All Forum Posts by: John Sherwood

Thank you for the input @John Warren and @Marcus Auerbach. 

The building is in a C+ neighborhood that is currently undergoing a transition to a B, with many properties being improved in the area. If the trend continues, I’ll be a genius, if it stalls and stays the same, I’ll be ok, if it tanks, I’ll be a dumb speculator. 

The property is 100 years old, the mechanicals are 4-5 years old. I’ll be getting inspections, and need more info on the plumbing and electrical as well as the roof before moving forward. 

My model currently includes property management, vacancy and capex, but just as a 10%. Guessing with the age of the building, I may want to increase the CapEx, or do as @Marcus Auerbach suggests and plan out actual repair costs in the future. On that note, do you have a model for doing that planning (i.e. replace water heater after N years of life) ?

Hello Bigger Pockets brain trust,

I'm looking at a 4 plex... cash flow looks decent, ~$120/door. Cash on cash looks like it would be about 9.5% (Brandon Turner talks about trying to get 12%), and Cap Rate is looking like it would be around 8% - which seems ok for the area (not amazing) to me (I know these are very area dependent)- and if it were in Bay Area I'd kill for 8%.  I'm a little hung up on the cash on cash and cap rate. Am I being too picky? 

The place is at the edge of a gentrifying area, so there's some potential (but also some risk). Units are rent ready, but basic. 

@James Phan - San Leandro has updated its ADU guidelines, and are in line with the State of CA. As @Sandeep S. pointed out, the new laws have greatly reduced fees and requirements, especially for units <750 sq ft! You can see it here: https://www.sanleandro.org/documents/Planning/ADU%20Handout_Jan2020.pdf 

(see page 2 - "Impact Fees"). The only potential fee for <750 sq ft ADU is a wastewater hook up fee. If you are doing something >750 sq ft, then they'll still get you with at least $17k in fees.

@Sandeep S. That’s good news! I’ll check with SL planning department, and will post what I find out. Maybe I’ll move ahead with my garage conversion after all!!!

@James Phan when I last checked (mid last year), San Leandro had also adopted the State laws for ADUs. However, as @Brian Larson mentioned about school and park fees, they were very high in the city. I have not heard if San Leandro is waiving them in 2020, like San Jose is. I had assumed SL had the high fees so as to discourage people from doing it, while still complying with the law. 

@Joe Worth thank you!

Hey @Michael Tucker @Sandeep S. I live in San Leandro, but have been looking into out of state (KY - I have business there) to start investing - given how $$ local is. @Sandeep S. would love to connect and hear how you got in and accomplished locally in the Bay Area. @Michael Tucker - starting my journey as well, would love to connect to compare notes, motivate, etc...

Cool, thanks @Joe Worth - had been poking around at both of those - so glad to hear there's potential. What do people think about Algonquin? Seems to be sort of industrial, but near the University...  but wondering if that's getting too close to the West side? 

Thanks @Erik Hitzelberger , exactly. I would hope there are some other less obvious or “cool” areas that provide better financials (rather than appealing to my emotional - “I love those neighborhoods”). I also want to avoid the trap of thinking that things are a good deal because I’m comparing to the Bay Area (which makes nearly everything a good deal) ;-)

Thanks for starting this thread @Tim Bergstrom. I’m also interested in the Louisville market - given the SF Bay Area (where I live) is too pricey for a newbie like me to start off in - and I travel to Louisville several times a year for work. So I’m familiar with it at a high level - so I’m also looking for connections/feedback to help understand the nuances, etc. for my first investment in the market. I am attracted to areas like Old Louisville, Frankfurt, Butchertown, Highlands, etc. - but seems like there may be some up and coming areas that I’m completely overlooking.