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All Forum Posts by: David Gutierrez

David Gutierrez has started 3 posts and replied 7 times.

Quote from @Bob Ritner:

Both the stat of CA and the city of Santa Ana have rent control. You did not state the city in OC, but if it is in Santa Ana, they have a fairly extreme rent control that passed this year so i would not buy multi-family there unless your are happy with the return without any meaningful rent increases. California's is not that bad and has a base rate, inflation rate and cap. This year ca would allow you a max 10% increase.

Wow Santa Ana is terrible.  3% is rough if your are below market.

Fortunately it's not Santa Ana 
Quote from @Sarah OConnor:

Do you use the 1% rule to figure the value of current and market rents?

I am not sure the 1% rule applies to much in California given the high cost of most properties..
Quote from @Bjorn Ahlblad:

Currently there is no rent control in Orange County-but that may/will change next month so underwrite at current rent. In any event you need access to piles of money to LL in California, or you could be forced to sell.

From my understanding, rent control for multifamily is state wide in California due to the law passed in 2019?  There are a few exceptions 

Hello all,

I got approached regarding a potential off market deal that I am trying to analyze.

Location is Orange County, CA.  Blue collar area, not the nicest area but pretty good location that I am familiar with

7 units.  1 bedroom/ 1 bath

Gross rents 87000 but likely 20% undermarket

expenses 

2400 annual utilities 

4300 annual property tax

2000 property insurance

800) annual legal/property management/leasing

6000 annual repairs estimate)
7000 annual cap ex estimate

My question is, do I price it based primarily on what the CURRENT rents are? Market seems a bit hot still although cooling off and interest rates are pretty high. Current rents maybe put me around 1.2 million?

i still have further due diligence to do in terms of inspections, etc. But just want to gauge initial pricing before moving on..

Thanks Kevin,

I went the ADU route as the building requirements are easier than for building additional Multifamily units. They can be more strict with required landscaping..parking..driveways..setbacks, etc. Due to the new laws, ADUs are much less restrictive.

My area is zoned MFR...so i can do two ADUs maximum. I am not completely sure on your situation since its zoned MFR but you have two SFRs. You might be able to get two ADUs

Small update, while the city couldn't initially find the permits...the county assessor had permit numbers on file from the 1950s.  They were able to provide that to me and that was enough to get the city to give us the go ahead for plan submission for two ADUs

Hello everyone

I purchased a property in Buena Park with two units.  A 2 bdrm/1 bath and a 1/1 on a zoned Multifamily lot.  

The second unit has its own USPS address, gas, electric meters but the city is unable to find  permit for it.  The previous owners purchased the property with that unit in place and are unaware of permit issues, so its estimated to be over 20 years old.

My goal is to add TWO ADUs to the property.  In order to do this, I need the city to officially consider the second unit as a second house / duplex.

I am working with the city planner to try and find the permit..but I was hoping for any thoughts or ideas from the BP community on how to attack this issue.

Can you get an address and meters for an illegal property?  

Is there a difference in getting the second unit permitted as a second main house as opposed to an ADU?

I found a recent law in california that appears to allow me to retroactively permit a residential structure based upon the construction codes present at the time of construction.  Anyone done this process?



(2) A building official has the discretion to apply the building standards that were in effect at the time a residential unit was constructed. This is permissible under the authority to grant modifications on a case-by-case basis and the authority of a building department to approve a material, appliance, installation, device, arrangement, or method if it finds that the design is satisfactory and equivalent to the building standards code. Several jurisdictions were not aware of this existing authority.(3) It is the intent of the Legislature to clarify that when a building permit for a residential unit does not exist, the appropriate enforcement official may make a determination of when a residential unit was constructed and then apply the California Building Standards Code and other specified rules and regulations in effect when the residential unit was determined to be constructed for purposes of issuing a building permit for the residential unit.





Hello Everyone,

Long time reader, first time poster.  I wanted to ask your feedback on a potential property.  I am an OOS investor looking at the San Antonio area.

Newly built Quad in a B/B- area near military base

560,000

Rents 4800

 loan with 25% down (4.375% 30 year)

Hoa - none

Closing costs 1.5%

Est appreciation 3.6%

Vacancy 5%

Property tax 14000

Prop mgmt 8%

Insurance 2k annual

Repairs / cap ex - 5%

I estimate around 6k annual cash flow.  I don't know if sewer/water is included or not at the moment.  What do you think of my estimates for vacancy, repairs etc?  Decent deal or should I walk?