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All Forum Posts by: Dan H.

Dan H. has started 29 posts and replied 6064 times.

Post: Removing existing tenants upon sale of property in San Diego?

Dan H.
#2 Managing Your Property Contributor
Posted
  • Investor
  • Poway, CA
  • Posts 6,181
  • Votes 7,159

@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.  

Post: Wholesale Investors resource

Dan H.
#2 Managing Your Property Contributor
Posted
  • Investor
  • Poway, CA
  • Posts 6,181
  • Votes 7,159

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

Post: Looking for a mentor in San Diego

Dan H.
#2 Managing Your Property Contributor
Posted
  • Investor
  • Poway, CA
  • Posts 6,181
  • Votes 7,159

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

Post: debt (lease) and invest more vs. no debt (cash buy) invest less

Dan H.
#2 Managing Your Property Contributor
Posted
  • Investor
  • Poway, CA
  • Posts 6,181
  • Votes 7,159
Originally posted by @Wes Brand:

You're spending a lot of time thinking about this for someone who can afford to drop 50k on a new car... ;)

... Plus, you're in the bay area, where there's no weather. You can find an amazing deal on a car that's only seen highway driving, no rust to speak of.

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.  

Post: New from San Diego & Hawaii - Lets Make Dreams Reality! HNY 2017!

Dan H.
#2 Managing Your Property Contributor
Posted
  • Investor
  • Poway, CA
  • Posts 6,181
  • Votes 7,159

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

Post: Rental Property Insurance

Dan H.
#2 Managing Your Property Contributor
Posted
  • Investor
  • Poway, CA
  • Posts 6,181
  • Votes 7,159

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

Post: Zoning RS-1-7 San Diego

Dan H.
#2 Managing Your Property Contributor
Posted
  • Investor
  • Poway, CA
  • Posts 6,181
  • Votes 7,159

@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

Post: Zoning RS-1-7 San Diego

Dan H.
#2 Managing Your Property Contributor
Posted
  • Investor
  • Poway, CA
  • Posts 6,181
  • Votes 7,159

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. 

Post: california residents investing in Houston

Dan H.
#2 Managing Your Property Contributor
Posted
  • Investor
  • Poway, CA
  • Posts 6,181
  • Votes 7,159

I am pro San Diego investing but I would not let the out of state be much of a factor as there is not a huge difference between investing hundreds of miles away (current) and a thousand plus miles.  

Good luck.  

Post: Am I making a mistake investing in Southern California?????

Dan H.
#2 Managing Your Property Contributor
Posted
  • Investor
  • Poway, CA
  • Posts 6,181
  • Votes 7,159

I show that link shows LA as 8th worse but it also shows San Diego as 9th worse.  I am not an expert on LA but know the San Diego market well.  The appreciation rate listed for San Diego is lower than any source that I can find.  Zillow shows my investment zip code (which is not all of San Diego) as over 10% and neighborhood scout shows San Diego as 8.3% which it lists as 9 out of 10 appreciation in america.  Three years ago San Diego appreciated over 20% and over 8% the last 2 years.  So I question the BP appreciation source and question how a location that ranks 9 out of 10 in aporeciation in the US for last 12 months can be anywhere near the bottom (9th worse) when financed.  Note if I finance with 20% down a 10% appreciation is a 50% return on investment if the rent only covers the expenses (I.e. Without any cash flow). 

It is my belief that most experienced RE investors leverage their money and therefore will typically choose to finance even if initially purchased with all cash. 

I am a big fan of So Cal investors investing in So Cal. All you need to do is look at 10 fastest appreciating markets for last decade and compare them to the national average. So Cal not only would have been a superior investment but it would not even be close compared to the average locale. Of course past performance is not necessarily an indicator of future performance. However, One thing to note about So Cal properties is the supply is finite especially in coastal urban areas. The demand seems to be infinite.

I have purchased a couple of times near market highs but both those properties have done great.  In 1991, I purchased a property at $167k.  It depreciated to maybe $140k.  Today it is worth about $540k.  In 2003 I purchased a property at $741k.  It fell in value to low $600k (maybe $620k).  It is worth north of $900k today. My point is that if a property depreciates but there is  no need to sell when depreciated historically you will do fine. 

So here is my case for So Cal:
- Advantages of local including expertise, cost to get to property, able to self-manage if desired (typically ~10%). The family had an out of state property hit by 2 hurricanes. Even though we hired contractors, because we were not present we were the property getting the least attention with the slowest work.
- Appreciation: Do the research. Use your own knowledge of the supply/demand. It really is simple Econ 101. I am not stating that it is certain to appreciate like it has but econ 101 tells me that excluding something catastrophic it is likely to continue to appreciate.  Historically San Diego has always appreciated long term. 
- Prop 13: My family suffered from this big time on a property on Gulf Shores Alabama. The taxes went up faster than the rents (until the hurricanes). We sold this property even though it was awesome (on the sand).
- I have no problem finding cash flow properties in my chosen area in So Cal. These properties cash flow using a $300/unit per month cap expense and 5% vacancy (our vacancy rate is less than this) and 5% maintenance expense. This cash flow does not include equity gain from making the payment which is in effect additional cash flow that can be obtained with a little effort. They may not cash flow with other parts of the country but the effort is less than out of state and so far the appreciation has more than made up for any reduced cash flow (Each property I have owned at least 3 years has gone up at least $100K - I have one property that has been owned only 1.5 years and is probably up $50 to $60K).
- The equity gain for rehabs is larger than many other parts of the country. Nice properties are greatly valued over neglected properties. This implies that I can purchase neglected properties, rehab, and have additional appreciation (more per unit than many other parts of the country).

Good luck where ever you choose to invest.