All Forum Posts by: Account Closed

I will tell you bashers what, why don't you buy a nice second residence in the Central Valley in a nice neighborhood and have it broken into three times before you even move in and then tell me how you feel about low income areas and the people that are in them.  On top of that I hire a security expert that recommends that I get a safe room because the Central Valley has a high incidence of home invasions and burglaries where they kick your front door in! Also there are a huge number of Mexican gangs in the area that will steal anything not well protected.  So after the consult I have a bullet resistant hidden safe room, security  cameras with back ups, alarm with back ups and electric fence around the inside of my backyard fence and many other security features just so my wife can feel somewhat safe.  On top of that I was told not to leave my garage open or work on projects in front because criminals patrol good neighborhoods looking for a mark to steal from.  Sorry if I come off as prejudice against poor people but if you had to deal with this crap you would be fed up too.  At my house in Danville I can leave my garage open all night and all of my tools and toys will still be there in the morning. I know because my garage door opener remote malfunctioned leaving it open all night twice!   Where would you rather live? I picked the nicest area I could in this Central Valley town not knowing nice areas are a magnet for criminals looking to rip you off.  On any given week in this small town of less than 20,000, 4-8 cars will be stolen, 3-6 burglaries or home invasions will occur and lately one or two hold ups at gunpoint, this week the bank for the third time this year.     It's so nice that I was so well supported here. Thanks

Where is the edit button? I hate when I am in a hurry and the iPad auto correct changes the words and I don't catch it until its posted.

Thank you!

Try Bank of America, we are currently pre qualified for our new home loan and a rental home loan through them at the same time. They have been good to us because we keep a fair amount of money in their bank and have done other loans for us in the past on both our residence and rentals.

Originally posted by @Sandeep S.:

Thanks @Amit M. for sending that pointer. It sure has some serious food for thought and even more entertainment! The discussion there is particularly relevant to me as I have been (and still am) a California investor who is lately investing in Texas.

70% of that thread is full of BS (relating to weather, lakes, immigrants and so on). It may not be BS but has little to do with investing. (btw - I love to live in California ;)

Here are my takeaways and point of views (relating to my investments):

- I believe one can make (or lose) money in almost any market. It is really about knowing the local market, buying right and zillion other factors that go into making something a good investment. I am sure that there would have been tons of people who lost their shirt investing in California during the last decade.

- I love California (esp. bay area) fundamentals for appreciation (both values as well as rents). That is why I am not selling any of my local investments to buy in Texas. It is however true that I am not actively buying any more in CA either.

- Instead of selling, I am taking *some* of the equity out of the massive appreciation my CA investments have had in last 4 years, and deploying that in Texas market. This is very different from the OP of the other thread.

- I have a specific investment strategy for which I have found Houston to be perfect market to try out. Given that I am just 6 months into it - it is too early to tell whether it's working or not. But so far, knock on wood, pieces are falling in place. And it is entirely possible that I may have underestimated some of the expenses, esp. the foundation issues that may arise in future. I have some margin for error, but if foundations of all my properties start shifting in exactly 12 months while the next hurricane is busy taking all the roofs out- I haven't planned for that much error! Bottom line - there are risks. But that is natural for any investing. And I have plan B, and then a plan C.

- Again, I have nothing against CA market. I bought as many properties I could possibly buy in the last 5 years here in Hayward. But for my buy-and-hold-forever-for-cash-flow kind of strategy - there are not any local options left. I sometimes wish that the 2009-2011 kind of prices hung around few more years ;). And then I am not as creative as many of you to be able to add significant value to a local property. And my full-time day job is not very helpful that way...

Summary: Out-of-state investing has many additional risks than investing in your backyard. And CAP rates, as advertised for mid-west or south, rarely turn out that way in reality. So one needs to proceed cautiously (with lots of margin for error).

 Well I am glad I could entrain you all and could be the butt of your jokes.....

I am from Danville/San Ramon Ca where low income people can't afford a place anywhere near it so it's a nice place to live  and moving to a place in or near The Woodlands TX where once again the only low income people around are doing my dishes.... 

It was my thread, I make the topics in it, if you don't agree with it don't post in it or read it. I am not just investing in this area i am moving to there so everything in that thread is relevant. Obviously you haven't been to The Woodlands Texas so you cant say the place is not nice because it is more beautiful than any place in California to live, it's where the rich people of Houston go to have a nice home with resort like living.

That was the last thread I will ever post here, My friend Scott that has over 300 units told me to to get too involved with this place and do my own thing like he has always done. He was right....

Although I agree the system can be abused, coming from California Arkansas looks like a landlords paradise. I need to look into buying some rentals there, in fact my wifes parents live in a small town there during the summer months. They picked up a nice 3-2 on half an acre for 30,000 and the acre lot next door for 5,000!

First of all thank you to all of the positive responses to my post. 

Potentially if we invest 100,000 dollars, those homes in that range rent for about 1,300 a month so at that point we only have taxes and ins to pay for. That would up our 400 a month now to probably around 1,000 per month profit. 

We only owe 49,000 on the mortgage for this house.

This is a hobby to me so I don't count what my time is worth. I truely enjoy fixing these homes up and take pride in having a really nice home to rent out to great tenants. I we get and keep good tenants because they have a very nice house to live in at a good price. If I am not working on a home I will be doing one of my other many hobbies that cost me a lot of money like working on my Hotrod, a long block engine for it is 25,000, a transmission 12,000 etc.

I had zero vacancy during the time this home was rented because it's the nicest home in the neighborhood at the same rental price as the rest of the homes.

It took me one month to gut and rehab it costing me 429.00 dollars on the note with taxes and ins. It will only be vacant seven days before it closes so we will not lose much there.

I buy houses with broken foundations, that is one thing my father taught me to fix and I have all the tools to jack homes up and the lasers to level them. It's no more work for me than ripping out a kitchen and putting in new cabinets.

I will be taking the entire cash payment from this sale and putting it into the next rental in Houston so the 1031 should workout fine. Later I may pull some money back out for the next house but not much so I can stay on the safe side.

Right now we try to put down enough on each rental so the mortgage, taxes and ins is no more than 500 dollars a month. We can afford to have a couple of those sit empty at all times this way and not worry about money at all.

I will update this tread when we have the check in hand, what ever the amount is, its enough to pay cash for some home in Houston with no house payment.

We chose the area of Houston we did because other areas in Texas or other states were either too hot and dry or it snowed and rained too much there and we both hate snow and bitter cold!

Jay, I started my first fitness center in Napa on Second street with a chiropractor and did that there for five years before opening a new place in Danville. I love Napa Valley and the cool mornings in the summer ( I used to watch the hot air balloons take off every morning from my house in Browns Valley) but there is not much to do there outside of the winery's restaurants and outside fitness related activities. 

Originally posted by @Mark Ferguson:

@K. Marie Poe.

I was thinking the same thing! He didn't make anywhere near 109k. I would estimate the figure is closer to a $70,000 profit after commissions, closing fees, repairs and loan costs. Plus the house hasn't closed yet, many issues could come up.

Another thing I find interesting is a complete gut job only cost $15,000. Maybe if all the labor was done by the OP.

 You guys can think what you want, my seller's net sheet says 109,000 after all expenses, it will be very close to that. I just checked their numbers and they are right, I did leave out the 15,000 for the rehab but the rent netted 15,200 so that's a wash.

Yes I do all of my own rehabs since this is more of a hobby to me and my father thought me to do anything on a house right down to fine trim work, tile, electrical and plumbing when I was young.

Our residence will be next and it should net close to 200,000 in cash to us after expenses. 

California is taxed to death and there is no end in sight, look at vehicle fees, a new car can be around 1,000 dollars for tags the first couple of years, heck I have a 1956 VW that costs 86.00 dollars. In many states any car new or old is under 50 dollars to register. Texas I believe is 47.50 for any car even a new Ferrari. For businesses there are fees for everything, they even charge a storage rack fee for repair shops! My sister has to pay a septic tank fee of 200 dollars every year on her newer home yet my parents on the same ranch pay nothing on their old homes tank.

For the most part our wanting to move is about being around nice people in a nice environment, like California was 40 years ago in smaller towns. The whole Central Valley CA is one big cesspool, you can live in a very nice area but a mile down the road there is always a bad area. You always have to worry that someone is going to see what you have and rip you off. 

I have a really nice newer home in a town called Patterson, it's a small town of 20,000 yet every week there are 5-10 stolen cars and many break ins, they like to just kick your front door in grab what they can and be gone in minutes. In Danville I can leave my garage open all night and all of my tools will be there in the morning! I know because I have accidentally done it twice. The house in Patterson I don't even leave my garage door open so no one sees what I have in there. I am done living like that and can't wait to live where I can leave my things outside without worrying they will get stolen. 

Originally posted by @Account Closed:

Congrats on selling quickly and profitably.  This thread has become about TX rental investing.  Very interesting, but not as interesting to me as the math on your deal.  You said you made $109K.  Did you mean your proceeds from the sale will be $109K.  I get an all in cost of $87K, plus sales commission and closing costs of at least $12K.  So $99K, and you're selling for $175K.  That's $76K in profit not accounting for any other costs.  Even in you add in 36 months at $400/mo cash flow, that's only $90K.  What am I missing?

 We only owe 49,000 on the property. If we don't do the 1031 we will owe 5,800 in taxes and if we found a property for 100K we could pay cash and rent that for 1,300 a month with no loan on it at all so what is the risk? It looks to me like all I have to pay for is home owners insurance and taxes.

Speaking of this great state of California, did you hear they are going to try to make a law to tax investors up to 25% on flips or properties held under five years? If you keep a house even up to five years they will still hit you with a 14% tax, try making money on flips when that happens.

Also last night they said on the news that they were going to impose a new gas tax of 20-30 cents a gallon to pay for the high speed rail project and other infrastructure. I can't get out of here any faster!

The key to making it in Texas is to not over leverage yourself, have more equity in a home so you can afford to rent it much cheaper if need be and still profit and a few other things. I am at a point in my life that I don't really have to work and that allows me to not take huge risks like most people trying to get into real estate. I am not in a hurry to aquire huge amounts of homes and will for the most part pay as I go. That being as our investments bring in money we will save it until we have enough to buy the next house.

We are moving more for the wonderful area to live in with a beautiful woods everywhere and the nice respectful people that live there. Investing is just a side benefit for us, where else can we get a beautiful home in a place where people love and respect each other and the people are into fitness like us for one third the cost of homes in Danville California?

The weather is only really humid though the summer months, spring, winter and fall are beautiful in the Houston area. Someone mentioned a drought? It just rained last week and there is water everywhere in the Houston area so I'm not real sure where you got that info from. Look at the forecast it says 30% chance of rain Tuesday, 40 Wednesday, 30 Thursday and 70% on Friday next week.

I have been studying Texas for years, I found a nitch market in Texas that will make twice the money of my California homes and no I'm not telling anyone about it. There are way too many people running to Texas to invest right now and I agree that property taxes are high there. Typically a 300,000 dollar home will have around 9,500 a year in property taxes! 

In my current newer residence taxes here in California is not much better since I have to pay about 4,000 in property tax and then another 4,000 in melloroos tax on top of that, if I had HOA fees it could very well be 12,000 or more.

Finding a nitch market is what I do, I am also a photographer and most of them don't make much money but I found a market that pays me 250 dollars an hour and that is a cheap price! I travel all over the world with all expenses paid on top of that pay, that rate also includes any editing time I spend as well once I am back home.

The main reason for the move is that I am from the Danville San Ramon California area where there are very nice people that are into fitness, everything there is clean and people with bad habits or criminals can't afford to live anywhere near that area.

We found an area just like it in Texas with people even more friendly, the place is more beautiful than in Danville, its much bigger and the homes are half the price of Danville. There are running trails and gyms everywhere, there are lakes all over for water sports so it's nicer than where we are from. 

Also my wife can work from anywhere in the world and will make the same money where ever she chooses to live. Overall it costs about 33% less to live in Texas than California, taxes here are out of hand and they are going to get much worse very soon. This is a welfare state with more people on public assistance than there are workers. I am not ok with paying for some bum to lay around while I pay for it!

Now i dont want to sound like I am a racist or anything (my ex wife is Mexican and my wife is Japanese) but our govener moonbeam has said that all of the illeagals can come here, stay and get all the free handouts they need! I am not paying for that! Then there is the increase in the minimum wage that will raise prices on everything and cause more people to be out of work. We have that high speed rail train to nowhere project that has cost billions and they don't even own any property yet! There are more uneducated illeagals trashing up the state every day (do you think poor people that live in a shack with a dirt floor and blanket for a door and don't even know how to use a toilet will leave their bad habits in Mexico?)  I could go on and on but I see the writing on the wall and I am getting off the wagon before it goes over the cliff......