All Forum Posts by: Chris Kreidel

I am in a similar situation. My long term goal has me not staying in So Cal. I have capital to invest/put a big down on a nice house in OC, but its not the best use of my funds.. especially if I dont plan on staying here 10+ years or more. My strategy is investing out of state in cash flowing properties (goal of apartments, and The only benefit to a sh*t cap rate here, is that I can rent a very nice place for "relatively" low cost, compared to waht a lower down payment PITI cost would be on the same house purchase. I can own an 850k house or rent a 1.35mm house for the same payment, and the owning would take 20% down.

Yes my rent is high, but not a lot higher than a place where I get a LOT less for my money. I am at a sweet spot for the rent/value curve.  SO.. for me, I have found other ways of investing my capital that makes me a lot more than my "return" would be on owning something comparable.  I think if you have other options, renting in a low cap rate area is not a horrible idea, for the savvy individual.  If you dont have better options, and you 100% will be here long term.. then go for it.  We happened to find a great house/area that works very well for us.  No, we can't make it our own, and modify too much, but it is very good for what we pay, and allows me to invest in other areas.  This strategy is certainly not for everyone, but I wouldn't put any shame to it, if you know what you are doing. 

If we ever found a unique property or the "perfect" home for us in, or even slightly above our budget, we would probably do it, but no such luck.  For how, I do out of state investments, and hard money loans.. until I find a home I want to live in that isn't a big compromise. I am maybe waiting for local prices to cool off.

As for your Washington house, its a function of what capital you could get out of it and how much rent you are getting.. what are the numbers there? If its a bit higher than what you can get locally, I would keep it and not touch it. I sold some in AZ a few years ago that I am kicking myself big time on. Mortgage paydown was starting to accelerate

@David Frost 

Probably mostly correct. However, every time I have been to Big Bear myself, has been with a group of friends, in a large cabin. But this is my sample size of 1 (or 5, if you count my other friends). But our strategy was to get a little bit higher nightly, and rent less often, as we want to use it. Not necessarily to max ROI in this case.

Anyone going to Mammoth or Tahoe from So Cal is either flying, or driving, and doing more than a 2 night stay.  Still very easy for So Cal locals to get to Big Bear. Trust me.. I wish I was closer to Mammoth or Tahoe. When we do go, its for a longer duration, given the effort/distance to get there.

@Joey Morea 

Thank you so much for that, exactly what I was looking for. Big bear does not have a good ROI for this, as far as I can tell, for the reason you mention. But the place is booming, town renovations, new restaurants, influx of corporate capital (for better or worse).

You would probably have to be in the top percentile to cashflow well with a 20% down deal, and really work for it, make it stand out, etc.   I know one neighbor of my friends cabin that makes about 1k/month positive cashflow, but he keeps the rate lower and rents to anyone.  its a typical 3 bed 2 bath roughly 1500 sq ft unit  in a good neighborhood, walking distance to town or slopes (also where mine will be).  But he never uses that one. It is not a stand-out cabin per se, but his strategy as mentioned is low rate/rent to anyone, and is established. I think he is around 180-250/night.

My unit is almost 2k sq feet, 4 bedroom, with a great back yard/deck that has a ton of trees, and hardly any view of neighbors (rare for the area).  When you are on the rear deck in the spa, you feel like the forest is yours (which is why we went for this place). I hope to average 350-400/night (factoring peak pricing), but not rent it all the time.  Some vacation rental company's analysys says I can get 425/night average with some minor tweaks, which I take with a grain of salt.  If I could cover at least half or 3/4 of my nut and still use it fairly often, I would be happy.  There are far fewer 4 beds vs 3 beds, and my un-tested strategy is to get that extra bedroom to help rent to double-families who can split the bill. 

In Big Bear, as probably with any other mountain town, the nice stuff in good locations sell instantly. The rest sits and chases prices down. Our unit needs a lot of cosmetic work, deferred maintenance and updates. But the bones and location are great.  

If you are investing across the US, my un-experienced feeling is that there are better places to get a higher ROI than Big Bear. But its awesome for those of us that live near the ocean in So Cal, and can zip up to the cabin/snow/cool summer air in 2 hours.

Thank you Michael, I appreciate the input. Will look into those devices!

Hello - we are buying a cabin in Big Bear Lake, CA, and will be renting it short term to help offset some costs.  Although we are a 2+ hour drive away, its not totally convenient to zip over there easily to take care of issues.  I have friends that also own a cabin down the street, and they are setting me up with good house keeper, handy man, etc.  We are looking to automate and utilize technology wherever possible, to make things both easier and more professional, safer and seamless for tenants.  Adding a camera system (outside only), wifi touchpad lock, wifi thermostat, etc are some of the simple solutions.  I have some experience with renting our Airstream on Outdoorsy/ all 5 star reviews so far. 

What I am curious is with 3rd party booking software to integrate booking sites, interface with service providers, etc.  I have seen Lodgify, iGMS, YourPorter, Lodgale, etc, and if creating a website for your specific property is worth while ( I could do this myself).  Are there any other gizmos or features that you have found useful or adding value to guests?

Any other tips and recommendations for a newbie are welcome, especially if you have experience with Big Bear!  

I was doing hard money loans in the past (2004-2007) and did pretty well, until  one guy who double closed on me. Was in 3rd position not second. Then he ended up going to jail for insurance fraud with his business.  Also got burned 6 figures on another non-real estate related deal. 

I am also working on the construction loan ( a better deal than what he has on the table) so I will be able to essentially ensure I get paid back. This is not finalized but in process. 

Yes there is a current loan. The current problem really wasn’t a fault of his, just a consequence of the soil.  I do also question why he cannot get an increase in existing loan. If you can recommend a lender to help facilitate, would greatly appreciate it. What would they charge typically for this service ?

Hello - I am working on getting back into real estate/investing, and I have a 6 figure short term hard money loan I want to fund for a developer who needs extra capital for some unforeseen problems with prepping the dirt for development. Lot has been subdivided for 20+ units new construction SFR, grading done. Just waiting on utilities, then vertical construction can start. I have met the principal, seen some of his other projects, walked the actual lot, etc. My first concern is protecting myself from fraud, which I have dealt with in the past.

Everything seems good, but I just want to cover all of my bases and protect myself, as I have been screwed (badly) in the past, after getting too comfortable funding deals.  

Is it normal to ask for a 3rd party escrow/title report/title insurance for a private hard money deal?  I just want to make sure I am in the right lien position with no surprises, and that I am getting concurrent recording/funding without worry. 

For those of you that lend, what are the typical questions and details you cover and obtain as part of your due diligence, in both for fraud prevention, and for analyzing the deal? 

All advice appreciated. 

I’d be interested