All Forum Posts by: Derek Willis

@Jacob Sherman Have you considered using a conventional loan and just putting a large umbrella coverage over the top until you have enough assets to worry about LLC protection? If your personal DTI would qualify for a conventional loan on investment property then once you have it rented with signed lease the lenders I've worked with will count most of that to your income effectively lowering your personal DTI back down to position yourself again. Personally I would just pick up the phone and start having conversations with lenders to talk through your personal details to see the options if you haven't done so already. Happy hunting!

@Michelle Herschend If your interested in further south something to keep an eye on is a new convention center and hotel being built on the bay in Chula Vista. I was speaking with the city inspector a month or so ago and the project has full permit approval and should be complete in 2 years. The area just next to where the convention center site is less than optimal so I suspect an increase in value there. We own a rental about a mile away with a granny flat which we may turn the granny flat into STR when project completes since we are walking distance from downtown Chula. What may throw a wrench into it is the over regulation typical of the govt in this area to squash STR rentals. With all of this said I don't have specifics of a great deal but an area to keep an eye on.

@Corey Lyons A friend of mine rented out his garage for business storage in Southern CA and it worked out well for him for awhile. Personally I would look to converting the garage as an ADU or JADU if its possible.

@Marlina,  The verbiage that I am using is right from a lease template we got from biggerpockets.  Since entire leases have been ignored for past year having the verbiage may not do much but I figured it doesn't hurt to add it in.

57. ABILITY TO PAY. Tenant represents and warrants that there are currently no circumstances that Tenant attributes to the COVID-19 pandemic that would impact, in any way, Tenant's ability to pay rent for the term of this Lease Agreement. Such circumstances attributable to the COVID-19 pandemic include, but are not limited to, the loss of income due to COVID-19, child care expenditures due to school closures, health-care expenses related to being ill with COVID-19 or caring for a member of the Tenant's household or family who is ill with COVID-19, or reasonable expenditures that stem from government-ordered emergency measures. Tenant further represents and warrants that, notwithstanding the existence of any of the foregoing circumstance, Tenant has the ability to pay rent for the term of this Lease Agreement and agrees to continue to pay rent, in full, for the entirety of the term of this Lease Agreement

@Jeffrey Palmer I just added an ADU to a SFH in San Diego county and one requirement was the ADU could not be more than half the size of the primary home. I am not sure about 2 ADUs but following the square foot rule the primary home would need to be very large to have 2 ADUs fit.

@Kasia Harmata The CA market is out of control and is very difficult to find cash flow properties although I'm sure there are a few out there. My wife and I have property on southern CA but recently decided to start looking out of state. We are planning to hire property management to watch over everything. My main concern is building relationships of people we can trust. My W2 job turned work from home so I am planning on renting an Air BnB during the buy and fix up process to be nearby to build those relationships.

@Colleen F. Yes thank you. We have a section now dedicated to Covid.

We have another rental coming to market soon and wondering what others are now using for minimum tenant requirements after everything that has happened in 2020 with the eviction moratorium.

This property is in a class B neighborhood in southern CA.

We were thinking 650 credit score, 3 times rent income, no evictions, no bankruptcy, and clean criminal history.

We would rather hold out longer to find a good tenant than end up with bad tenants with the backing of CA free legal funds.

Thoughts?

@Josh Rowe We use DACA Financial and has been fantastic. They are over in the Ruffner road area.

@Alex Bekeza. I too live in California and can name at least 5 people I know have left in the past year. Also, the cost of Uhaul to leave CA has skyrocketed due to high demand so yes people are definitely leaving.

With many companies now allowing WFH people are no longer forced to live where they work. It will be interesting how this shakes up things in the long term for many high cost places, not just CA.

I do also agree many people are shuffling within CA. Several offers for homes in San Diego area are coming from people in the Bay Area and LA. A 3/2 1500 sq ft home for $700k must look like a bargain compared to Bay Area prices.