All Forum Posts by: James Yoo

Very interesting to hear everyone talk so positively regarding notes. 

We're heavily invested in RE here in Southern California but it's so over-invested that it's hard to make a buck lately. Even with the market cooldown I'm seeing people are still overpaying for investment property, with small margins and even smaller risk mitigation.

It sounds like many of you started off with/ rental properties and then transitioned to notes.

What is a good starting point for someone interested in diversifying into notes? What do you wish you knew about note investing when you were first starting out? Any and all tips are greatly appreciated.

@Kevin Lefeuvre that price sounds ridiculous. $250 just to start the conversation? 

$20K just for plans and permits?

Our architect is charging us $30K to do all drawings/plans/engineering specs/permit for a brand new construction of a two story 4-plex in LA. 

And my feeling is, in this business nobody should be charging money for an initial conversation/quote.

The 3-4 month timeline to get all the plans approved by the city doesn't sound so bad. It might be shorter but they probably want some contingency. I have firsthand experience with the endless back n forth with the LA Dept of Building and Safety. It really drains your soul and holding costs .

I'd say keep shopping. There are some pro ADU builders here on BP. If you want I can connect you to my architect who can probably give you a quote over email. He's done a few ADUs.

I also have a duplex in 90011 at San Pedro & 24th st that is occupied. It went pretty quickly. 

Is this your first time filling an occupancy? I don't mind lending a hand if you've never done it before. Do you have income / credit / background requirements? Charge application fee? 

@Ramiro Aguirre That sounds correct. The ADU allowances were meant specifically for single family homes. If you want to build an ADU on an existing duplex, you'd likely have to file for a variance with city planning.

This is a good starting point as a guideline for building ADUs: 

https://citylab.ucla.edu/adu-guidebook

@Ray Schumacher Thanks, I'll keep that in mind and try not to cry ;)

I do disagree however that you always "get what you pay for". Plenty of people overpay for shoddy work, while some are able to get great work done at a fraction of the cost. 

Hi folks. Does anyone know of a cheap drywaller/sub? We just replaced the entire electrical with brand new wiring, outlets, switches, breaker panel, etc. in one of our properties (3/2 SFH) in South LA.

So lots of holes in the walls to be patched/repaired and finished. 

My go-to handyman quoted a super high price so I'm trying to shop around first. If you guys know of any cheap drywallers please let me know! 

Thanks,

James

 Keep in mind, there's a distinction between B class property and B class neighborhood. 

With that out of the way...I'd say most of Garden Grove is B class. Most of Fullerton is A/B. But expect high prices, Fullerton is high demand due to a hip downtown scene, upscale newer developments, CSUF, quiet residential coves and a beautiful Old Town area. 

I'd agree that much of Santa Ana is B (some maybr bordering C class - have you seen the homeless tents??).  

Tbh I only care about whether property is good investment or not. I have a high threshold for drama and BS, and the high ROI makes it worth it for me. But not everyone is fit to be a landlord, and that applies doubly so in this part of town.

We've been in this area for over a decade and I can only speak from experience. I don't see any truth to your statement about the area getting worse. It used to be a literal war zone. We've had tenants move out because they couldn't sleep due to gunshot sounds. It has gotten much better.  Obviously don't expect a nice middle class suburb. Along Wilmington is still quite rough. But most of the gangs have moved out and been replaced with working class Hispanic families, though some still remain. I'm not saying it's getting gentrified (it isn't). But there's just no denying that it has gotten better over the years. 

Anyway I'm not trying to convince anyone to invest in the area. Just let the numbers do the talking. Plenty of friends/family have lost out on lots of money that other investor friends have realized. Again, it's probably not for everybody. But if you can deal with it, there's plenty of cash flow to realize. I've been an seeing an influx of foreign all-cash investors so cat is definitely out of the bag. 

For me, I'm taking advantage of the slight market cooldown we're now seeing and looking to buy the dip in South LA and Inglewood. 

Good luck, happy investing!

We have most of our properties in South LA. About 20% of our tenants our Section 8. It depends on each landlord's threshold / willingness to deal with Sec 8's BS as well as the drama of people in this socio-economic status, but it's been good to us for the most part.

Now, regarding discrimination...if you have any screening process, it is ridiculously easy to screen out most tenants. It might not be according to the exact "letter of the law" but you need to protect your assets, as the govt is doing virtually everything in its power to screw you. And thankfully you have many tools in your toolset to disqualify applicants.

I do a very thorough background check, and scrutinize the application itself. Note that ANY discrepancy or missing field on the rental application can be used as a disqualifier.
 

I am also calling the tenant's most recent landlord, and (probably more importantly) the landlord before that. 

Why there specifically? I guess if you don't believe there's an impending market correction it might be a good idea. But generally (during a recession/correction/downturn) the luxury/high-end market is the first to get hit.