All Forum Posts by: DG A.

hi, how have you faired in Stockton CA? 

I'm scared to jump in over there, because I don't understand what drives the economy over there. And last recession it was the hardest hit around the bay by foreclosures. 

@John Hickey

Who's your guy at Statefarm?

Hi Everyone, 

I needed to get a quote for home owners insurance for a duplex that I'm closing on. I called up Geico, because I have my auto policy with them. After we ran through the quote they told me that they had no providers that would cover my home (except 1), because it's an old victorian with no central heating. 

That one provider that does cover a home with electrical wall heaters, they refused to offer coverage because the home is too old. 

Does anyone know of an insurance provider that will offer home owners insurance on a duplex like mine?

Here's details about the duplex:

• No central heating, has wall heaters though
• Built in 1898
• Top unit 3 bed, 1 bath
• Bottom unit 2 bed, 1 bath
• 1,635 square foot building
• 3,500 square foot lot

I'm down to pitch in if I can get the  list.  Pm me if interested. 

Mike Garman www.myccrteam.com

I got an estimate from this guy today. He's quoting me on an FHA 203k loan.

are u sure about those rents? Seems high even for Rockridge.

@Wes Brand 

Roger that. I intend to move into the larger 3/1 unit. So when I move out, I can kick out the room mates, and rent the property out at market rate in 1-2 years time. Assuming tech-job growth flattens, and does not take a down turn, rent should continue it's climb. 

Also, there are a couple opportunities to expand this property. There is an existing "storage room" in the lower unit that you have to walk "outside" to get to. The entrance to that storage room is 3 feet from the back door roughly. So, I just need to enclose the entrance to that room by building a 6/7 foot long hallway, and adding a closet in the storage room (it has a window). That lower unit can become a 3/1. Part of the upstairs unit over-hangs an empty space in the back. I can potentially build a studio or a 1/1 in that space to turn the duplex into a triplex. 

Lastly there's enough room for an "in-law" unit to get built in the backyard. I can probably drop a pre-fab in there and get all the way up to a 4-plex. The property is zoned RM-2, I should be able to expand it up to a 4-plex with that zoning right?

These are the expansion opportunities. I gotta figure out how to get the money to build that stuff though. 

@Thomas S.

No, I don't have a sizable reserve right now. But, I do plan to move in and get room mates. So, I should be able to carry a loss for the first few years. Also, the house should appreciate, and I should be able to remove PMI from my loan ($468/month).

I make a pretty good income, and I have access to credit in a major emergency. 

Right now appreciation in Oakland CA is pinned at about 7% per year for the next 2 years: http://www.bizjournals.com/sanfrancisco/blog/real-...

If that holds true, I should be able to roll out of PMI in 2 years, as I am getting the property at a small discount. I believe it will appraise for ~9% more than my offer.

Yeah, that totally makes sense for while I live there. 

My math on living there has 10% built in for vacancy and repairs (5% each).  Actually I expect I only have to pay utilities and -$793.97 of the mortgage while I live there.

The point of keeping PM in there is so that when I move out, I have considered the amount of cashflow I need to have, so that I can hand over the management to a PM.

Hi Guys, 

I'm about to go into contract on a property, and want a second pair of eyes on this deal:

The property is a duplex in Oakland CA in the San Antonio park Neighborhood in the 94606 zip code. One unit is a 3/1 the other unit is a 2/1.

I offered $546,000 with a 10K credit from the selller. My total loan amount is 536,110. 

I'm using an FHA loan, and the mortgage breakdown looks like this:

I'm estimating $2,000 in rent from the 2/1 unit and I would live in the 3/1 unit with 2 rooms mates. Room mates would pay $800/month each. So total income when I live in it is 3600. 

Other expenses look like this:

I would have the tenants pay Electric and Gas. I would pay water and trash. 

I would also plan to move out in 1-2 years. When I move out, I'm projecting being able to get $3,000 a month for a 3 bedroom unit. 

Another opportunity I have, because of how the property is laid out, is to convert a storage room into a studio or 1 bedroom unit. And I can get extra income from that. 

-Danny