All Forum Posts by: Jacob Barnhart

Guys, I don't consider bankruptcy an option. I was trying to bring a bit of humor into the post. Sorry, I won't do that again. lol

Basically If I get a short term loan in order to pay for a property and then a year later go to the bank to get the refinance to pay back the loan... what if the market declines or for some other reason I can no longer get a refinance to cover the loan.

Is that just when I throw my hands up and say "well, time to file for bankruptcy" or are there other options?

I know what you are thinking. "Go to the tax assessors office!, or Go to the tax assessors website!"

Well, my county doesn't seem to understand that this information is supposed to be available. (right?) I put the parcel number for my property into the assessors website and the only information it could give me was the name and some sort of assessed value that claims the net assessed value is only $7,600 (It's at least $100,000 if this is based on appraisals like I assume).

Well I went into the assessors office today, thinking surely they can provide me all the information everyone on the internet says I should be able to get from them. Nope. They can only provide me the exact same information.

Is there not supposed to be much more information that I can get from the assessor? Have I just mislead myself or is my county just that unorganized that they don't have their information together?

@Michael Hastings
I'm sorry I just saw this response, but thank you! The information you provided is wonderful.

Just as the title says, I'm looking at a possible first property (constructed as a duplex, but I believe legally it's a single family home due to one mailing address, connected utilities, and I believe zoned as such) and I am trying to figure out all the details I'll need to know to get it purchased. 
Basically Both units are being rented for $750/month all utilities included until January. I know I am not going to renew the current leases when the time comes, but until then I have no way to "owner occupy" the home since both units are currently rented. Is it possible to get the FHA loan in this situation?

Okay, so it is very rare for duplexes to become available within 30 minutes of my area. Because of that, I am making my post before I've even had time to get all of the information because I don't want to waste time and possibly lose out on the deal. This would be an amazing first investment for me.

A home has just been posted on zillow in the past 24 hours (but it says it's been on there for 400 days... any idea why that may happen?) and apparently this home was built specifically for two sisters to be able to live close to each-other, so it is two separate units in one building. 

The problem is that none of the units utilities are submetered, I'm assuming it's zoned as SFR, and it only has one mailing address and mailbox.

What can I do to fix all of these problems? Who do I need to speak to? What might it cost?

Like I said, I haven't gotten to talk to anyone about details yet, so what other problems may you forsee in this type of property?

I am creating this thread as a resource for both myself and anyone else who may happen upon it, so please feel free to contribute! I will try to continue to edit the original post with answers as new answers come in.

(Hypothetical scenario)

I have found the perfect 1-4 unit home for my first investment. What steps would be smart to have completed before making an offer on this property? and How do I go about completing each one?

List thus far:

Determine vacancy rates in my town and that neighborhood specifically.

*How should I do this and what should I know about this step?

Determine an accurate insurance price on this property.

*How should I do this and what should I know about this step?

Determine an accurate property tax.

*How should I do this and what should I know about this step?

Property taxes can often be found on tax assessors website for your county. My county does not have a website for this so I rely as much as I can on Zillow.

Determine crime rates for the area.

*How should I do this and what should I know about this step?

Your police department may have records for crime rates, and other statistics that could be of use to you.

Determine if you want an LLC, other asset protection, or none.

*How should I do this and what should I know about this step?

An LLC can be a good way to protect yourself from the backlash of a lawsuit, but many banks will not give out loans for properties that are company owned.

Set up a checking and savings account and possibly another savings account for security deposits.

*How should I do this and what should I know about this step?

Set these up under your business if applicable. I assume if you do not have a business license this is okay to do under your name, but please correct me if I'm wrong.

Create/Gather all forms such as lease agreements, rental applications, acceptance letters, denial letters, move in/out checklist, pet policy, lead paint disclosure, rules and regulations, deposit receipt, legal notice to pay or vacate, legal notice to comply with lease, notice for landlord to enter property, instructions for move-out, disposition of deposit.

*How should I do this and what should I know about this step?

Visit the neighbors and see if what they think about the neighborhood, or just to meet them to see if they are decent neighbors.

*How should I do this and what should I know about this step?

Talk to the owner of the property and make friends with them if possible and ask them questions such as why they are selling and how fast they are looking to sell.

*How should I do this and what should I know about this step?

This information can often be found on the county tax assessor website or by contacting the tax assessor. 

What else should I possibly be doing before making an offer on a property?

I have very little knowledge regarding much of this (obviously), so please correct me if any of this is inaccurate or just completely false.

I realize all of this does not need to be done before simply making an offer, but it certainly wouldn't hurt.

First, it has always been my dream to be able to move my family out to Santa Monica. Our family has always loved the area. Which is why it concerns me when I read how its impossible to cash flow in that given area.

I've heard from many places that it's just about impossible to cash flow in the very populated California cities. I did a little looking through zillow and rental websites to determine market rents in the area and I found this triplex that seems to cash flow from year one. ( https://www.zillow.com/homes/for_sale/Santa-Monica... ) [Mortgage of only $7200 with rents $8900 and to me it appears the rents are even a bit below market.]

I've seen many properties that seem to have cash flow like this or better in this area - even at the asking price of the seller- and feel like I must be missing something.

Obviously I know I have no way of knowing what all of the expenses are for this property, but it appears at first glance like these properties do in fact profit. Nevermind the fact that it may be a low cash-on-cash ROI due to it's very steep purchase price, which doesn't matter for me if it means achieving my goal.

Does anybody more experienced than me have any input? on whether I am crazy and just miscalculating or is it actually viable to find cash-flowing properties in this area?

Why or why not?

Hi, BP

I have been studying real estate for a while and am still a long ways away from actually jumping in, but after doing some browsing in the area I see a small apartment building that I think would be an amazing first investment.

It is a 6 unit brick apartment, all attached in a single row

It is in a nice neighborhood but the apartments themselves have not been kept up well, so I know I can add value and maybe talk the owners into selling for a good price. It isn't actually for sale so this is mostly theoretical but if everything seems to be able to work out well I have no problem with being adamant about trying to purchase the property when the right time comes.

I have two questions:

1. I know a 6 unit property is considered "commercial" vs a 4 unit which is residential. But how does this effect me? I know I wouldn't be able to get an FHA loan on the property, but what other obstacles would a commercial property come with besides having to pay 20% down?

2. I, for the life of me, can not find any information on this place. There is no apartment name on a sign anywhere, there is no office for me to go into talk to somebody, and there is not an address number anywhere on the property, not even the mailbox. This makes it hard to find any information about taxes or anything else. It's on the highway so the address numbers to either side of it vary by a couple hundred each way. Is there any way to find out the address or any information on this property?

Actually I just thought of a third question as well. Since this is considered a commercial property, would I be correct in saying the price would not fall with home prices if the market was to decline, considering how commercial property value is based on the revenue they bring in instead of the value of similar buildings?

Thank you guys so much for the info!