All Forum Posts by: Chris John

@Bruce Woodruff

I don't know anything about STR (I'm trying to learn). We have some LTR in California that seem like they'd be great to put ADUs on. However, every time I start to run the numbers on the ADU, I keep coming back to wondering if I wouldn't be better off just using that money and leveraging into another property. It sounds like I can spend 100k and get a 100k ADU or I can spend 100k and get a 400k property.

Obviously, I don't know your risk tolerances in terms of leveraging.  Also, I don't know if I can use leverage to build ADUs (I think using 100k and leverage to buy 4 ADUs on different properties would probably be the best option as a guess).  Checking into that type of financing is on my "To Do" list.  Just a thought...

I give a lot of credit to where I'm at financially today to Kiyosaki, but I've definitely not heard much from him in a decade or so (I realize it's me and he's still out there).

Having said all of this, I did listen to his recent biggerpockets podcast (500, I believe) and it was confirmation bias to the hilt for me.  I was a little late to the covid purchasing frenzy, but it finally occurred to me that the move (at least as of 6 months ago or so) was to borrow as much money as you can at fixed rates.  I'm on the conservative side, so I only purchase properties that I expect to easily pay for themselves, but I bought everything I could.  I wish I had been able to buy more...

@Joel Yahner

I agree with you in that it doesn't look like the market is ever going to slow down.  Crazy times!  I am a little worried that interest rates will creep up.  If that happens, it should definitely hurt housing prices.  Who knows though?  If there's enough inflation, things might offset.

Regardless, I just like the comfort of knowing that a property can pay for itself.  There's always a fence to repair, plumbing to do, trees that need trimming, etc.  I just like to be able to have the property pay for those instead of having to come out of pocket every time something goes wrong.  Just a personal preference as I realize that people have definitely made money on appreciation only.

We've just been picking up properties in the Jax area that my property manager is comfortable managing and that pencil out.  Nothing amazing, but I'm not putting tons of effort into wholesaling or anything.  I have my normal 9 to 5, so I just try to find things that make money after expenses and buy and hold.  Pretty vanilla, but over time, has been fairly lucrative.

Feel free to pm me if you want any referrals or anything.

Best wishes.

@Joel Yahner

I'm a little further down in the valley (Stockton/Modesto area), so I don't have great insight into the Sac market. I will say that down here it'd probably be difficult to find a deal that pays for itself off of MLS with only 10-15% down (assuming you can find that).

Obviously, many are hoping for appreciation and aren't concerned about cash flow these days, but my personal comfort level is to only purchase deals that pay for themselves without having to come out of pocket as I'm only a high school teacher.  Anyway, we've been buying in Florida recently for that reason. 

Sorry I can't be of more help for your specific situation though.  I only know that my current lender wouldn't do a deal with that amount down unless it was an owner occ or maybe a 2nd home.  For that reason, I'm guessing you'd have to pay a higher rate to compensate.

Good luck!

I live in California, so I'm pretty sure this is completely legal (or at least wouldn't be prosecuted) in much of the state.

@Jonny Mcknight

As they say, pics or it didn't happen.  haha.  I, for one, can't wait for your final update as I'm dying to see the house (and deal) in question.  Good luck.

@Eric Bilderback

haha.  It's good to know that I'm not the only pessimist in the room!  Misery, does indeed, love company.  I'll be curious to see how things resolve themselves with this kerfuffle that we find ourselves in.  I hope you're (we're) wrong, but my money is certainly betting against that.  I'm borrowing as much money as I can and assuming that inflation will make me look like a genius in 5-10 years.  We shall see.

@Eric Bilderback

Well, assuming the free market is allowed to work (which is a big "if" these days, imo), a lot of these issues should resolve themselves.  Incomes will rise to help offset inflation, competition will drive prices up to levels that make investors pull their money and head for greener pastures, migration to cheaper markets should occur to balance out the disparities, etc.

There seem to be a lot of hands on a lot of levers these days though, so who knows if any of this will actually transpire.

@Alex Silang

That's a great question.  I love Dale Carnegie's negotiating advice in "How to Win Friends and Influence People."  It's an old book, but I believe the information is timeless.  I'm not always comfortable negotiating, but I've used his strategy of being complimentary and honest several times and have been very pleased with the results.  I'd encourage you to look into it.

Best wishes

@Karen Margrave

I think we agree on a lot of points, but if the government wants to subsidize these people (which it apparently does) they should probably put them on a bus to greener pastures.  I keep hearing about how people in California are homeless because rents are too high.  That is ridiculous.  People are homeless in California because there aren't enough properties to house them, which is driving the prices up.  It's not a chicken or egg argument, there's clear cause and effect here.

Allowing them to pitch tents on sidewalks, park wherever they'd like and live there, or live under overpasses isn't compassionate or effective (I realize you're talking about a different subset of homeless, but let's be honest.  There's a lot fewer of the homeless that you speak of and they won't be endemically homeless either).  California either needs to allow builders to increase supply (maybe without such onerous building fees and permits) to meet demand or, again, give these people a bus ticket to some of the cities that have declining populations and vacant properties.

I don't squat in Beverly Hills because I'd like to live there, but can't afford to.  I just live somewhere else.