your area, yes theres competition, but the good investors realize theres plenty of projects and are happy to connect and share ways to be successful.


Thanks for sharing your experience with the program. For me, the hard money loan interest rates were high and all the stress and risks for flipping weren't worth it, especially trying to do this out of state. 

Are you continuing to flip or doing another real estate strategy? 

Post: Out of the mixing bowl and into the frying pan!

Becca F.#3 Starting Out ContributorPosted
  • Rental Property Investor
  • San Francisco Bay Area
  • Posts 802
  • Votes 1,166

Welcome to the Bay Area and congratulations on your recent graduation and new career! 

I recommend attending local meet ups. You can look them up on Facebook (would be cautious of some of the people posting trying to sell you things) or MeetUp.com

Here is one:

https://www.meetup.com/bayarearei/events/306702586/?eventOri...

The organizer of the group has done previous meet ups including a walk-through of a newly constructed ADU.

Someone gave me this link but I haven't joined it (yet) about small property owners. 

https://www.smallprop.org/contact/

Post: Feedback about Flip Secrets by Jake Leicht

Becca F.#3 Starting Out ContributorPosted
  • Rental Property Investor
  • San Francisco Bay Area
  • Posts 802
  • Votes 1,166
Quote from @Rahman Sobhan:
Quote from @Jisoon Park:

Hi, Rakesh

I'm looking into joining Jack Leicht flip secret program too, but I'm not sure if this is worth it to join and invest money into it. How long have you researched the program?

 I was able to get Jake's rehab calculator for free over 2 years ago.  He will email it to you but just ignore the texts  with a rep trying to get you to join the program. Don't pay any social media guru $15k or whatever amount for a program. Use that $15k to pay for your renovation costs or purchasing your property. 

I used his rehab calculator for an attempted flip with doing it as a BRRRR for Out of State properties (Indiana). The calculator was alright but there are probably better calculators out there. Didn't do any of that. Flipping isn't as easy at it looks and to me it was too risky especially OOS after talking to honest construction management companies...hard pass for me.

Going back to John's comment about the projected profit for $15k and him winding up with $2k. That is not worth the stress and hassle to do a renovation for $15k, let alone $2000 - there are holding costs and what if it doesn't sell, what's the exit strategy: rent it out? Does that property and neighborhood support renting it out and are you ok renting it out with negative cash flow? 

Just leave your money in a High Yield Savings account for $2000 or buy some index funds for $15k.  For me $30k projected net flip proceeds isn't worth the stress either. I think flipping profits are reported as ordinary income on tax returns. 

I know a couple of experienced investors that have flipped successfully in the Bay Area (primary home buyers will pay top dollar for renovated home in a nice area). I think their net proceeds were over $100k. 

I would attend local meet ups in California and network with investors and contractors. You need to know a lot about construction costs to flip or BRRRR. Ask them if you could walk some projects if you really want to flip.

Post: California Prop.19, property taxes and rental properties

Becca F.#3 Starting Out ContributorPosted
  • Rental Property Investor
  • San Francisco Bay Area
  • Posts 802
  • Votes 1,166
Quote from @Alan F.:

It's my understanding that the child has to live in the property 2 years prior to the death of the parent.

I've been told to make sure every bit of paperwork i.e. DL, Voter reg etc reflects the home address.

not only does any CA Corp pay the $800 annual filing fee, but minutes and documentation and all corporate requirements must be met, regardless of how many people are in said Corp.

Am I incorrect? Any suitable alternatives?

I highly doubt prop 19 will be repealed.

it looks like the state will get it's pound of flesh without repealing prop 13.


 I haven't read about that part yet, that the child has to live in the property 2 years before the death of the parent. I haven't seen that in the Prop. 19 wording.

So I'm thinking I should move into the property that my kids would most likely live in so that it's my primary residence and it would become their primary?? It becomes complicated with more than one child. Structuring an LLC is confusing, would need to talk an estate attorney and/or other professional about this.

I did sign a petition and circulated it  to recall that part of Prop 19 last year but there wasn't enough publicity and not enough signatures to get it on the ballot. 

Post: Do people consider property taxes rates when choosing a market

Becca F.#3 Starting Out ContributorPosted
  • Rental Property Investor
  • San Francisco Bay Area
  • Posts 802
  • Votes 1,166

I'm do consider property taxes and if there is a property tax increase cap for investors now. Before I wasn't looking at those factors as much. 

As far as Texas I do know California investors who have bought there, but more recently it seems to be commercial real estate, apartment complexes specifically. 

I've also found that even though the Midwest is affordable from lower purchase prices, the property tax rates can be pretty high. Mine are 2.7% and 2.77% for Indianapolis metro area (two different counties). My property taxes increased 17% in the last year, reducing my cash flow unless I do a significant rental increase. 

I compared notes with Nevada and Arizona investors and their property tax rates are much lower for a single family home that is worth more than twice as much. 

Post: California Prop.19, property taxes and rental properties

Becca F.#3 Starting Out ContributorPosted
  • Rental Property Investor
  • San Francisco Bay Area
  • Posts 802
  • Votes 1,166

Since Proposition 19 was passed and went into affect after Feb. 15, 2021, this affects us owning rental properties who wanted to pass on real estate portfolios to our heirs. Their property taxes would skyrocket, unless it's our primary residence and the kids move into the property.

TLDR: So should investors put our kids (over the age of 18) on title but they would lose the step up basis in value (for capital gains and capital gains tax which is separate from property tax issue) if they are on title and they choose to sell off the properties? Unless Prop. 19 is repealed, then it would be better if my kids sold off the rentals and take the money, so much for passing on real estate for future generations in California. 

Possible strategies: I do know an investor who set up a California property in an irrevocable trust prior to Feb. 15, 2021. The first article discusses transferring properties to a family LLC. Before I go pay an estate attorney to restructure everything, thoughts about these strategies?

https://www.kaidenelderlaw.com/blog/2023/march/can-an-llc-he...

https://calawyers.org/real-property-law/prop-19-beware-of-pr...

https://www.cunninghamlegal.com/california-legal-services/ca...


This is my understanding of Prop. 19. Please correct me if this is wrong (I copied and pasted this from someone but I thought this was a good explanation without using a lot of legal language). 

  1. 1) After 2/15/2021 an inherited home that was the parent’s primary residence (assuming transfer from parent to child in this scenario) a reassessment will be triggered UNLESS the child moves into the home and claims it as their primary residence. I have not seen any guidelines about the length of time one would be required to maintain the inherited home as their primary residence to prevent a reassessment. I’ve heard one year but can’t confirm.
  2. 2) One million dollar exclusion. The PRE- prop 19 law is written such that an inherited house is not reassessed regardless of value. Investment properties like my dad’s rental are (until 2/15/2021) subject to a 1 million dollar exclusion.

Prop 19 obliterates these rules. After 2/15/2021, an inherited home that was the parents’ primary residence will be subject to a one million dollar exclusion ONLY IF the child makes it their primary residence. This means that the first one million dollars of assessed value upon the date of transfer / inheritance is excluded from reassessment.

Example: parent pays taxes based on 275k purchase price. Home’s assessed value at time of inheritance is 1.4M 1.4 - 1,000,000 (exclusion) = 400k

New property tax base = 400k instead of 275k. CONFIRM THIS WITH YOUR ATTORNEY! I found this part to be confusing and might not have it quite right.

3) If the child does not make the inherited property their new primary residence, there is no million dollar exclusion, and in the above scenario (that you and the rest of us are racing to avoid) the child would be paying property taxes based on the 1.4 assessed value.

If you plan to sell an inherited property you’ll want to take advantage of the step up in basis for capital gains tax purposes. If parents gift you property while they are living you LOSE the step up in basis. Selling? Do not transfer property while parents are living.

Post: Are You Overlooking These Critical Numbers in Your Rental Property Analysis?

Becca F.#3 Starting Out ContributorPosted
  • Rental Property Investor
  • San Francisco Bay Area
  • Posts 802
  • Votes 1,166

-  Property tax

-  Insurance costs

-  Rental rates for long term rentals and mid term rentals 

I ask the agent is there a property tax cap increase for investors. What is the base property tax rate? Does this city have special assessments added onto the base property tax?

My focus is single family homes so the current owner may be a primary homeowner who may get a homeowner's exemption (called homestead exemption in some locations), so an investor would be paying a higher property tax. Is the value re-assessed upon purchase price? This is done in California, but not other states. 

Insurance costs - staying away from wildfire areas and flood zones

Post: Why I Encourage San Diego Locals to Invest Here First (Even if It’s More Expensive)

Becca F.#3 Starting Out ContributorPosted
  • Rental Property Investor
  • San Francisco Bay Area
  • Posts 802
  • Votes 1,166
Quote from @JD Martin:
Quote from @Becca F.:

This post needs to be pinned so that it's at the top of the Starting Out forum for every new investor from California to see this. Excellent comments which will save lots of people time, stress and money

@Moderators can you pin this post please? 


 Thanks for the suggestion, but it's easy enough to find for those interested 🙂


Just wondering what determines if a post gets pinned. I saw the LLC one that was pinned - that probably must be asked thousands of times lol

Post: Why I Encourage San Diego Locals to Invest Here First (Even if It’s More Expensive)

Becca F.#3 Starting Out ContributorPosted
  • Rental Property Investor
  • San Francisco Bay Area
  • Posts 802
  • Votes 1,166

This post needs to be pinned so that it's at the top of the Starting Out forum for every new investor from California to see this. Excellent comments which will save lots of people time, stress and money

@Moderators can you pin this post please?