All Forum Posts by: Eric Petersen

@Dave DeMarinis My concern with finding an "active investor" as an agent was that I felt that I would be competing with them for the best properties. Is this a false fear?

@Brian Garlington While I may look scattered, and maybe I am, my goal is to find properties in areas that are close to me or that I travel to/through frequently. I really don't care if the property is in El Cerrito, Hayward, Danville, Antioch, etc. as those are all within a radius of me, the key is the economics. I travel quite a bit to the Reno area so I am also open to rentals there.

I am generally looking for 1-4 unit properties but am open to large complexes if the numbers are right.

Lastly, I am also interested in OOS investing but really am not sure how to break into markets that I have 0 affinity with.  I have read a lot about out of state investing, and my plan would be to find a good manager to run it all for me.  I have a friend here in CA that has properties in Oregon, Washington, North Carolina, etc. and it is all working out pretty well for him.  The returns that are achieved in these other states are VERY high compared to CA due to the much lower cost per unit with rents that aren't that much lower.  I often LOL (only because it seems unfair) when I read about investors that buy a duplex for $100k and rent each side for $750.  Here that duplex would cost $800k and bring in maybe $1k in rent.  Obviously the $250 in extra rent does not compensate for the 8x price differential.

Still trying to break the ice.  Made a few offers but still no purchases.

@Brian Garlington  Yes, but I have the ability to do all cash offers as well.

More important to me than the speed at which you responded was how you "found" the deal in the first place since it was apparently off-market.  In a competitive situation it sounds like your offer may have been looked at differently so while speed was definitely a key to your success, being able to move on the deal at all was the crucial part in my mind.  Any thoughts you can share on "where to look" as you put it as I can't move at all if I can't find the deal in the first place.

@Janelle Green I am looking in the East Bay and truly the greater Bay Area but Oakland and Berkeley are currently out due to onerous landlord rules. I have a great agent in the El Cerrito & Richmond area but could use somebody in Antioch, Pittsburg Martinez and/or Solano county. I am also looking in Reno and will be meeting someone later this week.

@Wyatt Franta thanks for confirming and the sample questions. I will add them to the list.

Maybe another follow on would be what to do when I ask someone to look for properties in Area A and then find out they are horrible. Do I formally fire them or do I just find someone new and now I have two people in Area A. I want to be honest with everyone as it is only fair, but not sure how to go about that step. I have fired a couple just to make the point that they were less than useless and should step up their game, but otherwise if they just kind of fade away into the sunset, should I take any proactive steps?

I have a couple really good agents in various areas around me and am looking to expand to a few places that are a few hours away. I know the areas, but I don't know them "than well" so I need help in confirming information and also would love help finding properties. I have received referrals, etc. but it seems most of the people referred to me really don't know what they are doing in relation to MFR. I try to be self sufficient and largely spoon feed them the properties I am interested in. For example I might find property X. Based on the listing I can generally determine cashflows and get some idea of the property but I can't tell everything. So I ask the agent if the listed rents in that area are fair, top dollar or low. Is the area up and coming or a "scary" neighborhood. Does the MLS have any telling info that an non-agent can't see? Most of these "specialist" agents can't answer much of anything in this regard because they really aren't MFR people. The agents I currently use would be able to tell me that the area isn't "good" and that the rents are high because they are a special state sponsored program (not section 8) that could stop at any time. Or, that it is a great location near a University and that listing price is higher due to the fact that vacancy is near non-existent, but that the condition is a bit low for the area. That is actionable for me and I can decide whether to drive and see the property or strike it off the list. I also discuss with new agents what I am looking for in terms of cashflow or return or some mix and the wanna be agents seem to always bring me properties that have significantly negative cashflow and then can't answer any questions as to why they brought that particular property to me.

I am needless to say, frustrated. Am I asking too much? Is there a way to find an agent that really does know the ins and outs of the MFR rental market? Are there specific questions that might give a clue as to their abilities? I can monitor the MLS and other sources, I really just want someone to verify what I think I know and then do the paperwork for the offer/purchase. Oh, and if they have an inside scoop on something that might be coming soon, then let me know about it early.

No need to be gentle, I have thick skin.

Reviving an old thread.  I have spoken to a realtor that says that Section 8 is really driving competition for multifamily units. I was wondering if someone could tell me how the person qualifies for the amount of voucher they get.  Meaning that if I have a place that I want to rent and get top dollar, and Section 8 payment amount is at the high end of the rental range, does it make sense for me to price my rental at the top of the Section 8 or am I going to lose a bunch of potential Section 8 people because they can't afford it even though it is within the Section 8 limit.  I guess my question is, do all Section 8 people get the same amount (for the same area) or is it variable?

People in my area have a very low view of Section 8, but in all my reading and research, it seems that Section 8 can actually be better if you get the right tenant.  Screening all applicants thoroughly seems to be the key to success so I am not overly afraid of Section 8.  Please put fear into me if I should be more afraid.

Other questions...

Do HOAs typically have restrictions on Section 8 specifically even if no other rental restrictions?

Do you include more rehab budget in your cashflow model due to the fact that many may be smokers and/or may not take as good of care of the unit?

Probably not Section 8 directly, but can I forbid smoking?

For people with experience, can I request an increase every year (as long as reasonable and under the cap) or will there be pushback?  I might feel more inclined to increase if the tenant is not directly impacted.

I am in California in case that matters.

I have tried to search so if I missed this somewhere, sorry.

In the experience of the group, how much equity does it take for a second to bid at a foreclosure sale? I typically will only bid on firsts, but a few of them I am contemplating have a bit of equity in them if the second is wiped out. Is it normal then for a 2nd to bid up to the FMV in order to maximize their recovery or do they typically hesitate throwing additional money after a property.

Example

Estimated Retail Price                 700k

1st Loan                                      700k published, 500k opening

2nd Loan                                     250k

I am making these numbers up but they are similar to what I am seeing.  In this case, it would seem the 2nd should bid up to maybe 600 with the hopes of getting half its 250 back and leave room for error.  However since banks don't like to own real estate, I wondered if they really would bother.  It has been a few years since I was in the game and, as far as I know, didn't see a 2nd bid on a property.  I ma now an re-entering and wondered what is being seen.

Happy to read up and get current again if there are some great posts, books, etc. that people want to link to.  I saw that there is a great tax book on here, but that it is not as useful with tax reform so waiting for that to be reissued.  Thanks again for everyones help.  Hoping the holiday keeps folks away as well.

Thank you.  Will see what happens over the next couple days.

I don't mind waiting until I have possession, and I planned on CFK, however I would like to see the inside sooner than later.  If I understand you correctly, you are saying that I offer the CFKs ASAP with the contingency that at move out (hopefully quick but it is the holidays) it needs be in the same condition as "today" and therefore I get to at least walk the inside so that I know the before and after condition.  

Do people generally take into account the holiday season when evicting people?  I know time is money, but karma is a b*&%^.

I am trying to find the rules related to inspecting a property bought at a court auction. The property is in Nevada and the only rules I can find relate to inspections related to a tenant.  I want to inspect the interior to be sure the prior owners don't damage the property any further and also want to be able to insure the property as quickly as possible.  Can someone point me in the right direction so that I can protect my interests without running afoul of trespass or worse.