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All Forum Posts by: Dan H.

Dan H. has started 29 posts and replied 5854 times.

Post: Declining a tenant's application

Dan H.
Pro Member
#2 Real Estate Success Stories Contributor
Posted
  • Investor
  • Poway, CA
  • Posts 5,968
  • Votes 6,896

Do not concern yourself about her $30 application fee.  Once credit/criminal check run there may be good reason to deny candidate as I do believe there is good chance she lied about who is planning on living in the unit.  

If she passes the credit/criminal check this would be worse case but you can reiterate the occupancy rules and consequences of having some one not on lease occupy unit (eviction).  Hopefully she either walks away or follows the occupancy rules but if not you need to enforce the rules.  

Good luck. 

Post: New Meetup in San Diego - Feeler

Dan H.
Pro Member
#2 Real Estate Success Stories Contributor
Posted
  • Investor
  • Poway, CA
  • Posts 5,968
  • Votes 6,896

There are quite a few San Diego REI meetup groups on Meetup.com. Would the goal of this meetup be to meet the various people in San Diego from Bigger Pockets? I am just trying to determine what would make this Meetup unique to the half dozen or so San Diego REI Meetup groups and their associated Meetups.

I definitely do not have time for a meetup until next year.  Holidays are always busy but I also had a long time tenant move out so the unit needs a lot of little stuff (lots of little stuff is cheaper than big stuff (rehab) but takes a lot of time).  So the last couple of weeks have had my "spare" time spent on property management tasks related to finding a good tenant and getting the unit ready to rent.  We only gave ourselves to Dec 4 to have it ready and we happen to have got a likely tenant for Dec 4 (so no slack time - we must finish to plan and so far my handyman has been sick 1.5 days).  Hopefully by tomorrow the potential tenant will have passed our screening.  So other items (decorating, cleaning, researching next vacation, etc.) have been pushed until after the unit is rented.

Post: Turnkey Real Estate Investing

Dan H.
Pro Member
#2 Real Estate Success Stories Contributor
Posted
  • Investor
  • Poway, CA
  • Posts 5,968
  • Votes 6,896

it is my belief that most turnkey properties under estimate capital expenses. I believe in low cost markets capital expenses will exceed $200/month (in a today's dollars) on any SFR. I use $400/month is So Cal for SFR cap expense ($300 on multi units which in my case are both smaller and share certain items (such as roofs, foundations, plumbing, etc) reducing costs).

So make sure you are going to get a top property management company and make sure that the capital expenses used in your cash flow calculations are conservative.  There are quite a few forums/blogs dedicated to capital expenses and property management. 

If you can get both a top property management company and the cash flow you desire with conservative cap expense estimates then you may do great with turnkey. 

You will, of course, not be able to obtain the instant equity that can come with doing your own rehab. Also in general the property owner will be more diligent property manager than a property management company but the inexperienced diligent property manager may still make mistakes (such as not thoroughly screening tenants) as part of the learning process. 

So I believe turnkey can work but like every large investment you need to do your research to verify it is likely to be a good investment (research capital expenses, the property management firm, vacancy rates, local economy, ... - everything). 

Post: San Diego capital expenses

Dan H.
Pro Member
#2 Real Estate Success Stories Contributor
Posted
  • Investor
  • Poway, CA
  • Posts 5,968
  • Votes 6,896

Congrats on the purchase.   It will take many years for you to get Cap expense numbers because some of the items will have lifespans in excess of 30 years (windows, roof, tile work, etc).  I have been doing this 13 years and have yet to do a roof, water heater (I have a tanked water heater that is 25 years old and has not started to leak), or furnace (but I did obsolete one wall furnace with a split HVAC).

In the absence of numbers I believe that the numbers I put forth above are the best available for San Diego.  By duplex I am assuming you have attached units.  For a 2/1.5, 800' I would use $300 Cap expense.  if your units are larger then raise the estimate a little and if smaller lower it a little.  You are probably 5 to 7 years from having your first cap expenditure if the rehab was done well.  If you have carpet flooring that has a good chance to be your first cap expense.  Hopefully you have banked enough cap expense when the carpet is to be replaced to pay for the carpeting and have some reserves built up for larger items like roof, furnace, water heater, structural, etc.

BTW when I rehab I have been removing carpet for longer lasting floor options.  It is more of an investment up front but it likely will balance out and it is nice to replace the flooring less often (saves time).

BTW2: I recently had a severe slab leak on a unit rehabbed 1.5 years ago.  The place of the water manifold was in the worse place on earth (no way to get to it without ripping out a tiled bath/shower unit) resulting in a complete cold water plumbing replacement (Rerunning all new cold water lines was cheaper than ripping out the shower or jack hammering the foundation to repair).  I chose to do the hot water at the same time - not covered by insurance.  The leak affected 2 units.  Because the damage was so significant I made a claim with the insurance and they are covering significantly more of the cost than I had expected (the total cost will likely exceed $10K but it appears insurance is covering over 50%).  I previously had a more normal type of slab leak on a different unit with more normal costs to fix (I think it was ~$3k total cost including water loss) and had not declared it against the insurance (but now wonder if I should have).  So some cap expenses may be able to be claimed against insurance to defray some of the costs.  If this was not so extensive I would not even have looked into insurance coverage for old plumbing leaking as I never knew that plumbing that had lived its life could be covered by insurance (or at least the damage and repair could be covered by insurance). 

Post: Terminating Parking Easement

Dan H.
Pro Member
#2 Real Estate Success Stories Contributor
Posted
  • Investor
  • Poway, CA
  • Posts 5,968
  • Votes 6,896

First I am not a lawyer, so realize that this is definitely not coming from an expert in this area of property law.

I agree with the other posts.  If you received nothing for granting the use of this parking space then it can be revoked at any time but likely the most amicable way to do this is by explaining that your tenants have a need/desire for the parking space and therefore you want to allow your tenants to use the space.  Do it nice but realize the neighbor may be  disappointed as you did tell him in writing that he could use the space.  He would not have requested the space if he did not desire it.  So try to keep things amiable but you do have the right to change your mind if you received nothing for the use of the parking spot.

If you received something for the use of the parking space you are in a different situation.  You could try to "purchase" the parking spot back or get lawyers involved.  From your description it does not sound like this is the situation.

Post: Starting out in San Diego

Dan H.
Pro Member
#2 Real Estate Success Stories Contributor
Posted
  • Investor
  • Poway, CA
  • Posts 5,968
  • Votes 6,896

@Rafael Alcaraz I am a small investor mostly in Escondido which is quite far from San ysidro but still San Diego county. My family is a long time REI in San Diego county (since the 70s).

Not that I have been good at doing this but I suggest you look at local meetups (meetup.com) for real estate meetups that could be of interest to you.  

Also read quite a bit about your areas of interest on this site but realize there are significant market differences in San Diego county than many other areas.  Also not everyone that post is an expert or successful. 

Some advice:

  • Do not forget capital expenses when determining cash flow.   Search for cap expense and you will find some good info but in San Diego costs are higher. 
  • Property management takes some time.  
  • Do not get discouraged if my first advice makes it difficult to find a cash flow property. Be patient and do not give up. They pop on MLS occasionally but most are found off MLS and this can take some effort.
Also I recommend a blog entry title something like you cannot make money on a pig.  I desire you read this blog before you decide on investing in San Ysidro (I do not know if that is your intent).  There is a San Diego region forum.  In that forum I posted my Cap expense estimate numbers and they add up to a lot per unit.  They may not be perfectly accurate but my family has been doing rentals a long time and typically things cost more here.   Also sun wreaks certain wear.   Good luck

Post: Sewer Line Tree Root clogging the pipes Issue

Dan H.
Pro Member
#2 Real Estate Success Stories Contributor
Posted
  • Investor
  • Poway, CA
  • Posts 5,968
  • Votes 6,896

I did it on a SFH in so Cal maybe 5 years ago. The plumber used ABS. I used cheap labor to dig out about 25' for $200 (it took 2 days to dig out). The cast iron pipe was 4' deep until it exited the property and joined the city line at maybe 8' deep. The plumber was $800 including placing a y for easier clean out of other clogs, making the transition to the city line less abrupt, and backfill. It was less than 3 sections of ABS. The plumber's quote including for him to dig out with backhoe was $2500 so using a cheap laborer was worth the extra effort. I do not believe the plumber got a permit.

Post: How to train your tenant to become a great tenant?

Dan H.
Pro Member
#2 Real Estate Success Stories Contributor
Posted
  • Investor
  • Poway, CA
  • Posts 5,968
  • Votes 6,896

The book Landlording on Auto Pilot or something close to that has both the trick of rebating for early payment and the trick about being the "Property Manager".

We do not use the early payment rebate because we do not have an issue.  If they are late without discussing it with us we come down hard.  I have only had one tenant late twice without discussing an issue with us and they were served their notice on the first day allowed.  We have never had someone late 3 times in 12.5 years of having rental properties.  We have only once been unable to collect all rent and that is unlikely to happen again (lesson learned).

We do use the trick of being the "Property Manager". I could easily take the responsibility associated with not letting the tenant get away with stuff or doing tenant requests but I desire to have a friendly relationship. If I say no to a tenant request and the tenant is not happy it is easier to blame it on the owner rather than have any resentment towards me. It is not that I cannot handle the resentment, it is just easier to not have to handle it. In the last month a tenant requested exterior venting for a dryer. Note we supplied a dryer vent box. He did not desire the humidity in the garage (laundry hookups are in the garage in this SFH). "Sorry owner does not want it venting to the front of the unit and it is too costly to vent to the back of the unit." Of course the owner is H3 Properties which is the wife, child, and me.

Post: Buy for renting

Dan H.
Pro Member
#2 Real Estate Success Stories Contributor
Posted
  • Investor
  • Poway, CA
  • Posts 5,968
  • Votes 6,896

I am interested why you chose Detroit.  The economy there has declined considerably and I am unaware of anything that I would think likely to significantly improve the economy. 

Poor economy often results in reduced population which increases vacancy.  Poor economy often leads to placing more people in each unit which increases vacancy.  

Detroit would not be high on my location to invest in RE.  

Post: San Diego Market Resources

Dan H.
Pro Member
#2 Real Estate Success Stories Contributor
Posted
  • Investor
  • Poway, CA
  • Posts 5,968
  • Votes 6,896

I do not know what they use to derive their numbers but Zillow has a 1 year forecast for price and rent.  

There are numerous resources for general economic predictions.  

The UT about a week ago had an article that indicated what rents had increase in the past year in San Diego county and implied that they were expected to continue to rise. The article mostly was about REI buying property and raising the rent and the hardship on the tenants.