All Forum Posts by: Jason Malabute

So at the end of the 2016 year I promised myself that I would stop running away from my fears and get started on my real  estate journey.

I read books, watched webinars, podcasts, and signed up for BP Pro. I told my boss (I work for a CPA firm) of my plans and told her to get me in touch with the right people. She did. I started to research potential markets. I also started practicing how to analyze properties.

The first time I completed my application the broker didn't even process it even if I had a big money down ($200k) because my monthly income was not enough to support the loan. In the past I would have given up here and went back to "finding a higher paying job". This time it is different. I am determined because I realized that real estate is my purpose in life. Moreover, all I could think of was the quote in Rich Dad Poor Dad where he says "you get rich from building financial intelligence, and you build financial intelligence by solving financial problems. The bigger the financial problem that you solve the financial intelligence you build." So through research and posting on BP I learned that you can use 75% of the income from the second unit to get pre approved.

So I relayed this information to the broker. He said that this will help but is still not enough. So to solve this problem I talked my mom into being a co-borrower and proceeded with the application process. A few days later my broker told me that he met a lender that is a better fit for me and encouraged me to apply with new lender. To make the VERY long story short I got pre-approved later on that night for $647k with $200k down. I was on top of the world.

The next day after work the lender emailed my broker and told him that there was an error and that they are actually just pre approving me for $447k with a $200k down. That is a $200k loan decrease!!!!! In a market like LA its going to be more difficult to find a duplex or triplex for that amount.

Furthermore, I found 2 duplexes in my area for less then $600k (1 a month ago and 1 a few days ago) on Zillow . However, the agent is claiming that both properties are actually listed at a over $1m. This makes no sense to me. How can the listing be that much different from price on Zillow? Also isn't the price of properties supposed to go down the longer they are on the market (not go up)? 

Has this happen to anyone else?

Lastly where in LA do you guys think I should look at for properties under $600k that will still CF? We are considering neighboring cites to my desired sub markets.

I REFUSE TO GIVEUP. 

Thank you.    

 Sorry for late response. I got a new computer. This is great. Thank you.

 Thank you. This helps a lot. My goals are: find a duplex in my target market (Culver City, Silver Lake, or Hollywood area). I need a cash flow of $ 200 for the second unit. Price range $600-800k (closer to $600k). $200k down. 30 year loan. Fixed interest.

I am in the process of trying to get pre-approved. My lender said he'll introduce me to the agent that he works with after I get approved.

As per the annual income growth, annual PV growth, annual expense growth, and sales expense will not affect the calculations and projections right? 

 "BP members can be very helpful when it comes to things like: "In that LOCATION, Insurance will likely be double your figure" and so on. While you're just practicing, don't get bogged down." Thank you this is gold! This is becoming clearer.

So are you saying just take an educated guess but before making an actual offer make sure you confirm your numbers with an agent?

Lastly, if you were in my shoes where would you get an estimated numbers if you were just "practicing"?

Since my last post I have been taking action practicing with the rental property calculator  to analyze properties. I have also watched both webinars on analyzing properties (they really helped). However, I am still having trouble with the following  figures and numbers: 

1. Closing cost

2. Points charged by lender

3. Other charges by lender

4. Utilities

5. PMI

6. HOA

7. Insurance

8. Garbage

9. Other monthly expenses

10. Repairs

11. Capital expenditure

12. Annual Income Growth

13. Annual PV Growth

14. Annual Expense Growth

15. Sales Expense

HERE ARE MY QUESTIONS:  

A) For each of the above can I find the amounts online or do I have to call the utility/broker/insurance agent/property management company to get estimate figures of each of the items listed above to plug in the calculator?

B)  Since I am trying to look for a rental in LA and LA has so many sub markets do I have to call the utility/broker/insurance agent/property management company to get estimate figures of each of the items listed above to plug in the calculator whenever you switch submarkets?

C) If you do have to call these different people for all these figures then how does Brandon say that the analysis process only take less then 30 min per property?  

D) If you can find these amounts online for your market how do you know that it is accurate?

Thank you,

Jason

Thank you all.

 Thank you John. This is very helpful.

I have read  The ABC's of Real Estate Investing by Ken McElroy and he does advise that you request the current rent rolls and 12 months financials.

I will check out the webinars and 2 other books.

Thank you. 

Hi All,

I JUST UPGRADED TO PRO!!!!

I am a first time investor. I want to practice and analyze rental properties using the BP calculator. My goal is I want to master (or at least practice) analyzing duplexes so many times using the BP rental property calculator that by the time my agent starts giving me leads I'll be comfortable analyzing properties quickly and accurately.

GOALS: 

Analyze 3 sample properties a week.

QUESTIONS:

1. Where can I get sample property numbers (besides purchase price) to practice with?

 2. What figures (income and expenses) must I include in all my analysis??

3. Since I am a first time investor how do I assure myself that I am analyzing my CF and other projections correctly and accurately?

Thanks.

One of the markets to buy my first duplex in was/am (kinda) considering is Hollywood CA (NOT WEST, NORTH, OR EAST). I'm talking about somewhere near the clubs, bars, hotels, and businesses. Prior to my market study I thought Hollywood would be a great idea because I am always going out and see a lot of young professionals and those in the entertainment industry in the scene. Hollywood has a real diverse crowd.  Also, Hollywood has one of the highest rents in the nation ($3110.30). However, when I was doing my research I found that the average income in Hollywood is $40,000 (annually), most residents dont have a HS degree, robberies are higher than national average, spending are lower than national average, etc. Obviously there are many pros of the Hollywood market as well.

However, for argument sake please see questions below:

1. Are my study of the market accurate? How is the rent in Hollywood so high if the average income is so low?

2. Does anybody here own a property in Hollywood and making a positive cashflow (>$200)?

3. Is Hollywood a good market for rentals (duplex) in your experience (not opinion)?

4. Any last advise about the Hollywood market?

Thank you,

Jason

 Thank you this help a lot