All Forum Posts by: James Stinnett

Hello, late seeing this post. I’m not sure if you have the situation all sorted now or not but I’ll say there is lots of good advice above. That being said I’m a CA licensed real estate broker and full-time property manager, managing around 130 doors. We manage SFRs, condos, townhomes, and apartments buildings throughout Orange County.  As some above have mentioned — it sounds like this condo would be exempt from the rent control and just cause eviction portions of AB 1482 as long as proper notice of this exemption was given to the tenants. I would be happy to talk with you and get more information and give you more advice as well as describe our services, in case you are interested in professional property management services. I would start with rental comp search to get the market rent for the condo and then confirm the AB 1482 exemption and deliver notice if applicable and not yet delivered. Then I would suggest a conversation with the current tenants to see if they could even afford the new rent you want to charge. And then based on all the above — determine your best course of action.  Let me know if I can be of further assistance. 

Hello BP -

I'm looking to connect with a real estate Broker, Agent or Property manager in the Litchfield Park area. 

I own an SFR rental property there and I am considering a sale. I would like to speak with someone regarding current market trends and a valuation of my rental in current condition vs rehabbed condition.

I also would like to chat with any other investors in the area and hear their opinion on the current market and direction and as-is sale vs rehabbed.

Thank you,

James 

Thank you all for your replies!

@Mark Creason - Ah, yes, good point, thank you for that; will do.

@Jon Daniel - Ok, thank you for the offer and info -- I will let my client know this as well.

@Tyler Faison - Ok, thank you for the insights, that helps!

Hello BP -

I'm a real estate broker here in Long Beach, California and I have a client that would like to sell his condo rental, that is paid off, and do a 1031 exchange for a larger multi-family property. We are looking for a 1031 Accommodator in the area that would be willing to meet with us and go over the process and options.

Thank you,

James Stinnett

@Cassi Justiz Thank you for the information! 

For the PMs out there, or for landlords that use a PM. 

Is there a rule of thumb for setting a reserve amount? 

What factors are considered? 

Do most PMs have a company wide policy that owners must agree to on reserve amount?

Any insights would be appreciated!

Thank you,

James

@Account Closed - Thank you for the info!

I have a good friend that is looking to purchase a industrial property for their iron rebar business. There is a property that they like and it is currently in escrow but according to the listing agent it looks to be falling out. The listing agent said that there is a completed Phase 1 ESA but that now a Phase 2 is needed. He said the cost of the Phase 2 assessment is $6K and the buyer would need to pay the entire amount. 

(Here is a good time to say that my 25 years of experience is in residential sales, mortgages, and property management; I have very little commercial experience to speak of.)

My questions are: 

1. Is it normal for a buyer to pay the entire cost of the Phase 1 and/or Phase 2 report? Is this usual negotiable, or are there some customary splitting of costs between Buyer and Seller? The property is listed just under $800K.

2. How are commissions on commercial sales determined, does the Seller or Buyer or a combination of them pay commissions or is it just part of the offer negotiations?

Any insight would be great, thank you!

James

@Nick Colvill

I don't have extensive experience on the commercial side but I do know that each lender will look at 2 main factors when evaluating a commercial mortgage loan - The LTV and the Debt Service Coverage Ratio. They will have minimum LTV requirements as well as a minimum DSCR, typically like 1.20 or 1.25. The DSCR is calculated by taking the NOI (Net Operating Income) and dividing by the annual debt service (which is the total of monthly loan payments, including principal and interest for the year).

If this ratio were to equal 1.00 that would mean that there is enough cash flow to just cover the debt, however lenders want to see it at 1.20 to 1.25 so that there is a cushion.  

There are a lot of people that know a lot more about this than I do on here so maybe you'll get some better comments below, or maybe they'll correct me, and I'll learn something too -- Haha.  Hope this helps!

James Stinnett