All Forum Posts by: Cody Charnell

Rent control is the big one. It is important to understand AB1482, which has already been mentioned in this thread. Cities will also sometimes have their own rent control laws which overlay state rent control laws. 

On the topic of earthquakes... You will find that properties built pre 1930 are often not bolted to the foundation. Some insurance companies will have issues with this. Also, some cities have seismic retrofit requirements. In LA city there are seismic retrofit requirements for 4+ unit buildings built pre 1978 with tuck under parking. 

On April 28th, 2021 President Biden announced the "American Families Plan" which proposes big changes to the tax code. These changes could include limiting the 1031 exchange, removing the step up in basis, and much more. Join us as we discuss how these changes could impact real estate investing, what still need to happen before this proposal becomes law, and steps you can take to protect your investments.

Please RSVP on Meetup.com

@Aaron Morrow

We do a ton of buyer rep and we have been able to win deals because 1)we have relationships with other agents in our market 2) because we have a reputation for spending a lot of time educating our clients and closing on deals.

At the end of the day the listing agent wants to close the deal for the seller and get paid. It’s risky to open escrow with someone that you don’t know who called you out of the blue. One one hand you could make double the commission but on the other hand that buyer might waste a bunch of time cancel escrow and potentially cost you a listing.

Join us on Saturday, April 24th, at 9am as we do a deep dive into recently closed multifamily deals in our local market. We will discuss financial analysis, the escrow process, and more! Please RSVP on Meetup.com for access to the zoom link. 

Saturday March 13, 2021 | Free Virtual Event | 9:00am – 4:00pm

Join us from the comfort of your own home on Saturday, March 13th for a full day of comprehensive up-to-the-minute educational content that will help you find success as a multifamily investor. Whether you’re new to investing and unsure where to start, or a seasoned investor with hundreds of doors, everyone will walk away with practical tools, cutting-edge strategy ideas and new relationships.

• Explore the most important topics needed to grow or being a multi-family real estate portfolio including market data, strategy, taxes, and property management while leveraging real world experience.
• Learn how SoCal’s most successful investors are making huge returns through direct ownership without becoming a full-time landlord.
• Walk away with a clear understanding of the multifamily investing model and tangible next steps on how you can jump start your 2021 investing goals. NO upsell or other commitment.

Buckingham Investments is sponsoring the entire symposium including your entry, free of charge. Come engage with us, build your network, create long term friendships and enter our investing community as we share valuable experiences that will build your expertise with some of the top minds in SoCal investing.

2020 was rough... but what effect did it have on the local real estate market? Join us on January 23rd as we analyze the effects that 2020 had on the local multifamily real estate market, what to expect in 2021, and how to set yourself up for success as a multifamily investor.

This meeting will be hosted virtually using the zoom platform. The host will be Cody Charnell, multifamily broker and investor in the Long Beach area. Please RSVP on Meetup.com for zoom details.

@Rory Coyle - Thanks! I think house hacking in Los Angeles is a great strategy. I like the markets that you mentioned, especially Long Beach because it isn't subject to LARSO. It would be great to keep in contact. I always need people to send deals to.

@Jared Bigman - Thanks Jared! 

@David Featherstone - Thanks David! Hopefully I will have some insights to share as I go through the rehab process on this property.

@Trenton Miller - I am using Borba Property Group to manage this property. They manage another triplex for me in Long Beach and they do a great job. 

@Jonathan Taylor - Thanks Jonathan. My strategy is to refinance into a conventional loan and hold this property long term. I will use FHA financing to purchase another 3-4 unit property next year. Because of the credits and my commission I actually got money back in my pocket at closing and I currently have no money invested in this deal. I set aside $100K to give the property a full rehab (I think I can get away with less). I will come close to doubling my investment on this deal (which I think is pretty good!). Also, because I am a real estate professional I can use bonus depreciation and cost segregation to save a significant amount on my 2020 federal income taxes. I am not pulling cash out of this deal with a refinance, but when you consider the tax savings I am actually keeping a lot of money in my pocket which I can use to purchase more real estate.

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $630,000
Cash invested: $100,000

Value add 3-unit property in Long Beach, CA. I purchased the property with FHA financing in October of 2020 during covid-19. There is a 3bed/1bath house in the front and a two story duplex in the back with 2bed/1bath upstairs and a 1bed/1bath + 1car garage downstairs. The property needs a full rehab ($100K est.). ARV is $800K-$825K. Once the rehab is complete I plan to refinance into conventional financing and purchase another value-add deal using FHA financing.

What made you interested in investing in this type of deal?

I like the forced appreciation and the ability to hold the property after the rehab is complete.

How did you find this deal and how did you negotiate it?

The property was listed on MLS. It was a trust sale and I was able to negotiate a $100K price reduction and a $25K credit because of the property condition and market timing with covid-19

How did you finance this deal?

I used an owner occupied FHA loan to purchase the property.

How did you add value to the deal?

Rehabbing all units and increasing rents. Replacing roofs and plumbing on both structures.

What was the outcome?

Still in progress...

Lessons learned? Challenges?

Still in progress...

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I am a real estate professional and I specialize in this property type in the Los Angeles and Orange County market.

In Los Angeles you want to pay attention to 4 major systems: Plumbing, Electrical, Roof, and Foundation. There was a building boom in Long Beach, CA in 19-teens- 1920's. These properties have been around for 100+ years, so the major systems have usually already seen failures and have often been partially or completely replaced. The things that you want to watch out for are: 
1) knob and tube electrical systems and electrical panels with glass fuses instead of breakers (most insurance companies will make you replace these or won't insure you at all).

 2) Cast iron drain lines and galvanized supply lines- these tend to corrode from the inside out. Copper supply lines and ABS drains are the best.

 3) Brick, cinderblock, or river rock foundations. Sometimes the cement used between the bricks will start to turn to dust as it gets old and foundations will need to be replaced all together. 

4) Warping/disintegrating roofing material. Most roofs last less than 30 years. Any property built in the 1920's will have had the roof replaced several times before you get to it. Property inspectors can usually give you a ballpark estimate for life left on a roof. 

You don't need to worry too much about HVAC in Los Angeles. Most older properties don't have AC and usually only have a gas wall heater. 

Often times older properties were built with redwood framing which is naturally pest resistant!  

Welcome Michael! There are several local networking groups that offer great info. I would recommend checking out Long Beach/Cerritos FIBI. Because of the covid-19 restrictions they are only doing webinars right now. Definitely still a great place to learn.