All Forum Posts by: Jonathan Taylor

@Ruddy Anthony Salazar

Brilliant Idea sir!

My operational base is silver lake so DT la

I can only meet weekends at any time. 

Frequency, 1-2 times a month.

Cheers and hope to see you soon

JT

Hi BP folks,

Since I've gained so much from the purchase and rehab stories here I thought its my time. Here are the details of my project. This will be a Buy Rehab rent, I will NOT refi. Details below. 

My goal for this property is to replace or lower my current rent of $1500/month to get into a property that WILL cash flow once I move out. 

Listed as a triplex, asking 850,000 ( this is in LA so those of you from PA or MO, thats the going rate for multiplexes here)

3/2 main house, 1300 sq ft. ( I will live in this one)

duplex contains two 1 bed 1 bath, approx 450 sq ft each. 

SURPIRSE! Also contains an unpermitted garage studio conversion. approx 300 sq ft. 

One unit will be delivered occupied paying 1200 month. 

Rehab time:

6 weeks. New flooring, kitchen and bath for the vacant 1/1, studio will be rehabbed but depends on permits. Stand by on this one. 

Known problems are:

Sewage pipe needs to be snaked every 6 months, might need a new system

The existing tenant was described as a "pain in the ***". This is rent control so as a landlord I have little power here but I've only spoken to the current owner so he could be incorrect.

Loan details:

20,000 down, 

830,000 over 30 year at 4.25% * ( see below for loan details)

monthly payment 5250

pro forma income at fully occupied units

1/1: 1200

1/1 1800 (rehabbed)

stuido 1100

total: 4,000

out of pocket each month 1250. That is a win here!

prelim rehab cost: 80,000 (if needs a new sewer system)

This is an ongoing project as I hope to enter escrow tomorrow or Wendesday. Will be updating as I progress since Ill be in a 45-60 day escrow due to my loan limits. 

* Im using a program called NACA which allows me to put less than 20% down without PMI. For those interested PM me. Its not for the investor but for the beginner.

@Joseph M I couldn't agree more as if Prop 10 passes its a short term win for renters but there wont be any incentive for property owners to rehab their properties. It doesnt make sense to me any way you slice it. Do you own in LA? If it passes will you sell and move your portfolio elsewhere?

Hi BP folks!

Im in escrow for a four unit and my other GCs fell through (not licencsed/shady folks) anyone have someone who they can recommend? Ill need to do medium rehab on 2 x 1/1s and a studio approx 1300 sq ft in total. kitchens/bath/floorings probably some electrical since its an older building. PM me or please send me someone who can help. I hope to close in 30 days. 

Thank you in advance

@Josh Howard I'm in the same boat but I looked at the math differently. I see what I can get for what I already pay in rent. Cash flow in desirable areas is not achievable to a newbie investor. I have been analyzing for almost a year now and haven't found anything that works in an area I want to live in until a triplex came up that costs me $1100/month with fully occupied units. Im in negotiations now so hopefully it will close. 

To out of state folks, that seems high but in LA you cant get anything decent for that price close to downtown. Just ask yourself how much out of pocket is comfortable to you and just bank on 2 of the 4 wealth generators. Appreciation and loan pay down. 

@Alex Shin I know that area as I work there often. Dive deep into tenant laws and look up prop 10. It’s on the ballot in November that would make it ever harder for landlords to raise rents by restricting the percentage a landlord can raise rents AFTER a tenant moves out. I agree with all who have commented. CA is not friendly to landlords and pad your numbers because the property tax and rehab are much more than you expect. Good luck!

@Alex Shin I agree that there are a few things you’re missing. First. Rent control if tenants are in the properties it’s very difficult to remove them to get rents up to market. Talk to an eviction lawyer as it’s conditional on how to do it Second, revisit your insurance costs because of the wiring is not up to date (most la properties are 1910-1940) insurance will not cover you. Third, it’s already been discussed here but rehab costs are much higher here. If this is the unicorn then congrats man but I’m in the same boat. My deals just have NOPE written all over them. Keep us posted on your progress.

@Jordan Feiner Ill PM you the process Im going through, its not easy but it is proving to be worth it in this market. Also, this is a single loan program, I will not need a second loan. 

@Dennis M. it is crazy isn't it? But between paying 2000-2500 a month for rent OR getting in on thin cap rates, what would you choose? Its a rock and a hard place in Los Angeles. 

@Jerimy Justice I am looking elsewhere I just want to have my rent money going somewhere aside from paying off another investor's mortgage. This will be my only property in CA. Im buying OOS next year. 

@Nate Burgher the value add is the lot is large enough to add an airstream in back, add a storage locker since two of the units are super tiny, so they aren´t huge, just passable to maybe give me an extra 550-700/month which would almost give me free rent. I agree with living in the worst one and rehabbing them as I go. The front 3/2 is already rehabbed so its the back two units for some value. I understand this isnt a steal, but it gets me in the market in LA. Thats something for anew investor or am I aiming too low?

@Nate Burgher Ill be living in the property as this is my first step in the real estate world. In LA living for free is close to zero so 900 out of pocket is a win. So yes, from an investors perspective this is not great but in LA its way better than paying 2200 for a 1/1. I appreciate your input just this market is very difficult for newbies to break into. Aside from the market specific details was there anything else that jumped out at you?