All Forum Posts by: Collin Chan

@Michael - I looked at Modular ADUs for awhile though might do a custom build instead.  However, there are some modular companies out there that offer financing and payments so if you can generate good rent that covers the payments and expenses then it might be an option.  Be aware though that there are many modular companies and some are more expensive than design/build custom ADUs.

I would also agree with with Andrew, a conversion of an existing space (like a garage) might be the cheapest.

Also, check with your city laws on what's an allowable ADU to construct based on your current home and rental regulations for them.

Collin

@Diana for your first wholesale deal, maybe try to find an experience flipper/rehabber here on bigger pockets in your area to work with and figure out a wholesale fee that would be appropriate for you and they can help you through analyzing the property construction costs, doing the construction, and overall project so you get paid to learn a lot about the business first hand. :)

@Rachel Sounds great!  We belong to Beringer and Sterling so free tastings there for I'm sure with you guys being locals have other options.  Feel free to message me.

I haven't heard about the summit but I'll look around for more info.  Thanks

I don't currently have a virtual assistant and really they seem to be used to do more administrative tasks but the podcast often talk about them also being able to take calls at all hours (some of them are in other countries where labor is cheaper).  Part of your team would be to have a handyman you trust to do the annual walkthroughs to check everything and perform maintenance as needed.

Hi Blake,

We currently manage our few properties as they are nearby and we have been lucky (due diligence) to find good renters.  Property management isn't full time for most people which is why they use Property management companies that charge typically 5-10% based of the rent on the unit (condo vs home, etc.).  This could be an easier and cheaper solution than hiring someone full time.

If you are just looking for someone to answer the phone and contact your list of contractors, I'd suggest looking into the "virtual assistants" that are featured heavily on Bigger Pockets podcasts as this seems to be a very cost effective way to manage the day to day without putting in much money.  There are also some software and Apps that do a lot to automate the management aspect as you continue to scale.

Collin

To you original question, yes it could be considered a liability but one that appreciates over time vs other liabilities that depreciate.  If you had invested in the bay area even 5 years ago in some areas, you would have made a lot of money still and not missed out on the appreciation.  I've seen rents go up significantly recently in the bay area so in some cases it would have been better to buy vs having to had increasing rents.  With new laws for renters, maybe that'll be different.

Rents have gone up but i've had friends who's landlords have been nice and not increased their rents much because they are good tenants (maybe difficult to find and landlord like that).  We have been pretty good with one of our tenants not increasing their rent much over the past 7 years since they always pay rent on time and never have issues.  If you have this situation, then I would say invest in more assets. 

My neighbor bought their house and rented it out right away which actually covered PITI completely. They didn't move in until a couple years because it was just 2 of them and they didn't need a 5 bedroom house until they would have a family so they lived in a small condo. Later when they moved in they still rented out the in law suite for $1500 a month which covered a big chunk of the mortgage. So they had a lower price point, lower mortgage/property tax and all that before moving in 2 years later when it had appreciated 30%. They did well to buy their future property as a rental.

I think everyone is different in terms of wanting to own their home or rent and invest.  It could go well either way and their are successful people here that have bought their own homes before renting out and others who have rented and invested wisely.  I've seen plenty of people rent and buy fancy cars and DJing equipment so it really comes down to mindset.

Depending on your market, it might also depend on how your market projects to do over the near and long term. It depends on your goals and their are reasons to go with either SFH or Multi-Family. How hands on do you want to be with investing in real estate? Do you want to manage and deal with tenants directly or outsource it to a property manager?

Cashflow tends to work better on multi-families and out of state is probably the way to go for that.  However, my uncle's advice to me was to buy my own home so that I can learn how to do all the rehabbing work my self.  I've done kitchen remodels, bathrooms, flooring, removed acoustic ceilings, built and arbor, plumbing, .... This has been great to really understand the costs contractors want to charge on some of our rental properties where I don't have time to fix the issues.

My advice for most younger people is to house hack where you buy a SFH or duplex to live in, and rent the other rooms or unit out. My friend out of college did this with a 4bd/2ba house renting out 3 rooms to his friends and it covered most of the mortgage. This is good especially since you will still need a place to live in LA. If you can house had and rehab, even better.

@Tyler - Sounds great.  Let me know or if you have a meetup, I can sign up for your local one as well.  Oakland (depending on what part) is less than 30 mins away.  

Thanks Brian!

@Tony - Aside from out BRRRR in Napa Valley, we are primarily looking out of state. I've already started talking to people in Arizona and Florida as primary locations.

@Mike - We bought up in St Helena. Currently we have a contractor just going through architectural drawings and working on septic infrastructure. 

@Ryan - yup saw all the restrictions around short term rental. The house we bought was on VRBO and Airbnb as a monthly rental so at least that part we are somewhat ready for although it would be great to be able to get a licence. Let's trade notes on the ADU. We can meet up at a winery one weekend.