All Forum Posts by: Eric G.

@Kyle J.

Can you tell us which lenders you've used to get a Heloc on a rental property?

@michael swan

You mentioned that your cash flow is tax deferred. Can you explain this? I have rental properties that cash flow and I pay taxes on those gains. Of course, a portion of those gains are offset by depreciation, but I want to make sure I'm not missing a crucial piece of information. 

I seem to have answered my own question! 

The answer is that, yes, 70% of ARV is possible in Orange County. It's possible anywhere! But much harder to come by. In Orange County, or any other premium real estate market, closer to 80% ARV is a more realistic find.

If there are any investors in Orange County that have a different experience, I'd love to hear it. I'm here to learn!

I completely understand your concern, and I'd venture to guess that many people have the same concern. However, when you compare 2006 to present day, it doesn't seem that we are headed for a crash. Much of the price run up at that time was due to fraudulent, or artificial demand. If you could fog a mirror you qualified for a mortgage. Today, the price run up is built on a more solid foundation. Banks are stricter in underwriting loans, and it's no longer commonplace to get a 0% down mortgage. In fact, I believe the share of cash buyers is higher than ever. That means that end users and investors alike have skin in the game and won't be walking away from properties. 

You bought your town home at the perfect time. Real estate was going through a fire sale and it over corrected to the downside. I know some people want to sit on the sidelines and wait for another crash, but that was a once in a generation type event. Historically, real estate goes through cycles with much more modest down legs. 

I am a property manager and relatively green investor in Orange County, CA. I own three rental properties in my county. 

I'd like to continue to grow my buy and hold portfolio, but my problem is deal flow. I'm looking to buy properties in my area at 70% of ARV, fix them, and rent them.

I've read that wholesalers generally shoot to get a property under contract at about 65-70% of ARV. I know Orange County is a hot, premium market. So, here is my question:

1) Is buying at 65-70% ARV realistic in Orange County? If not, please educate me.

First thing, I purchase my gift cards to Lowes at a discount of about 9%. I'm sure there are plenty of sites that broker second hand gift cards, but I use Raise. They even have a mobile app that you can use to pay at the register with your online gift card. Never have to deal with a physical card. 

Next, I sign up for Lowes new mover program and they email you a 10% off coupon (up to $5000 purchase). You can also purchase these discount coupons on eBay for a few bucks if you don't want to sign up multiple times with different emails. 

And that's how I save close to 20% at Lowes. 

You have two major advantages: youth and money. At your age you should be taking risks. Calculated risks, of course. But buying a property all cash is far too conservative. One of the biggest advantages of using real estate to build wealth is that you can leverage your money. It's hard to give specifics, but my piece of advice is to do your homework and leverage your $250k into a bigger property (or multiple properties).