All Forum Posts by: Brendon K.

Love the click tracker you put into the link 😉

The insurance should be contracted between the owner and the insurance company, not between the house and the company. If the previous owner does not transfer the policy to you, I don't believe they are liable for your home.

Almost all reputable property management firms have strong indemnification and hold harmless clauses as part of their management agreement. If the management company is properly listed as Additional Insured, the coverage will automatically be extended to both parties as needed.

I hope you're enjoying this heat wave along with the sunny days! 😅

There are so many "it depends" answers to your questions! I have a couple of investments in LA that I got at a discount (that ended up being a much higher discount after appreciation), and since I love getting my hands dirty, I usually put in a lot of sweat equity for anything I buy. However, at least in the clients I typically deal with, a lot of people are feeling a financial crunch right now and the sellers are generally trying to get way more than a property is worth, making negotiations difficult. Don't let that get you down, though. All you have to do is make a compelling point for them, and having a broken property that they don't want to fix can be a reasonable one.

Anyway, allow me to give you a couple of points to think about.

Downtown LA has been suffering because of the working-from-home shift and the effects of the homeless. I'm telling my commercial clients to stay well away from downtown if they're going for large residential because there's a good chance everything there will continue to reduce. It's getting pretty hard for us to fill those apartments up for them anymore. Avoid the downtown area, but most suburbs are up for grabs.

(I'm sure you know as ex-mortgage, but I'm putting it out here anyway for others) First, make sure you have your pre-approval for any financing you'll need before you even start your pursuit. We usually don't work with those who haven't done that yet. It's definitely a prereq.  If you're working with an agent, be super clear about the difference between your maximum and your ideal property cost and what those levels mean for you and it'll get you started on the right foot.

It sounds like you have a decent idea of what kind of property you want to buy (a 4-plex). I would suggest you start talking to non-resident owners in areas within your price point. I would do a quick look on Zillow (MLS in my case) and find past sales to get a rough graphical idea of where those properties are, and then I would actually walk the streets. I do this anyway because I've been doing a lot of door-knocking to find new clients, and it's pretty interesting to see what kinds of gems pop up when you aren't just looking at a Google map. Find some that look interesting, write them down, find the contact information using a tool online. A lot of people like ListSource but it depends on what you're doing and there are a lot of alternatives, just search around.

Once you get hold of the owner, ask what their situation is. If they're set for life, cool, leave them be and keep looking. However, if you can manage to find the very few who either don't want to be an investment owner or would prefer to upgrade their capital into something more profitable for their stage of life, launch on it. You'll want to run some comps to be very aware of the pricing in the area and then it will help to have some construction costs in mind. LA can be super expensive if you're getting construction done for you, but it can also be super cheap if you play your hand right. Once you get a good number in mind, plus costs for repairs, plus a rough perspective of appreciation in the area (because BRRRR doesn't really work until you factor that in here), you can technically make an offer yourself. However, these situations can be complicated, and it's to your benefit to have a realtor on your side (if you don't already) to help you negotiate and stay within the law.

Your post was pretty general, which I appreciate, but I don't know if I handled all of the concerns someone in your shoes would have. Feel free to ask specific questions!

It doesn't matter to you now, but I'll be starting one based on a highly successful model in a few months. Keep your eyes open!

To add to the great suggestions, if you're finding the L.A. market souring and you have any equity in those investments you've already established, it may be in your best interest to liquidate at some point to move your capital to a more profitable location or another type of investment. For example, commercial residential areas outside of downtown are doing well right now (at least in my experience).

I find that stadiums can be money-makers, depending on the area. You'll always find die-hard fans who pay good money to be close to their passion. If I were to sell the property, I would position it as a short-term-rental money-maker. Decorate it tastefully with team-specific memorabilia. If you look around, some teams will buy out blocks of SRTs for team use. I agree with upgrading the soundproofing. I've helped a few clients with similar problems in my area.

I live in an area that has houses that cost several degrees higher than my personal budget for investing. They say that you can start wholesaling anywhere in the world, I'd like to see if I can test that. Everyone I've seen says "I buy houses" and they "buy" with an assignment contract, but my worst fear is if I start doing that and I still don't get a buyer, I'm going to be stuck with that house that's too expensive for me at my current stage of life.

Are there clauses you can put in to wholesaling contracts that allow you an exit if you can't find a buyer? Does anyone have an example I can look at?

One option you might not have considered is hard money (personal money) lenders. There are plenty of people who recommend not using your own money at all if at all possible and just using hard money instead. It can make a lot of sense, especially if you want a second pair of eyes on any deal you are looking at.

While you don't want a ton of vacancy, you do want to be charging somewhere in the rough vicinity of market rents and you'll have to judge that for yourself. Personally I wouldn't be going less than say, 10% of the mean market rent rates. There's flexibility but when it comes down to it, it's my future. Also, I tend to rely on other factors that keep vacancies low. Section 8, for example. Or people looking to settle down with a family, that kind of thing.

Another thing I've heard on the podcast is, "I can guarantee we won't increase rent if you let me inspect it every six months".