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All Forum Posts by: Ray Ngo

Ray Ngo has started 5 posts and replied 9 times.

Post: Where to look for a commercial/ residential property?

Ray NgoPosted
  • New to Real Estate
  • Pomona, CA
  • Posts 9
  • Votes 1

Hi BP community, 

Our family has been leasing a small space in Southern California since mid 2018 for our e-commerce retail business (selling heavy machineries to  end users nationwide). We have been saving up over the years in hope to buy a property in Southern California (East LA, Inland Empire, San Diego, ...) where we can both reside and conduct business in our backyard/ front yard. For the residential space, we are not necessarily tied up to a A neighborhood with good schools. A decent 4-bed, 3-bath property in a B-grade neighborhood would work out great for us. But the tough part is that we don't know where to look online to verify that the county/ city would permit us to conduct business. Does it have to be zoned commercial plus residential for us to both reside and operate or business? Do we call the city's planning commission to confirm? Does county/ city typically change zoning out of the blue, and they can literally force us out of business by re-zoning the land to residential only in the future? I would really, really appreciate any online resources/ books/ podcasts on this topic! 

A little background of our business. We typically need 3,500 - 4,000 sqft of open space (no need for a roof as long as we stay in SoCal) in the backyard to take photographs, store, and service our machineries (small, compact 5,000 to 12,000 lbs weight excavators). Also, to move our machines from the front yard to backyard, the door entry must be at least 7-foot wide. We receive a container (40-foot in length, 8.5-foot high, and 8-foot wide) every 5 weeks from overseas, and we partner with a drayage company to deliver this container to our property via a semi tractor trailer (so the road must allow access for these types of trucks). We ship out these machines to our customers via LTL trucking (most of them are 3/4 to 1 ton pick up trucks with 35-foot gooseneck trailers). 

Please let me know your thoughts/ comments if anyone has any experiences on this topic. Much appreciated! 

Post: Due diligence and data to run buy and hold analysis

Ray NgoPosted
  • New to Real Estate
  • Pomona, CA
  • Posts 9
  • Votes 1

BiggerPockets community, when I come across a MLS alert email from a RE agent, I have a hard time finding the following numbers, which are absolutely essential to run my cashflow and ROI analysis in a buy and hold scenario. Please let me know what are your quick (but in the ball park) and most accurate (but slow) ways to find these numbers.

Rental income: I learned to trust MLS listing agent "ACTUAL RENT" if this is available on the MLS listing. However, if the property is a SFR or condo (instead of a MFR or residential income properties), the actual rent per unit is not even available. I find myself texting/calling the RE agents to find out, which is annoyingly slow in the process of analyzing if a deal makes sense or not. Another way is Rentometer as I heard from David Greene. This is a subscription though, and I don't mind paying, but would you use Rentometer as a quick (and in the ball park) estimate for rental income?

Property tax: Another mystery to me. Either the information is available on MLS/Realtor.com as an estimate or not available at all. It is calculated by assessed value times mil levy (tax rate). But isn't it also true that assessed value reset to purchase price? If so, how exactly do people calculate annual and monthly tax for a property they come across on MLS/Realtor.com? I heard NETRonline is a good resource, but this is public record that shows past annual taxes and not the actual tax when the property is bought at a different price.

Home insurance: Realtor.com does provide this information, but I do not really understand the rationale behind the estimate. Home insurance is a function of coverage amount, not home price, so what service/calculator/website do you guys use to quickly estimate this number? 

PMI: Realtor.com does provide this number as well. Some use PMI = 0.01*Loan Amount / 12 is the monthly PMI. Is there a universal/rule of thumb to help estimate this? Or maybe an article that explains this in further details would be great.

OPEX: Do you always utilities are paid by tenants for a property you are analyzing? I always assume electricity, gas, water, sewage, trash, snow/lawn care, and wifi to be paid by tenant (except HOA).

OPEX indirect: What are your rule of thumbs for vacancy, prop management, repairs, and Capex? I assume 5%, 10%, 5%, and 5% to be very conservative. Are these numbers subject to change depending on locations/markets? If so, what do these numbers look like for Inland Empire / Pomona, CA (if anyone lives in this are?)

Interest Rate: I'm trying to use conventional loan with 5% down (30 years term) as my goal to purchase my first property. However, interest rate and loan point/ origination fee is based on my income, FICO, and reserve. Should I talk to a lender to figure out my interest rate and then use this number to analyze deals? Or should I just use 5.5% annual interest rate?

THANK YOU BP !!

Post: Please help me analyze this my first property :)

Ray NgoPosted
  • New to Real Estate
  • Pomona, CA
  • Posts 9
  • Votes 1

Thank you alot guys. I appreciate everyone's comments on this analysis. 

Post: Self-Directed Solo 401k for Real Estate Investors – Q&A

Ray NgoPosted
  • New to Real Estate
  • Pomona, CA
  • Posts 9
  • Votes 1

@Brian Eastman @Matt Nusbaum Thank you guys!! I’mma sign up for the plan for the matching then. I have an idea when to rollover my 401k to a solo now. 

Post: Self-Directed Solo 401k for Real Estate Investors – Q&A

Ray NgoPosted
  • New to Real Estate
  • Pomona, CA
  • Posts 9
  • Votes 1

@Brian Eastman Thanks for th prompt response Brian. So self directed solo plans are available for fulltime RE investors only? Or everytime I change job? 

Post: Self-Directed Solo 401k for Real Estate Investors – Q&A

Ray NgoPosted
  • New to Real Estate
  • Pomona, CA
  • Posts 9
  • Votes 1

This is a great discussion. Im 24 and my employer is offering 100% on 3% limit of my annual salary. I bring in 70k a year so that should be $2,100 in contribution and $2,100 in matching for a total of $4,200 per year. However I have never been a big fan of 401k so I never signed up for it since August of 2017 due to 4 year vesting period and 10% penalty. Would you recommend doing this and transfer my fund to solo for my RE downpayment? I plan to stay at my job for the long run and buying my first property in 2019. Thanks.

Post: Please help me analyze this my first property :)

Ray NgoPosted
  • New to Real Estate
  • Pomona, CA
  • Posts 9
  • Votes 1

Hello BP community, after hours of education via books, podcasts, and meeting with local investors, I have built my own cashflow spreadsheet and attempted to analyze a random local property on Realtor.com to practice my analysis skills. Please let me know if you guys can find any fatal errors or deficiencies in my analysis. BIG THANK in advance! 

Realtor Link: Link to Realtor.com

Property Address: 996 E 4th St, Pomona, CA 91766 (East of Los Angeles) 

Property type: MFR (fourplex) with 2/1, 2/1, 1/1 and 1/1 (built 1938)

Property size: 2,536 sqft (living) and 6,008 (lot) 

Listed Price: $799,000.00 ($315/sqft) on market for 41 days 

Actual Rents: $4,270.00 ($1,270 + $900 + $1,050 + $1,050) to section 8 tenants 

Assumptions: 

- Strategy: House hacking. But I'd like to run the numbers in the scenario as I move out after 2 years living there to check the cashflow

- Financing: owner occupied conventional loan 

- Downpayment: 5% 

- Interest rate: 4% 

- Loan period: 30 years (fixed) 

- Vacancy of 5%, Repairs of 5%, Capex of 5%, and PM of 10%

- I assume I can get 10% discount based on how long it's been on the market (purchase price of $719,100) 

- I used Realtor.com from the link and based on purchase price of $719,100 it gives me prop tax of $749

- I relied on the listing agent data of $92 per month for home insurance 

- I relied on the listing agent data of $112.50 per month for water, $112.50 for sewage, $95 for garbage, and $60 for lawn care (assuming the tenants pay for their own electricity and gas) 

- I left PMI to be 0 since I do not know how to calculate this

Result: 

Based on assumptions and MLS listing, this property cashflow -$1,280.00 (aka, a horrible investment). Rent rate of 0.59% (far below 1% rule), and OPEX of 44.7% (pretty close to Brandon Turner 50% rule).

Questions: 

1. When screening properties, what is the quickest way to estimate PMI for low downpayment (5-10%)?

2. Do you guys rely on Realtor.com to estimate annual prop. tax based on purchase price? 

3. Do you guys use selling agent Pro Forma rent ($5,000) or actual rent ($4,270) to run the numbers? I do not know why one of 2/1 unit has rent for $1,270 while the other is only $900. 

4. Do you aim for $100 per door or $400 (for this fourplex specifically) of cashflow as a minimum before you even bother to look at the property in person? 

5. Do you trust and use the listing agent data on home insurance of $92 a month for your calculation? 

6. Did I miss anything important or critical that made my analysis inadequate? 

Thanks guys!

Excel:

Post: Any “house hackers” in the Pomona area?

Ray NgoPosted
  • New to Real Estate
  • Pomona, CA
  • Posts 9
  • Votes 1
Hello, I currently live in Irvine, CA and planning to move to Pomona (near Cal Poly) soon this year for work. Please let me know if anyone currently a house hacker (via MFR or vacation rental) in the city of Pomona, Walnut, Chino, Clairmont, Covina, West Covina, San Dimas, La Verne, ...?

Post: Wholesaling on F1 Visa

Ray NgoPosted
  • New to Real Estate
  • Pomona, CA
  • Posts 9
  • Votes 1

Can international students on F1 Visa do RE wholesale (or investing in real estate in general) legally? 

This has been my curiosity for months. 

Thank you, BiggerPockets!