All Forum Posts by: Derek Daun

A tenant informed me there is excessive condensation on the windows on one side of the unit. At first I assumed he was exaggerating until I took a look at it myself. It's a north facing wall that doesn't really get any sun during the winter, and enough water is condensing that it is literally pooling on the windows sill and dripping onto the bed underneath. This is my first winter with tenants in the unit, so I can't say for sure if this was always an issue, but based on how much the hardware is rusted, I assume it's been a long term problem. These are old single pane aluminum casement windows from the 60s, so it's not unreasonable to have a significant temperature differential with outside. The rest of the windows in the house are fine, but they get more sun.

I was planning on replacing the windows eventually anyway, so the it seems most straight forward solution would be to just go ahead and at least replace the North facing windows now. I was wondering if people think that likely should fix the issue. The house doesn't feel like it has significant moisture inside; I verified the dryer and bathroom van vent correctly. I'd hate to put in new windows only to find out it doesn't fix the issue.

@Greg Downey
I meant four months if I refinanced the three properties one at a time. I assume trying to do them all at once would be a nightmare as they would each be trying to verifying the mortgage standings on the others.

@Jaysen Medhurst 
How do HELOC rates compare to a commercial or conventional rates? If it makes a difference, the property is actually two adjacent four-plexes, so they might qualify as conventional individually.
I assume HELOCS would be the highest.

An apartment building I've had my eyes on for a number of years just came back on the market, and I'm starting to crunch the numbers. I don't have any experience in commercial loans, and I'm wondering what the best options to finance the down payment might be. 

I'd prefer to leverage equity in my current holdings if possible. Possible properties to tap are

• SFH worth about $330k, current mortgage 141k
• SFH worth about $270k, current mortgage 128k
• Duplex worth about 375k, current mortgage 184k

Purchase price of new property is approximately 1 million, so I need to come up with $250k-$300k.

I'd prefer not to sell any current holdings because they're located in transitioning neighborhoods that look to improve a lot in the future.

I could do cash out refinancing, but that's a long process. I'd presumably need to due the cash outs in series to keep the underwriting from freaking out, and that's a long 4 months to wait and hold up a deal.

I was wondering a portfolio lender might wrap them all up, including the new purchase, into one loan that I wouldn't need to put anything down for?

I also have about $100k in cash available, but I'd prefer not to touch most of that right now.

In addition to the state level Costa Hawkins repeal, there is also a local Rent Control amendment already likely to make the ballot in Sacramento. Luckily Mayor Steinberg has come out against it. It has all the usual suspects - large relocation fees if you don't renew a lease, fixed % of annual increase.

I intentionally rent under market, but will be forced to immediately raise rents if rent control goes in place to protect the long term value.

I honestly have still found better deals on smaller property publicly listed than larger multi-faimly publicy listed. That could just be because the deals are made off market. The big problem with small multifamily in Sacramento is all the cash buyers from the Bay Area. It's common for Bay Area people to have a big wad of 1031 cash from selling a single family that they'll readily over pay for a small apartment in Sac just to not have to pay taxes on their previous sale. I'm not sure if that trend affects the big multi-family as well.

I've been considering the accessory dwelling as possibly my next investment since I live in CA as well. Since I'd do part of the work myself, I'd likely be able to hit over 1% on investment from a rent/cost standpoint, which is almost impossible to do now. You are right about the owner/occupier thing for San Francisco though. I wonder if there's any movement on changing that law.

If you're serious about investment, the premium rentals in the Sacramento area are not really rental grade. Like you said, you likely have to put money in, and is really an appreciation/speculation play. 
You can do better in the area unless you're looking for turn key.

There's a good book they sell on this topic in the store here. It's a good as any other resource you'll find. Finding good contractors is more important than regional price differences.

What numbers are you trying to make work?

I use ACH transfer on one, and Venmo on the rest.