All Forum Posts by: Jeremy Brown

Yeah 3/9 looks as good as any day, for me.

Monday and Thursday evenings will work for me. 

Pete,

I'd be interested to help you look. I live in Folsom and have been studying the city closely - mapping out and visiting all the neighborhoods to learn all their pros and cons. I've learned all kinds of interesting things even after living here for several years. There are a few pockets that are relatively affordable, but you may have to be patient and act quickly when something becomes available.

cheers,

Jeremy

I haven't seen one, but I'd be interested. Most of the others are rather inconvenient, for me.

This sounds like it would apply to the city only. So, Rancho Cordova, Carmichael, Citrus Heights, Fair Oaks, West Sac, and all the other cities and unincorporated areas of the county would be unaffected.

This seems like it would make a crazy distortion in the rent marketplace with only part of the region having rent control. It looks like only 1/3 of Sacramento county's residents live within the city limits and Yolo, Placer, and El Dorado are all part of the broader set of options for living and investing in the area.

I'd like to think it doesn't have much chance of success - some of the groups getting together to oppose it are quite powerful. On the other hand, I've been hearing a ton of talk about increasing rents and wishful thinking about rent controls among people who think that imposing rent controls will help them find a cheaper place to rent.

You have a contractor/realtor who brought you a deal and a referral to a hard money lender? It sounds like this person had the whole deal assembled, so why involve you at all? From what you've said so far, I don't think we can properly judge whether you have a generous mentor or someone trying to take advantage of a less-experienced investor.

What's your expected ARV? If it's realistically $900k, then I'd be pretty happy with the arrangement. If it's $700k, I'd be more concerned.

Two suggestions:

1) Don't try to use the CAR forms. They're written with a very specific type of transaction in mind, and this isn't it. Trying to add enough addenda and modifications to force it to work will give you a butchered, hard to read contract. I don't have an alternative to suggest, but you're probably better off with any boilerplate contract for purchase you can find out there that has some sort of explicit assignment clause.

2) Check with the California Association of Realtors legal hotline. I wouldn't expect them to walk you through doing this transaction the right way, but they ought to be able to give you guidance on what things to avoid doing in order to keep yourself in good standing with CAR.

1) None. Make sure your purchase price leaves room for any needed repairs. I almost always prefer to be responsible for the repairs, to have them done the way I want. For example, we bought a duplex that had a pest inspection come back with several thousand dollars of suggested repairs. The seller gave us a discount and we hired a handyman to fix the important stuff for a few hundred bucks. Win!

2) Generally let it wait until turnover. I like to fix everything that might need it at turnover and err on the side of overdoing it to help attract better tenants. I've heard some advise to go fix one or two little things when you buy to make you seem like a nice guy. That seems reasonable, but I haven't done it yet.

3) Fix if it doesn't work (broken disposal), has a risk of further damage (leaky plumbing), or is a habitability issue (mold). Otherwise, the default answer is no, but in reality is negotiable and I'm willing to deal with some nonessential repairs to keep tenants happy (blinds aren't working well).

I find I go in cycles that last several weeks or months. Typical will be 7-8 hrs/night, but once or twice a year I can go on a binge where I'm getting 6-7. It usually happens along with a spurt of personal growth, such as staying up late reading some good books or working on some new project. But, I always go back to more sleep eventually.

As a buy-and-hold, I'll do the math to calculate cash-on-cash return, and that's a primary factor. But, 10% CoC buying something in good condition off MLS is not the same as 10% CoC buying a dump wholesale and fixing it up myself. For one, there's going to be the cost of an extended vacancy and/or making it vacant to get the work done. This is hard to factor into a CoC return because it can be so variable. 

Also, as a buyer, I'll expect to have some return for the risk and effort I take on by doing the rehab. I'm not going to jump on a property selling at a $25k discount when it needs $25k of work. Basically, when buying a fix-and-hold, I'll expect it to look like a flip and a rental in one. I might accept less profit than a flip would typically create, but will want some financial motivation to do that rehab.