All Forum Posts by: Account Closed

I have delt with this issue numerous times and, from my experience, can tell you it doesn't get better.

I used to evict over the issue through a three day notice for non-payment (this is how it works in CA) but my approach these days is a little different.  Now I just give them a 30 day notice to vacate (60 day if they have been there over 1 year, again CA laws) and offer them their deposit back in full the day they move out if they get all possessions out (I would inspect for damage prior).  They still have to pay for the days they are there.  It means I eat cleaning costs, but the headache of continuous late payments is not worth my time.

A tenant that continuously pays in partial payments or the whole thing late means some month in the future it just won't come at all and you will be evicting them owing rent, possible damage, and cleaning anyways.

I bought a fourplex when I was 19, vacated one unit and moved in with a roommate.  It's a great way to start things out.  

I would recommend using this year to familiarize yourself with all the laws and contracts involved with rental property.  I took a series of classes at a local rental property owners association which certifies property managers.  The certificate won't grant you the ability to do anything that you wouldn't be able to do without it but I learned everything I needed to know about things like required forms, how to serve notices, and all the nitty gritty will go on while working directly with tenants.  With that also comes a complete set of up to date forms that you will need on day one.

Here in California bedrooms need to have an egress window.  To know if your window is large enough to comply with egress look up the measurements and operating style.  There are some dimension and square footage minimums, but those can be overlooked by a willing occupant.  The safety of meeting egress is a liability issue that I wouldn't ignore.

I disagree with Mike Bargetto that it can't be done here in the East Bay, but it may be more difficult than other areas.  To be a buy and hold investor here it requires a long time horizon which many people do not have the patience for or very large down payments.  Do not expect a return in the first complete real estate cycle, but with home prices and rents here you don't need to own very many doors to be able to provide well for yourself.  

As someone above stated, read up on any city before you invest to understand the laws as they pertain to rental housing, or look for unincorporated property.  

House hacking is a good suggestion, as is renting out rooms in your personal residence.  Anything to keep your own housing expenses to a minimum (and all other expenses for that matter) while at the same time being exposed to the housing market.  It's a powerful pathway to wealth and financial independence.

$600k is plenty to get going in the Bay area.  I am of the same mind set of investing where you know.  You will need a good real estate agent, preferrably one that knows rental property.  In the east Bay you might find the best returns by investing in 2-4 units and self managing.  I don't know SF or the peninsula, it maybe different.  Good deals are tough to come by unless you do a lot of work creating you own deals in these areas. If you invest well and hold for long enough (10+ years at least) you can easily achieve more than 10% return.  Good luck!

I am possibly the slowest of the get rich slow type.  I look for property with great construction and location and look at price last.  I am the other side of the spectrum from "make your money on the purchase" type.  The properties I buy are ones that I can highly improve and, since I am a buy and hold investor in a very expensive market, often a property doesn't cash flow for 10 years or so.  I like this method because I can be proud of my properties, run vacancy rates of a fraction of my market, the properties end up with no deferred maintenance, and are the nicest on the street. 

 I can speak to this a bit.  I started young with no real money so I relied on private loans from friends and family for down payments and loans from banks to complete the deal.  I've done quite a few at this point and in fact have relied on some private money for each purchase I've made.  I find that some friends see what I do and are intrigued but I can't seem to convince them to take the leap (as you put it).  Then there are others that want in and jump at any opportunity I present.

If there is to be a trick to it, it would be to know your audience.  I talk at length with them and try to understand what they need, then I see how I can work it into a deal that I am involved in.  I find older folks need write-offs and depreciation and younger people want capital growth.  

I do believe that some people will never bite at any offer EVER.  It just isn't right for them because it's in unfamiliar territory.  I will continue to work on some of the wealthiest people I know, because if I can get them on board I think it would be a great resource.

If I was starting out I would look to find people who have enough resources to do multiple deals and offer them a deal where they get basically all the profit and you do all the work.  Once you can get your foot in the door with them the profits will come your way down the line.  This is basically how I started (though I was so green I didn't realize I wasn't making any money).  

I take it all, cash, cashier's checks, money orders, personal checks, and online transfers.  Zelle is nice because there is no intermediate account like PayPal, but ultimately, as long as it doesn't cost me anything I don't mind accommodating how ever a resident wants to pay.

You are experiencing growing pains! Be aware, they never end.  The issues surrounding how to expand, how to manage time, money, and people are countless whether at 15 units, 50 units, or 100+.

If you are in a position to leverage your way into more property great, otherwise 1031 into larger multifamily is viable.  You have the option of hiring part time and freelance as someone above mentioned.  I enjoyed the book the E-Myth Revisited by Michael Gerber on how to think about business expansion.  The book isn't real estate specific, but it has great insight.

I started at 19 as well (37 now).  In my area (Bay Area, CA) $5k doesn't buy much but it is plenty to become a well informed, well educated, and well certificated professional.  I started with my local rental housing association who offers classes on a whole host of real estate topics.  Through them I became a certified property manager.  I immediately knew more about the rules of property management than many people who were working in the industry and I was up on the most current info.   Those classes were in the evenings and I see they are currently charging $1,100.00.

Years later I obtained my real estate license through online and in person classes which again I did in the evenings and weekends.  I doubt they even me cost $500.00.  This opens all sorts of doors into making decent money, meeting people who are in the business, and generally knowing more and more about the industry.

After years of working on my own property I also picked up my general contractor license for $240.00.  This again is another avenue for income and knowledge.

With these sorts of tools at your disposal you can really do most things in real estate.  Once you really dig in you will find a focus that will work best for you, and you can run with it. 

TLDR: get educated now, buy & hold or flip or make deals when you know what you are doing