All Forum Posts by: Ben Biggs

@Justin Campbell

Higher Investment Opportunity = Higher Risk 

If that return is real, seems like it would be worth it. I would personally put $3k non-refundable. If it's a competitive property then she is probably looking for serious buyers who won't initially giver her flack about the deposit. Act like you don't care if you lose it and hold the sellers feet to the fire if anything goes sideways. Hire a excellent agent who understand the local market. Worst case scenario even if something does go wrong you can just not sign the cancellation. That way the seller can't sell the property to someone else, and you're not getting your deposit back either way so who cares?  The seller has to know that people are going to come to play ball if she's making demands like a non-refundable deposit. 

I'm in! 

@Mia Trasolini thank you!! Yes it’s been a great couple of years. 

IMO what it really comes down to is feel for an area. It almost comes down to block by block in these up and coming areas. Some streets are obviously not ideal and one street up is all flipped homes with friendly people. In general San Diego is a pretty safe city. I would recommend Logan Heights, Encanto, Lemon Grove, Paradise Hills, City Heights, National City, parts of Spring Valley, Lakeside, El Cajon, etc for up and coming areas with potential. 

Data Points - be aware that the market has gone up 7.7% over the last year and is predicted to go up 30% over the next 5 years. Don’t get priced out. Rents never go down here, they either plateau or increase. So if you get your 30 year interest rate locked in that’s payment stability while the rents climb. Interest rates are going up too. It’s  slowly transitioning to a higher price point market. Look at LA. 

All the best! 

-Ben

1,000% I would. I own and lived in a duplex in one of the “sketchiest” areas in San Diego, Logan Heights, with a wife and a newborn baby so I could get my foot in the door of the market. That was 2 1/2 years ago and now I have $120k + equity, and I break even WITH a property manager managing both my units. I could probably squeeze a little more rent out too. I’ve sold homes in the nicest and worst areas of San a diego and the simple truth is that the “Sketchy” neighborhoods are simply working class people and as long as you are nice to everyone and are not trying to sell drugs they will love you and welcome Nice people. This market is only going up at least for the next 5 years or so, I’m looking at acquiring my next property within the next 12 months. I’m willing to deploy capital here and this is all I do 24/7.

Welcome @Irina Kovalenno! 

Thanks for sharing your story. Very inspiring! 

Personally I'm a fan of buy and hold. Units. 

I would take that $40k and identify an area that is up and coming, near a college, university or employment draw, and purchase a small condo as a rental. 1 Bedrooms or studios make excellent rental investments. 

I'm not familiar with the market up there so I always recommend finding a great agent through referral or here on BP who can assist and crunch numbers with you. 

Best of luck! 

-Ben 

Yes, I will send you a message. 

Hey @Chris Papa

This is my wheelhouse. 

I'll break it down for you. 

1. Pre-approval. Before you can begin shopping you have to know what you can afford. Units change things up because you can account the income of the units into the pre-qual amount so you have to identify several potential properties and check the numbers. It's a sliding scale. 

2. Get real. You have to be honest about what kind of return you're expecting. I know this market, you're in San Diego ( I'm assuming you're buying here) and this is notoriously known as a "break even" market. That's my general yardstick. Break even + 5-7 year minimum hold time + no deffered maintenance + San Diego's great historical appreciation = Solid opportunity. 

3. Work closely with an investment minded Agent/Broker. Have your deposit ready. Have your lender lined up. your Agent will need to know what kind of financing you will be using (VA, FHA, Conv).

4. Be ready to move quick. 

5. Trust But Verify. 

BiggerPockets spreadsheets don't work in California. 2% rule, 50% rule, etc. Throw all that away. Doesn't apply here. Go for break even at least and try to get the best deal you can. If you're cashflowing $100-$200 a month you are WINNING. 

It's not terribly difficult - just start putting your team in place. 

Let me know if you have any further questions. 

-Ben 

Hi Mia, 

Welcome to the Site! BP is a massive resource for RE investors... myself included. 

I'll shoot you a DM. 

Best, 

Ben 

@Michael Halow 

On it! I'll DM you. 

Ok, so first off this is a probate sale. Any number of factors could lead to it being on the market for 155 days, which you would have to talk with the agent about, leading me to my second point, you cannot just "contact the owner". The owner has a listing agreement with an agent, and the agent has probably been through hell and back going through multiple and various kinds of situations with this property and probably knows everything that has happened. He would be the best resource to start with. I would *NOT* just flat out approach the agent like you're a buyer without representation because he will do everything in his power to get you to buy it directly from him (double end it), meaning you will have no representation and possibly less than favorable terms. I would approach it casually and just ask:

1. How much activity the property has had

2. If there are any offers and how strong he feels they are (you shouldn't ask directly but if he's not happy with the general direction of the negotiations a GOOD agent will more or less let you know) 

3. Write up your LOI from there and have your proof of funds/pre - approval ready and just go from there. It doesn't matter if you think the property is overpriced it matters how much interest it has had and the offers on the table. The market time for properties over $1M goes up significantly from the lower prices homes.

At the end of the day, find a good agent who is battle tested who you can trust. Or don't, and see how it goes! 

Hope that helps,

Ben