All Forum Posts by: Jerome Morelos

I used a conventional loan. That sounds like a solid plan but you would need to find a great deal with large value-add potential. Also, it’s likely that you will not cash flow putting only 3.5% down, so you will need to put your creative hat on when looking for deals. Look for properties that you could convert existing spaces into additional units to increase cash flow. 

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Quote from @Jerome Morelos:

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Quote from @Jerome Morelos:

Quote from @David Friedman:

Hi Jerome, congrats on you first investment. I live in Redlands and invest primarily in San Bernardino. Deal flow is tight, but a good deal will pop up when you least expect it if you keep pounding the pavement and networking like you’re doing so just be prepared when the right deal comes along. Nowadays we mostly invest in commercial because it’s less competitive than the residential market and more lucrative if you are creative. 

I'm looking to get into a single family home with an existing ADU or a duplex.

Are you approved for a loan? I'm guessing you would move into the main unit and lease out the second unit? You are going to have better luck in north Redlands. Do you have an estimated purchase price or ROI you are looking for?

I have not yet been approved for a loan. I’m actually currently saving funds but I should be ready around March. I plan to live in the ADU and rent out the main house. After a year I would move out and turn the ADU to a MTR. This is what I did with my first rental. I’m hoping for a 8-10% COC return. I am more focused on equity growth though, so I would like to purchase a “value add”  in a great area with a high chance of appreciation. I’m looking into using a FHA 203k or homestyle loan. My current rental is getting an 18% COC return.. but that’s with a 3.2% interest lol. 

8-10% that will be move-in ready is going to be tough in any market except for maybe the high desert or San Bernardino. FHA 203k could get your foot in the door with a light fixer though to build that equity you are hoping for. Let me know when you are ready and we can keep an eye out.

My rental is in south Redlands/Loma Linda area. I’m hoping to find another in the same location due to its close proximity to Loma Linda University. How is the North Redlands area?

If you plan to live in it, South Redlands is the better choice, but also 30-40% more expensive than north Redlands. A $500,000 house in North Redlands is now $750,000 in South Redlands. North Redlands on the north and east side of the University is very nice. The east and the west side are a little run down, but I don't expect that to be the case forever. More and more high paying professionals moving out this way to work at ESRI.

 Yes, it is more run down in that area. Thank you for the insights, let's keep in touch. 

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I would look for a home with an existing ADU like you mentioned. I also would look into the MTR strategy. ADU's are perfect for traveling professionals. So look for one within 5-10 miles of a level 1 or level 2 trauma hospital. After a year, you can move out the ADU and rent it as a MTR to supercharge your cash flow. This is what I'm currently doing and I also live in an expensive market (SoCal)

Thank you for the suggestions! We're considering MTR as well. Are you able to get consistent tenants for MTR or is it seasonal?

It’s been consistent so far. My home is very close to a level 1 trauma hospital university. Most of my guests have been either travel nurses or resident doctors. The ADU took about 4-5 months from start to finish. This was during the holidays though so there were delays with the city. 

I wonder how far would be "too far" for a hospital. Maybe a 30 minute drive at the most?

I would say < 20 minutes. I used to work as a travel Respiratory Therapist and I would look for places that were 15 minute or less. 

Quote from @David Friedman:

Quote from @Jerome Morelos:

Quote from @David Friedman:

Quote from @Jerome Morelos:

Quote from @David Friedman:

Hi Jerome, congrats on you first investment. I live in Redlands and invest primarily in San Bernardino. Deal flow is tight, but a good deal will pop up when you least expect it if you keep pounding the pavement and networking like you’re doing so just be prepared when the right deal comes along. Nowadays we mostly invest in commercial because it’s less competitive than the residential market and more lucrative if you are creative. 

I'm looking to get into a single family home with an existing ADU or a duplex.

Are you approved for a loan? I'm guessing you would move into the main unit and lease out the second unit? You are going to have better luck in north Redlands. Do you have an estimated purchase price or ROI you are looking for?

I have not yet been approved for a loan. I’m actually currently saving funds but I should be ready around March. I plan to live in the ADU and rent out the main house. After a year I would move out and turn the ADU to a MTR. This is what I did with my first rental. I’m hoping for a 8-10% COC return. I am more focused on equity growth though, so I would like to purchase a “value add”  in a great area with a high chance of appreciation. I’m looking into using a FHA 203k or homestyle loan. My current rental is getting an 18% COC return.. but that’s with a 3.2% interest lol. 

8-10% that will be move-in ready is going to be tough in any market except for maybe the high desert or San Bernardino. FHA 203k could get your foot in the door with a light fixer though to build that equity you are hoping for. Let me know when you are ready and we can keep an eye out.

My rental is in south Redlands/Loma Linda area. I’m hoping to find another in the same location due to its close proximity to Loma Linda University. How is the North Redlands area? 

Quote from @David Friedman:

Quote from @Jerome Morelos:

Quote from @David Friedman:

Hi Jerome, congrats on you first investment. I live in Redlands and invest primarily in San Bernardino. Deal flow is tight, but a good deal will pop up when you least expect it if you keep pounding the pavement and networking like you’re doing so just be prepared when the right deal comes along. Nowadays we mostly invest in commercial because it’s less competitive than the residential market and more lucrative if you are creative. 

I'm looking to get into a single family home with an existing ADU or a duplex.

Are you approved for a loan? I'm guessing you would move into the main unit and lease out the second unit? You are going to have better luck in north Redlands. Do you have an estimated purchase price or ROI you are looking for?

I have not yet been approved for a loan. I’m actually currently saving funds but I should be ready around March. I plan to live in the ADU and rent out the main house. After a year I would move out and turn the ADU to a MTR. This is what I did with my first rental. I’m hoping for a 8-10% COC return. I am more focused on equity growth though, so I would like to purchase a “value add”  in a great area with a high chance of appreciation. I’m looking into using a FHA 203k or homestyle loan. My current rental is getting an 18% COC return.. but that’s with a 3.2% interest lol. 

Quote from @Siyi Tang:

Quote from @Jerome Morelos:

I would look for a home with an existing ADU like you mentioned. I also would look into the MTR strategy. ADU's are perfect for traveling professionals. So look for one within 5-10 miles of a level 1 or level 2 trauma hospital. After a year, you can move out the ADU and rent it as a MTR to supercharge your cash flow. This is what I'm currently doing and I also live in an expensive market (SoCal)

Thank you for the suggestions! We're considering MTR as well. Are you able to get consistent tenants for MTR or is it seasonal?

It’s been consistent so far. My home is very close to a level 1 trauma hospital university. Most of my guests have been either travel nurses or resident doctors. The ADU took about 4-5 months from start to finish. This was during the holidays though so there were delays with the city. 

Quote from @David Friedman:

Hi Jerome, congrats on you first investment. I live in Redlands and invest primarily in San Bernardino. Deal flow is tight, but a good deal will pop up when you least expect it if you keep pounding the pavement and networking like you’re doing so just be prepared when the right deal comes along. Nowadays we mostly invest in commercial because it’s less competitive than the residential market and more lucrative if you are creative. 

I'm looking to get into a single family home with an existing ADU or a duplex.

@Edgar U. Do you have any rentals in the area?

@Andy Pham I used a 5% conventional loan. I actually converted the detached garage into an ADU while living in the main home. Then after 1 year I moved out and rented the Main home as a LTR and the DADU as an MTR, which significantly increased my cash flow. Depending on your market, I'm getting 40-50% more cash flow renting as an MTR compared to LTR.

Hello BP, I'm looking to build my network and connect with other investors in the Riverside and San Bernardino County area. 

A little bit about myself: I'm a newer investor, bought my first rental in Feb 2022 in the Loma Linda/ Redlands, CA area that I currently manage while working a full-time job in the medical field. I have a goal of acquiring my second rental property in 2024, specifically a house hack. I am fortunate to experience great success with my first property, however, with interest rates being higher than what it was in 2022, I was wondering if any investors in my area are finding any deals in this current market condition.