All Forum Posts by: Daniel DiChiro

I still have not engaged an attorney, but I do have a draft partnership agreement that I have been using. Here is the link: https://docs.google.com/docume...

Great feedback. Thanks again,

Thanks for the feedback, @Anastasia Gamino. Very much appreciated! How has your experience been in Hawthorne? I am getting some mixed reviews on the area. Have you had any trouble with your tenants?

Thanks for the feedback @Jake Knight. Although it might not have the best reputation currently, it seems like there might be potential in the future given its proximity to the speedway, the zoo, the new hospital, the white river... are any of those factors worth considering? Or do you still think it is a no-go?

Thanks for the input @John Rankin. Just found out the seller has accepted an offer. Market is moving fast these days!

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I am curious to know what you think...

1. I like this general area, but we all know Indy can be street-by-street. Would you buy on this block?

2. With >2,000sq-ft looks like great opportunity to add a couple bedrooms and turn this place into a 4bed, 2.5bath. What is the ballpark estimate for rehab costs? My guess was $20k, but that seems light. Anyone have a better guess?

3. ARV = $150k seems reasonable. Do you agree?

Incredible! Thank you, @Steve K. I definitely need to educate myself better on rent control laws. This could be a game changer.

Thank you all for your insight. I found this information on the following page: link

"In 1980, the Oakland City Council adopted the Rent Adjustment Program Ordinance, which uses the annual Consumer Price Index (CPI) to set maximum yearly rent increases and allows rent adjustments for claims of decreases in housing services. On February 1, 2017, Measure JJ (Renters Upgrade Act) became law, which introduced the following tenant protective measures:

• Landlords must obtain Rent Board approval before imposing a rent increase higher than the annual permitted increase.
• Protection for just cause evictions was extended to units built prior to December 31, 1995.
• Landlords or individuals assisting a landlord who endeavors to recover or recover possession of a rental unit without just cause may face a civil penalty of three times damages and attorney’s fees, including a trebling of damages for a mental and emotional injury if the landlord acted in knowing violation or reckless disregard of the rent ordinance.
• Anyone who engages in one or more of sixteen enumerated actions or omissions against a tenant in bad faith may be subject to a civil penalty of three times damages and attorney’s fees, including a trebling of damages for a mental and emotional injury if the wrongdoer acted in knowing violation or reckless disregard of the rent ordinance."

Good point @Jaron Walling. I need to do more research to understand the rent stabilization laws in California, but the way I understand it is the existing renters can maintain their existing rent price so long as they reside in the unit. I do not know how change in ownership plays into that, but I believe new rent prices could only be imposed once the existing tenants move out and new renters move in. Once that happens, rent stabilization mandates that the rent prices only increase by a nominal amount every year - this means I might end up in another similar situation a few years down the road...

As I think through this, it seems like rent stabilization can be a major disadvantage for REI. Does it exist in Indiana?

Hello BP Community,

This is an interesting scenario and I would love to hear your feedback. At first glance this 4-plex in Oakland, CA would appear to be a steal for $750,000! It is in relatively good area near downtown and is fully functional. 3 of the units are already occupied and the 4th is newly renovated, making it the perfect house hack opportunity... sounds too good to be true, right?

Well I reached out to the selling agent to understand how this seemingly fictitious deal could be real? Turns out the building is rent stabilized (no surprise for CA) and the existing renters have been in there for so long that the existing rents are well below market (~1/2). As a result, the tremendous deal analysis I originally ran with market rent values, actually turns out to be a terrible negative cash flow deal!

So what's up fellow investors? The asking price is so low it seems irresponsible to pass up on this deal, but the existing rents make it a deal breaker. Are there any other considerations to make? Have you experienced this situation and if so, what did you do?