All Forum Posts by: Brian Ploszay

That sounds like a bad idea.  

I would hire an eviction attorney right away to review the lease.  Don't worry about being turned into some kind of rental board.  You just bought the building.  And the lease is a contract that is beyond their jurisdiction.

Continue to be professional towards the tenant and make required repairs.  Nothing more.  

I did not have any evictions during this time.  But I threw larger amounts of money to get a couple of tenants to leave.  I got lucky.

Another thing happened.   Almost no tenants moved last year.   Just now, tenants are starting to move, and it feels like an avalanche.  Pent up demand to move.  I live in a cold weather area, so this is all hitting late summer and hopefully stops by late autumn.  

Back to the eviction moratorium.  Today, it is set up that landlords can get some compensation from tenants who are not paying due to covid related unemployment.  Completely uncooperative tenants, you can get out.

Don't be discouraged by the area that you live in.  California rentals are very much in demand.  The problem is the pricing to purchase them.   California has various regulations that has made it the most difficult state to build new housing stock.  For more than 30 years, the state has not been building enough homes.  This has led to an imbalance and skyrocketing prices.  Also, it is the root of the homeless crisis, which is the worst in the nation by far.  With 30K and decent credit, you might be able to buy a house and house hack it.  Most stand alone rentals for smaller properties - will probably lose money initially.  

If you had a loan contingency, you should win this lawsuit.  Has the owner offered to replace the panel?  

Never do that.  For someone to do that, you are accepting some other disqualifying aspects.  And probably not doing your due diligence on them.

What is their credit, criminal and eviction history?  What is their employment, and employment history?

Go back to the basics of screening tenants.  Reject this one.

 @Tony Kim    I appreciate your analysis, but indeed there is a housing shortage in Southern California.   This is the result of 40 years of zoning restrictions and other regulations.  Los Angeles is the 2nd most populous region in the United States, yet it is a very horizontal city over reliant on the single family.  The term sprawl is associated with Southern California.  Here's an example.  If Santa Monica had more liberal zoning, the city would be complete high rises;  there is significant demand to live there.  

Yes, they are building more now and that is the result of finally loosening building restrictions.  Homeless problem?  Affordable housing traditionally has been older housing stock for cities.  The market doesn't produce affordable housing well.  But in Southern California, older buildings were revamped because of the strong demand for middle class housing.  Affordable housing disappeared.

Housing prices do reflect supply and demand.  Wages in California are not 3x other regions.  As for ADUs, they are hardly making a dent in supply gaps.  Let's see single family zoning lifted all across Los Angeles and outlying cities.   You'll see the biggest building boom in the country.

Those type of windows are not too uncommon in older houses.  Water obviously rots out the trimwork.

If you are going to do a full remodel, then a glass block window with a vent might be nice.  And recess portion should have tile and proper tile underlayment.  It must be adequately sloped so no water collects.  It must be completely grouted and caulked with silicone in the necessary places;  in other words, water proof.

California.

The economics simply work different in parts of California.  I grew up there and my parents still live there.  I had to figure out why my parents rather middle class house was worth well over a million dollars.  California, it turns out, is the most difficult state in the Union to build new housing stock.   The results of this are a crimped supply of housing stock that results in very high prices. And unfortunately, the worst homeless situation in the country.

For cash flow, you're not going to find much in coastal California.  There has been an appreciation run that has been incredible the last 15 years.  Too bad you didn't buy back then.   Matter of fact, I'll take appreciation of high priced properties over cash flow.  People made lots of money.

Can prices go up forever?  Aren't middle class people leaving California?  Is the gravy train over?

Anything can happen in the short term.  In the long run, California is still an attractive place to live, it has one of the most creative economies in the world, and a large supply of new housing stock is not  on the horizon.  

Turns out that attractive places are just more expensive.  And people have made a lot of money with expensive real estate.  

I thought this post was going to be about the high prices.  In terms of financing, 20% down on an investment loan is going to be the bet you're going to do.  Many banks want higher.

Good news:  Lots of folks are lending right now.  Shop around.

I've just refinanced a few properties at very low interest rates.  Very unusual:  We are in a period of inflation yet the interest rates are low.  The debt level on my properties are naturally going down faster this year.