All Forum Posts by: DG A.

I have a question for you appraisers out there. I'm working on putting together a deal where I build a new single family home and sell it.

Right now, it seems very cost effective and profitable to do this using a pre-fabricated home... where the materials are cut in a factory, then shipped to the job site, and the home is stick-built on site.

Is there any difference in the appraised value of these pre-fabricated/pre-engineered homes?

If there is a difference, what % up or down is it from a traditionally built new home (generally)?

This would be a one-off spec build on a vacant lot between other existing homes in Richmond CA or Oakland CA. Not a tract development or anything like that.

Hey @Jared Saunders thanks for posting! This is a great success story!

AB1506 was removed from the ballot thanks to lobbying by property owner associations around the state. 

It's possible it gets back I  the ballot in 2018, but we're good for now. ;)

hey Brian,.

2 trouble spots.  

1. The law says 1 property divided into a maximum of 3 units.  So a fourplex, which is 1 property divided into 4 units is not exempt. Since it's not exempt,  it is subject to rent control. 

2. You can't charge section 8 what ever you want.  They have an amount they're willing to pay.  And you as the landlord can take it or leave it. So,  you can't raise the rent on them 10% every year. 

Hey @Ori Skloot - that's an awesome deal. And @Chris Mason is the man!

Where was the property located? Would you be able to give cross streets?

I'm a fan of moderate rent control. 

I think if Oakland and San Francisco were a totally free market, there would be no one earning below ~$125,000/year living here. And that would mean, minorities (due to their income) would often not have the opportunity to live in and work in areas with a lot of job opportunities like the Bay Area. 

 I just made the transition from renter to owner, and if Oakland were a free market my rent would have jumped up by $1100/month in just one year.

As long as there's a time where the rent can reset to market rate, I think rent control actually drives property appreciation faster than it otherwise would.

The trick as an investor is to know the laws, and use the tools at your disposal to get your rents up over time. Tools like:

• Cash for keys
• Capital improvement cost pass thru
• owner-occupying small multifamilies
• buying properties with banked rent increases
• converting 2 small units into one big one
• rent control exemptions 

The funny thing is, at the end of the day... rent control combined with NIMBY's against real estate development wind up reducing housing supply, and increasing market rate rents. 

That means when someone finally dies or moves in a rent controlled real estate market, the demand for housing by high income people drives up the market rate rent of a newly available unit. The people rent control is meant to make housing affordable for are priced out in that scenario. At least in California with the current Costa Hawkins laws. If rent control gets even more restrictive... like there's no market rate reset when someone moves out, then it will be REALLY hard for investors to ever be able to buy or sell their real estate. Who wants to buy a $700,000 property with a total $2,500 in rents, and no ability to raise rents to cover the mortgage?

@Ben Rice

It turns out I moved into a completely different duplex. Everything seems to have worked out. @Conor Hesch is the man! 

Hey Alex, sure pm me.

Hey @Dylan Grabowski

It took me 9 months to find and close my deal. I started in  December of 2015, and closed in late August of 2016. I got my butt kicked in negotiation by my realtor. 

I actually asked the listing agent to represent me. She succeeded in moving me from $50K below list price to $15K below list price. And in the process of getting that concession of $15K on the list price, I had to take on the whole expense of the sewer later. I accepted the cost of the sewer lateral, but I bumped up my loan amount and rolled all of the closing costs aside from the down payment and sewer lateral into the loan.

For about 8 months I kept getting out bid by other people. My solution was 2 things:

1. Get a non FHA loan, because listing agents way more willing to entertain non-FHA loans.

2. Asking the listing agent to represent me. It's interesting how quickly your offer floats to the top of the pile when the agent stands to earn a double commission. I make sure that the agent would in fact get a double commission, and I don't offer on the property if the listing agent tries to connect me with another agent in their office.