All Forum Posts by: Jian G.

average around 18k a month 95% received throughout covid one did a partial for one of the month and catching up, got lucky and my business double in sales during Covid, can't complain at all.

0 Votes

Hi, I have some questions about new tenants law in California.

We are in escrow for duplex. Rents are below market and I would like to do a remodel and raise the rent.

My question is can I ask current seller to remove tenants before closing? They are on month to month lease. What are the way to move them out? One side of the duplex seem to be active gang members, the other side is good tenant but they are $500 below market rent. I would like to keep them since they keep the house nice and it’s in good condition it was built in 2007z. The side with the bad tenants are build in 1950 and needs a lot of work, and it is $800 below market rent. What is the maximum I can raise rent under the new law? California is 2.2 CPI plus the 5% so I can increase 7% a year? I would like to keep the good tenant and just keep raising the rent every year if possible.

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Originally posted by @Jim D.:

Of course none of us know the timing of the next downturn or its severity, but run the numbers on this scenario:

You buy a property today. It appreciates at 5%/year for two years, and then a downturn occurs which over two years drops prices 15% from their peak (this would be a fairly bad downturn by historical standards). So you end up down 5% on the price. But... you also paid off around 2% of your mortgage each year for 4 years, and collected some amount of cash flow from the property... so you actually came out ahead in this scenario compared to letting the cash wait in a bank account.

The biggest challenge with waiting for a downturn is when prices are dropping, how will you know that it's time to buy? You might buy and then watch them fall farther, or you might wait too long and not end up buying right at the trough. It's easy to look back and imagine "what if I would have bought 10 houses right at that month" but in the thick of a nasty recession it's a lot harder to know when that moment is.

I am buying now and will be buying whenever the next downturn is.

The market we had success with have increase value 300-500% in the last 8 years. We are still not comfortable investing in distant market we don't know. Maybe its time to educate myself more like some suggested. :)

1 Vote

Originally posted by @Edward Liu:

Palo Alto, CA would not meet my/most people investment standard. 5 deals in 4 different cities. I have investments in those cities already, just expanding portfolio.

that's what I figured, median price home is like $3m there

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Originally posted by @Matt Ayoub:

I am currently on the sidelines but then again I live in Southern California where property hasn’t cash flowed in years and invest out of country vs OOS. If rates go up meaningfully or the stock markets plummet I think it’s likely we will see some buying opportunities.

But with the economy doing well and mortgage standards tightened we are unlikely to see a major drop. I am now seeking investments outside of real estate to balance my portfolio. Real estate is ultimately local, so if there are opportunities where the numbers pencil out and you have a longer term horizon I would not hesitate too much. But in most major metro markets I would not count on much short term capital appreciation at this stage.

I am in San Diego and I can still find a lot of deals that can cash flow. The problem is the ROI, getting $500-700 a month on $200k cash is just not meet our investment goal.

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Originally posted by @Edward Liu:

There are still deals to be found, just harder right now. Key for me is don't compromise my investing standard - don't 'chase' a deal even if everyone else is going crazy in some markets. As long as every one of my investment is based on good fundamentals and numbers, then even during downturns, I would not be worried. Even if market falls by 15-20%, as long as my properties are still cash flowing, it is only paper loss.

I am wrapping up 5 deals in the coming 2-3 weeks. So definitely not hoarding cash. However, I don't over stretch my cash, so there is still plenty in reserve if things went south.

is your investment in Palo Alto?

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Anyone preparing for the next crash and strategize on how to maximize return on the next cycle? It's getting harder and harder to find good deals it seems. A lot of sellers are priced at that "perfect" asking price. For those who are hoarding their cash and waiting for that big move, any advice? We are thinking about cash out refin on all of our properties since most of them have very high % equity in them and along with holding off of any investment now so we can have a large sum of capital to buy when the market adjust itself. I know it's hard to speculate in the real estate game and i know when we buy high and have enough CAP EX we can get through the cycle. But the point is maximizing the return and it just so tempting to just hold off. What's everyone's thought on this?

3 Votes

@Brian Garrett

I agreed with this. Wait until the market crash and educate yourself as much as you can. Personally I would find a good local bank, develop a relationship with them and talk to them about your plans and when you are ready you can finance with them and buy as many good deals as you can with financing.

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Originally posted by @Dan Schweit:

Originally posted by @Jian G.:

@Dan Schweit

It’s not easy but they are still out there both Los Angeles and San Diego.

Jian, I appreciate the response as well. Im intrigued by your answer and would love to know a bit more. Obviously not looking to tap into all your secrets, but some more valuable insight would be fantastic.

I have friends in LA that were able to get decent cash flow properties from 2-7 units with a larger down payment and being able to lock in with a mid 4% interest rate. I know they work with a lot of brokers and get off market deals. Here in San Diego I think there are still some 2-4 units that cash flow decent. I haven't have much luck with 5+, the ones I found I was always one step behind and they were already in escrow. My plan is to meet with more brokers and see if I can find something decent in the 5+ space.

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Originally posted by @Danny Grey:

It does NOT allow developers to demo single family homes to build new multi-family though.

Are you sure you cannot demo single family homes to build new multi-family? I think it depends from city and each county right?

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All Forum Posts by: Jian G.

Jian G. has started 14 posts and replied 99 times.

Post: Are you receiving rents since lockdown?

Post: Tenant’s law question in Californa

Post: Who’s hoarding cash and waiting for the next crash to be here?

Post: Who’s hoarding cash and waiting for the next crash to be here?

Post: Who’s hoarding cash and waiting for the next crash to be here?

Post: Who’s hoarding cash and waiting for the next crash to be here?

Post: Who’s hoarding cash and waiting for the next crash to be here?

Post: Noobie inherited 1 Million Dollars

Post: Where to find positive cash flow properties???

Post: Selling Cashflowing Homes in Midwest for No-Cashflow in San Diego