All Forum Posts by: Jodi Low

@Dan Wynn thank you this video is gold for me right now!!!

@Adam Cornell I had not heard about that. I will definitely look into it and appreciate that lead certainly. I’ve heard new construction numbers are around $130 to $170 per square foot in the Portland area do you have experience or knowledge with this?

@Mike Bolen thank you for the additional feedback and clarification. My question about the 1% gross cash flow and losing money is more about the fact that the property is currently owned free and clear so I don’t see how my friend would be losing money. I understand that he’s losing money in a missed theoretical opportunity of investing in other higher cash flow properties elsewhere. This may seem like a “no-brained” for more seasoned or less risk adverse individuals. At this time though with the experience he and I have he’s not prepared to do that yet.

So the scenario I present is the one that he is comfortable with. I do appreciate the additional perspective to think about ideas for the future after he becomes more seasoned. It’s especially daunting considering purchasing something in an unknown market and out of state. I’m hoping as we gain experience that this will become more of a reality because it definitely makes a lot of financial sense.

@Jesus Castanon thank you so much for your feedback and clarification as well as your two cents which supports Mike’s position. As new investors it feels daunting to consider properties in an unfamiliar area. So at least for now they need is for the most immediate cash flow. Are you familiar at all with rents in Napa and that specific neighborhood? I am curious if you have any opinion on how easily it will be to rent the property.

@Mike Bolen thanks for your feedback. Would you explain what makes this a “garbage” area specifically? Also since the property is free and clear it seems to me that investing a small amount is prudent to get it to cash flow to then get the money out 5 years down the road.

Where does the 1% of value formula come from and what is the theory behind it? Just trying to learn everything I can.

Thanks again for any insight or resources.

Thank you for clicking into this feed!  I'm excited to make new connections here on BP.

CURRENT PROJECT:  I have a great opportunity to learn more about the industry and gain experience by helping a dear friend with a newly inherited income property.  Neither of us has done anything like this before, although he has some basic experience with construction/remodels.  The property is owned free and clear, in a rural unincorporated area of Napa that is transitioning. The current plan is to hold, take a cash-out or hard money, address deferred maintenance and rent.  I will be posting here often to get advice as we move forward, and for now, I am looking for referrals to good licensed contractors, to make connections in the Napa area and any advice on assessing market rents after improvements.  

DETAILS

SFH: 2 story, 2bd, 2.5 bath, 1900 sf, 2 car garage, additional shop or storage area, river view (flood zone)

Estimated current market value:  $5-600K 
Comps have been tough as it's a unique area with limited comparable properties for sale. Updated turnkey properties in that neighborhood have sold for 700K-1.5M in the last 12 months and1 property is currently listed down the street for 1.2M.

Improvements needs:  new roof, replace wrap-around deck and 2nd floor balcony, interior paint, flooring.  Kitchen and bathrooms are somewhat dated, but in good working order and could use some minor repairs, if there is money left in the budget, would consider updating them if it would increase the rent.  Proposed rehab budget $50-60K.

Question #1:  Do you cushion your rehab budgets over BID?  If so, by what %?

Question #2:  Would you consider using an unlicensed contractor for items like interior paint or flooring?

Estimated market rent after improvements:  $3K (averaged from other similar properties in town w/ no waterfront)

I've spent time researching local rent rates for in-town properties as well as properties in the immediate rural region but have been unable to find comparable water-front listings.  There is limited inventory regionally but lots of new construction underway in town.

Question #3:  How would you go about assessing current or after reno rent value?

MY BACKGROUND: I am relatively new to BP and excited to be learning everything I can about income property investing and building wealth and financial freedom through property investment. For 10 years, I've been a passive landlord of a 500 SF SFH property out of state with a small positive cash flow, good equity and increasing property value and am exploring how to leverage this property to eventually own multiple income properties through the BRRR approach as well has potentially house hacking in my local area where I currently rent. I have a thread about that here: https://www.biggerpockets.com/forums/52/topics/779349-hold-or-sell-and-help-with-the-s

Thanks for any insights, experience you are willing to share.  Feel free to post here or DM me.

@Jeff S. for now my plan is to hold until I can figure out a better formula, place to invest or some miracle here in LA. I have been considering talking to my family to see if there might be some additional investment monies there and exploring the ROI to build out on the property and if those numbers would pencil out. It's zoned R2 so I am just making a beginning with research on construction cost and financing options. Working the problem from multiple angles.

@Jeff Marston Thanks for the link, I'll check it out.  I have thought about trying to house hack and would LOVE to do that.  If I could find something in Santa Monica where I live and work, that would be amazing - but not likely.  The only duplex I've seen recently is 2.2M...way out of my price range.  I've been looking outside of SM but traffic is SO terrible here that any affordable property means a significant commute time 1 hour + each way.  I would love help figuring out a house hack here or how I can support a refi cash out to invest, I've not been able to make the #s work yet, but I'm open to additional feedback.  Super eager to learn this year and really make this gift work better for me!

@Kevin Hofstee - thanks for your reply.  The lot is 5000 sf so plenty of space to add.  I get so may wholesalers prospecting too, so I assume that is what they have in mind.  It's zoned R2 which is a multi-dwelling zone. Housing characterized by 1-3 story buildings, but at a higher building coverage than R3 zones. The types of new development will be duplexes, townhouses, rowhouses and garden apartments. It's definitely something I've considered but don't yet have experience with.  That kind of higher density development isn't yet characteristic of other homes in the area however.

@Robert Goldman that is an amazing return on investment.  Where was this?  $120k out of a $30K where do I get in on a deal like that?!? 

@Mathew Wray thank you!. It's in South Tabor and it's a 1bd 1bath 1 car garage SFH. Tenants just left and my PM listed it for $1295, which based on my research seems at market rate. I live in a rental in Santa Monica - more expensive and more highly regulated than Portland. Rent increases are limited to approx 5%, so it would take 10 years to come up to $2K.