All Forum Posts by: Dave Zarcone

Hi Jacob,

Old thread but I'm curious... did you avoid buying a home in PS on leased land for a STR? There are some nice properties in PS but not owning the land seems to be a disqualifier or maybe it is a red flag for others but a sneaky way to get a good property. Look forward to your answer. Thanks.

@Ben Joseph

Yes, there are plenty of restrictions in Palm Springs. I often see units on AirBnb with a 2 night minimum and they're almost booked solid... Pretty clear they are operating without a permit... Who knows how long until they get busted.

I use a combination of 4 night and 5 night minimum depending on how far out the reservation is.

Yes, you can only benefit from one STR property in PS. Meaning, you can't be on the deed to multiple houses with STR permits. Only one STR per owner. We even thought about buying two homes with one in my name and one in my wife's name but that doesn't work in California. So we're looking elsewhere

Hi all, thought I'd chime in since I love this thread. I sat on the sidelines for years analyzing properties all over while never finding the "right" deal. Looking back, many of those properties would have been great investments in one way or another and I'd be much further along in my RE portfolio if I just took action. But last year I finally pulled the trigger on a house in PS to rent as a STR.

A few others mentioned, but with STR properties I could easily have paid well over asking and this property would still cash flow. Obviously, each market is different, but the desert is a huge tourist destination.

Now I'm looking for a second. Either another in the desert or up in Big Bear. Do any of you experts in these locations have recommendations for a good desert city other than PS, or neighborhoods in Big Bear that are highly sought after on AirBnb/Vrbo/etc. and aren't already dense with STR competition?

Desert cities have lots of restrictions, moratoriums on new permits, or straight out bans in them altogether... 

And I've toured so many BB/Arrowhead homes, scoured AirBnb properties online to see their calendar's occupancy (and it looks like most primarily rent on weekends, while my PS property rents every day of the week). So I'm not as confident about BB and seeking expert advice from you all!

Thanks all!

Hey James,

Very motivational story. Especially since it hits so close to home. My wife and I flipped a home in late 2017 and decided that REI was the right path for us. Unfortunately, analysis paralysis is real, and we've primarily been looking in the Inland Empire instead of out of state. We have plenty of capital ready for starting our journey but just need that nudge, or the right partners, to move forward. I'd love to chat more about your story or start a conversation about future investments if you're looking for additional local partners or investors.

Let me know your thoughts. Once again, stories like yours help the little guys stay motivated and encourage us to take action. Thank you for that. 

Thank you all for the info. we ended up pulling out of the deal due to a large amount of unforseen repairs uncovered during due diligence. I didn't call the city to find out about the garage but I'm still curious so I will reach out soon. We will move on and continue the search for small multi family in San Bernardino country. Thanks again.

General Question from a REI Rookie: Is a carport or a garage required in a duplex? Is it county or city dependent? If so, what department do I contact to ask?

I am in escrow on a duplex in San Bernardino county (Redlands, CA) and the owner tore down the old garage since it was in bad shape. 

Thank you in advance!

Thank you both for your response. I can imagine that adding a bed or bath is a great way to add value if the sqft will allow. it. 

I am curious about what types of rehabs or updates add the most value. For instance, most of the properties I'm looking at are in need of all sorts of upgrades, but which items have the most impact on the appraised value. The intent of this question is not to see what needs to be rehabbed in order to sell the property, but what should be rehabbed in order to have the highest appraised ARV so I could cash-out refinance.

Let's say that a completely renovated home in the neighborhood is selling for $300k. I buy a property for $200k and it needs $30k in rehab in order to be comparable, but I only have $10k in my budget... Where would I spend that $10k in order to get the most value in the eyes of an appraiser? Flooring, paint, updated kitchen, bath? 

Again, I appreciate all your responses. 

@Manolo D. we were definitely happy with the overall outcome. the GC we used did a great job. we plan on using his crew again on our next property if possible. however, I'm guessing you're referring to my other discussion about rehab costs from my contractor. we were happy with the outcome of this project but I don't have anything to compare this to. the fact of the matter is we don't know if his prices were fair for the market. we were in very unique circumstances on the last project where we had flexibility with our budget, so even if he charged more than the competition we still came out on top. moving forward we need to know more details. we are currently making offers on properties in need of rehab and we're using this GC's quote to help us budget for our max offer. if we can use him and still make a competitive offer then we will but we are getting beat by other offers. we just need to analyze all factors to see what we can change in order to compete. the two main concerns are that we are up against other investors making cash offers so they have no loan contingency and no mortgage payments inflating their holding costs, plus they probably have cheaper labor and material costs. so, we're just trying to analyze everything. our GC did a great job, only went slightly over budget compared to his original estimate, but we did plan for contingency and I ended up doing a lot of the work, so we were overall under budget, and he offered the quality of work we were happy with.

In case anyone is still interested... below is the link to the property. It turned out to be quite the success. We stayed on budget and all parties received a decent return. My wife and I staged the property ourselves and saved a few thousand by doing so. We are so happy to have been able to help my aunt get through this difficult time and can't wait for her to start fresh with a new home! 

On to the next property!

https://www.redfin.com/CA/Lake-Elsinore/31533-Cany...

Thank you all for your input. It definitely is a tough market in LA, and even the IE. A quick search on the MLS shows a high number of quick flip properties for sale. However, we are determined to find a deal. We already have funding lined up, pre-approval letters ready to go, just waiting for the right property and scenario.

I think I need to adjust a few things when analyzing the numbers based off all your input. 

1. Lower our expected profit for the first few deals, at least until we get to a point where we have the 'edge'... cash offer, good sub relationships...

2. Adjust some of our proposed rehab methods and potentially eliminate unnecessary repairs 

Thank you all for your help. Any other advice would be welcome!