All Forum Posts by: Dan H.

I think @Lee Ripma has a better take on the emotions than I do.

I use what I think has to be one of the more expensive tax people in San Diego (Miles Lawence: Lawrence Tax Services).   I believe it has been money well spent as he seems to maximize our returns without being so aggressive to have yet resulted in an audit.  As others have indicated use of a tax man (and I will add financial advisor) is an investment.   It is not only for after you have achieved a certain level of success but it can help obtain that level of success.

I suspect that you look at any financially successful person and they have a tax person and probably one or more financial advisors.  Did they wait to be successful before building the team?  Possibly but I guarantee the team has helped increase their financial success (otherwise they would no longer be part of the team).

For your best chance at financial success you need to start building the team that will allow you to obtain that success as you can only get so far without a team.  A tax man (My tax man is not a CPA which is why I use the term tax man) and a financial advisor should be part of any team that has financial success as its goal.

Good luck

In certain neighborhoods you can still find cash flowing duplex to quads on the MLS (even after the recent rate hikes) but the best deals are often found not on the MLS and often take quite a bit of work that is often at risk work. For example there was an off market purchase of a unit in Escondido fairly recently that required significant title work. The investor was a large investor who has a team that could help in this area. However, it the title issue could not be fixed the effort would have been nothing.

Make sure you are educated on values and be patient. Good deals hit the MLS but it is not every day so patience is required to get the good deal.

Alternatively drive for dollars, targeted mass mailings, bird dogs (sources), buying from a wholesaler are other options.  Be very leery of wholesaler comps as the wholesalers typically use the highest comps and the bank appraisers typically avoid the highest comps and are more likely to use the lowest comps.  I am currently disputing 2 bank comps - both bad but one was real bad as they added $10K for a triplex versus the duplex comp ($10K for a whole extra detached 2/2 unit); the $10K was on top of the adjustment for overall footage.

I know in my market I am better able to judge price than the appraisers because I have had the luxury to have seen each competitively priced property (at least from the outside) when it hit the market.  The appraisers also seem to under appreciate number of units, bedrooms (typically a $2.5K adjustment), and bathrooms (typically a $5K adjustment for a full bath and a $2.5K adjustment for a half bath) compared to the market place.   I know of no investor in my market that would not purchase a duplex that is 3/1 versus the same duplex 2/1 if the price was only $5K higher (both duplexes in this case are same condition, footage, and similar locations but one has a floor plan to have an extra bedroom versus the other floor plan).  I track each sale in my market.  I can almost always tell in my market a duplex to quad that will have an offer accepted in the first week versus lingering on the market (i.e. I can tell that the RE is priced so that it will sell quickly).

Good luck

@Account Closed has it correct.  The best way to get rid of a tenant who has a lease is to provide incentive for them to leave.  Another option, that is no where near as good, is if they are breaking the lease to evict.  If they are a decent tenant, abiding by the lease, then this is not an option.  

Good luck.  

I agree with @John Mathewson that this site can help find buyers.  I believe you will want a pro account to post to the marketplace. 

If you find a wholesale deal enough below market in coastal So Cal that it can be flipped with decent return you will have no issue finding buyers. This likely means >= $100 below ARV. The holding costs, rehab costs, selling costs, risk, etc. make it so that less than $100k below ARV with the risk leaves too little profit.

Good luck

if I were you I would house hack into a duplex with an fha loan.  Fha loans require minimal down payment.  If you do not know the term house hack it is where you live in one of the units while renting out the other unit(s).  

More challenging options include finding a seller willing to finance 100% or partnering with someone that will provide you some equity in exchange for labor.  The exchange for labor will work best if you find a good deal on a property because labor is not worth much (I would not trade equity for labor as it makes more sense to pay for it).  

Good luck

It is a matter of perspective.  When I go to the Bay Area (from San Diego) there seems to be lots of weather.  My sister in law says if I do not want any rain in Bay Area there is 3 months that typically do not have much rain.  

We of course have the opposite problem with about 3 months were we typically get some rain which of course explains the water shortage etc.  So far this rain season we are an inch above normal at this time (approaching 5" for the fall and winter so far).  

I do understand your post and am mostly just noting how perspective vary depending on what you are used to.  I realize Bay Area is mild compared to much of the country.  

I suspect your investment has done great in terms of appreciation.  It likely has more than doubled in value.  Have you already taken out some of the equity?   Unfortunately interest rates have risen significantly since the election.  However fortunately the rates are still historically low. Leveraging your existing appreciation is an easy way to continue to expand your RE holdings whether it is local or elsewhere.  

I am very pro San Diego RE investing.  My family has tried the out of state RE investing and currently has one remaining non local RE property which has been our worst performing property.  

San Diego investing is mostly an appreciation game (property and rent) as you have experienced. In addition prop 13 provides a nice protection. Easiest property management is local properties. Note San Diego appreciation has historically made San Diego one of the best locals for ROI on financed buy n hold properties anywhere.

Good luck

We also use USAA as our first choice but for us USAA only insures a small number of units.  I think they have increased this number but our units that were insured by another insurance company we have not switched to usaa.  

For those units not insured via USAA we use State Farm via jasmine corona in San Diego.  

Good luck

@Keeya WangJones

He is not cheap but he is thorough.  He will look at the foundation but if he sees anything of concern he will recommend having a foundation contractor look at it.  

His name is Jason.  If you colleague request me I will reply with phone number (posting police do not allow phone numbers outside market place even if it is a third party person/recommendation).  

Good luck

Houses built from late 1800s to maybe 1935 often are on sea sand fill.  Sea sand fill will eat the foundation footings.  Foundation expenses can be excessive.  My #1 recommendation is to get a foundation inspection from a licensed foundation contractor.  Ideally the property has already had its foundation repaired and there is no issue but you do not want to get surprised by a huge foundation expense.  

Negotiation is largely related to demand.  If there is significant interest in the property you will not get much of a discount.  However a good property inspector can find many issues which can reduce the selling price even after negotiating a price.  My inspector once got the seller to accept $47k less than our negotiated price.  Once issues have been identified the seller is obligated to disclose them to other potential purchasers. Your agent should remind the seller's agent of this when negotiating. 

Good luck.