All Forum Posts by: Dennis Maynard

@Jon Schwartz. Couple notes on your thoughts...

1. Net Migration - all processes and timelines have been accelerated due to covid.  The problems facing LA and CA are created by local politicians and state representatives.  It will take time to reverse the policies to a pro-growth position.  Hence why there are so many vacancies, people left.  

2. FHA Loan - a) you still have to qualify, and the amount of income used towards the loan has been reduced. b) I believe for a 4 unit you are still required to put substantially more down than 3%, I believe it's 20% down. FHA. I sold a 4 unit recently, the buyers were going in FHA 5% down and ended up going conventional with 20% due to lender requirements.

@Jon Schwartz. Great question.  Low affordability. Shutdown of the economy due to covid.  Do I need to say the rest from the events of the last 60 days...

LA is hospitality and entertainment driven economy.  Both are shutdown for those in that line of work.   CBRE is predicting a 10% decline in rents in the next year nationwide.  For LA, I think more.  Last year at this time, there were maybe 4k units available.  You can check this stuff, go to apartments dot com and type in city of Los Angeles in the search bar.  That's a massive shift in vacancy.  People were already leaving LA at a rate of 5k per annum net since 2017.  The current situation has created a shift in where people want to live.  I'm see townhomes coming up for sale in transition neighborhoods where someone could buy it for less than paying rent...  The shift is happening.

@Jon Schwartz @Jeremy Pelle - you don't need a database, you need a broker. We already have that information. And there is a contraction happening in the high end SFR market right now. Taking 60k and dumping it into an expensive duplex is not ideal. There are distressed buyers out there right now, but you have to be prepared for not having a tenant. Maybe you didn't see my previous post, 30K+ units / houses available for rent in LA right now. And when tenants start realizing they can go rent a house for less than your apartment, they are not going to stick around. There is going to be a massive shift in rental pricing in LA. It's already started.

@Caleb Brown @CJ M.  Yes, you both are on the right track.  There are opportunities to be found.  It really depends on personal goals and timeline.  I'm here if anyone has questions about what is happening here.

@Young Kim. It's not a simple answer.  Everyone has a different opinion on it.  Let's connect offline.  I'm happy to go over your options.  Easier on a call.

There are a lot of different ways to go with this.  If you are investing, you don't need a license.  If you want to sell, get a license.  You can still invest with a license.  Being an agent costs money, it is not free.  Takes money to make money.  If you would like to discuss the in's and out's, message me.  I'm in Los Angeles.

Get an architect.  they will hire or consult with a structural engineer if necessary.  Architects are ultimately responsible for plans which is why they are the point on development teams.

@Brian G. Well put. Yes, all those have potential, but would be foolish to keep renting and having 6 people in a 2 bedroom apartment and not take the tax advantages of home ownership as you mentioned. With FHA, there are limitations on condition, so primarily a cosmetic to light fixer is the sweet spot. That also depends on his capital to invest which we don't have any indication on.

@Jose Guzman It really depends.  If you can find and negotiate a fantastic deal, and then hold on to it for a while until all this blows over, make the payments while it's vacant, sure.  If you need a place to live, buy a house.  In your situation with that many kids, I would move in that direction.  Take advantage of the great rates, live in the house as long as you need to, then go buy another and keep that one, rent it.  You have your first income property.  Little safer right now.

@Dakota Burkeen Buying a 4 unit in Los Angeles right now is not necessarily a good idea.  We are in a situation in which people are leaving LA for the suburbs, and the City has put a moratorium on evictions while they keep people on lockdown.  Currently it is estimated that 26% of renters are not paying rent.  If you go on apartments.com and search City Of Los Angeles, you will see that there are currently 35,000 rentals available in the City.  This means a real correction in rental pricing is coming quick.  CBRE estimates that rental pricing across the country will fall by 8% over the next year.  As far as finding a home to live in, different story.  Depends on what and where?  Demand is high in some areas while other areas are offering up opportunities to negotiate.  Appreciate the outside the box thinking though.