All Forum Posts by: William Yeh

To be more specific, I have an early 90s home in Fairfield with standard builder grade materials throughout for that era (solid oak cabinets, linoleum floors, gold accent hardware in bathrooms, tile counters, etc.) My thoughts on best bang for the buck on the interior are paint (standard light khaki color), granite counters in kitchen/bathrooms, tile floors in kitchen/bathrooms, new hardware in kitchens/bathrooms, new doorknobs throughout.

The home is 3000+ sq ft so I'm debating on whether it's worth it to upgrade the windows and do some of the larger cap ex items which are nice to haves but are perhaps afterthoughts in terms of selling the home. Obviously I'll be fixing anything that flat out doesn't work (hvac, furnace, water heater, etc). Any feedback on the items I've listed?

To be more specific, I have an early 90s home in Northern California with standard builder grade materials throughout for that era (solid oak cabinets, linoleum floors, gold accent hardware in bathrooms, tile counters, etc.) My thoughts on best bang for the buck on the interior are paint (standard light khaki color), granite counters in kitchen/bathrooms, tile floors in kitchen/bathrooms, new hardware in kitchens/bathrooms, new doorknobs throughout.

The home is 3000+ sq ft so I'm debating on whether it's worth it to upgrade the windows and do some of the larger cap ex items which are nice to haves but are perhaps afterthoughts in terms of selling the home. Any feedback on the items I've listed?

Hey BP,

Curious if anyone out there can chime in on what specific projects within a rehab produce the best ROI. Obviously this assumes that there aren't major infrastructure items to be addressed (ie. functioning roof, furnace, hvac, electrical, plumbing etc), but the projects that come to mine for me are painting the interior, granite counters, flooring, and prefab bathroom vanities.

Anyone have their list or case studies that they care to share?

Hey BP,

Curious if anyone out there can chime in on what specific projects within a rehab produce the best ROI. Obviously this assumes that there aren't major infrastructure items to be addressed (ie. functioning roof, furnace, hvac, electrical, plumbing etc), but the projects that come to mine for me are painting the interior, granite counters, flooring, and prefab bathroom vanities.

Anyone have their list or case studies that they care to share?

@J. Martin I agree with your take on Vallejo. The ferry is in a downward spiral of fare increases and decreasing ridership. I also don't see any signs of momentum shifting towards development in the waterfront area. Fire and Police unions and their lofty compensation packages are ruining the city budget which prevents the city from cleaning up the streets in areas that might otherwise be interesting to develop. 

As for housing prices, Vallejo definitely been more volatile than other parts of Solano County per the reasons you mentioned. That said, I haven't seen rents increase by much on my rental.

Fairfield is a different story. While price swings from the crash to the recovery were violent, they were relatively more stable vs. Vallejo and rents have gone up significantly in certain parts of town. My group has about 25 rentals throughout Solano County so we have a good gauge on which areas are performing and which have remained flat.

I'd echo @Joel Owens sentiments. Since you are finding the deals, you have a good deal of control over what happens to the deals you find don't you? If you have cash on top, it shouldn't be unreasonable to negotiate yourself into the deal as an equity partner and the member in charge of acquisitions and lease up or exit.

I have properties and have helped investors buy in Vallejo and have looked at Sacramento. As has been mentioned, there are sketchy parts of Vallejo no doubt but there are also nicer parts (Glen Cove, Northeast above the Costco plaza, Hiddenbrooke). I have a primary turned rental in Glen Cove and it went from about $600k at the peak down to $190k at the bottom (tear) and now is back up to about $400k. Rents have gone up in Solano County considerably in the last year. If you're considering Vallejo, I'd also recommend considering Fairfield and Vacaville.

In Sac, you have the new Kings Arena and a ton of development dollars going into downtown. In my opinion, that could be a game changer for residential in the downtown and peripheral areas but the fortunes of Sac real estate in general will always be underpinned by government jobs.

As for which market has more cash flow vs appreciation potential, it's highly neighborhood specific.

With nonconforming additions, I always advise my clients that the danger lies in whether or not the addition was built to code. By purchasing such an addition, you have no 3rd party guarantees (building inspector sign offs) that the property was built to current code, whether for electrical, structural, or plumbing. That represents a potential liability especially if you're planning on renting the unit out.

Say you acquire a property with a nonconforming unit and rent the unit out and an electrical fire starts. On inspection the insurance adjuster finds the building was neither permitted nor built to code. I'll give you one guess as to who'll end up holding the bag at the end of that one.

Having such a clause is certainly better than nothing but if you close and someone gets lead poisoning, they can still take you to court and cost you big $$$ in lawyer fees, even if you're fully protected by the clause. I like to avoid litigation before it happens.

If you're in love with this property, I would suggest making the sale conditional upon having the lead paint dealt with and certified by whatever 3rd party can certify such a thing prior to close of escrow.

Trust is good. Control is better.

This deal stinks to high hell. I hope you're getting it at an insane discount from fair market because there are more red flags on this deal than on any deal that I have ever seen.

I can't endorse enough @Roy N. 's original post. In all of the multitenant deals I've been a part of, the seller providing that level of due diligence once in escrow is par for the course.

At this point, anything that is likely to be wrong with the property probably is, hence the total lack of transparency. You've already identified multiple sources of potential litigation, lost rents and heartburn which could be flung on your doorstep like a flaming bag of poo on day one. Stay sharp on this one if you decide to proceed.

By the way can you elaborate on your decision to use an attorney as opposed to an agent?