All Forum Posts by: Josie Roman

I hate to always be the one who brings bad news in this type of conversation but you need to be very careful when investing out of state, specially if you don't know the area or have someone local that you REALLY trust. 

There are companies specifically targeting Californians, Newyorkers, and residents of other areas with high property values. These companies buy properties across the country for $50,000 or less, they fix them for under $10,000, put a temporary tenant in it, and sell them to out-of-state investors for $150,000+ with manipulated appraisals, when locals would buy them for half. In 15 years I have seen MANY investors getting caught, unable to sell their properties at break-even point when they needed.

Not sure if you watch the News but half of the Midwest has been going thru some extreme weather lately, including estimated 7 trillion gallons of rain and tennis-ball-sized hail. Not all the USA is sunny year-around and some areas have bug infestations that would eat out your electrical system in two months.

If you don't like the burden of property ownership in California, imagine how you would feel if you were dealing with property ownership 2,500 miles away and learned your house has been blown away by a tornado. 

Property ownership can be challenging anywhere. Every area has different. Get informed and be careful when making partnerships.

If you just do wholesaling, you would be very limited to a very specific type of deal; that is the distressed seller who is willing to sell for cash in 48 hours at 75% of retail. 

Our trainees can multiply their earning capabilities with us x3 or x4, as we teach holistic real estate, and how to get into real estate investing by utilizing multiple simultaneous very lucrative strategies, not just wholesaling. 

There is no practical rule of thumb to estimate maintenance. Obviously an older property with deferred maintenance would have more need of repairs than a turnkey, but then some newer appliances break faster than older ones. The current owners should give you their p&l, which includes repairs they have done. Request the "official" version, from their accountant, which is filed with their tax return.

Other than that, a good property inspector should point you in the right direction as far as what areas could give you problems and what capital improvements you should make to avoid things breaking up later. Pay particular attention to roof, AC, plumbing and the electrical.

Let me know when you find a deal. We are interested in SFR, 2-4 and 5+ for fix & flip, fix & hold and also redevelopment - if the numbers work. We can also handle finished & entitled land.

Happy hunting! 

My recommendation would be a 2-4 in areas like Hawthorne, Lawndale, Gardena and Torrance. You can get much more for your money when you leverage on the rents of additional units and you can provably qualify for a VA or FHA loan with good terms.

It's hard to find units as large as 1500 sqft thou, as that size home tends to be above the starter home line in LA.

It basically means that the landlord is only allowed to raise the rent at the rate of that year's inflation. If you purchase a building under rent control, you have to follow that rule and cannot increase rents beyond inflation rates, even if contracts are old. A new landlord under rent control can only update rents at market for new tenants, once the old one moves out. Because of that, some old tenancies are set at very low rents. I have seen buildings with 10-15 year old tenancies with tenants paying less than 1/3 of the market rates.  

California has many cities under rent control, such as Santa Monica. Other cities, like Los Angeles have rent control only for buildings built prior to 1970's. Most cities in OC don't have rent control and LA county is on a city basis

You can read more about it here:

https://en.wikipedia.org/wiki/Rent_control_in_the_...

Let me know if you need any help evaluating properties, etc.

My advice would be to start by getting approved for a FHA or VA loan. As a veteran, VA could offer you much better terms. Then you can start shopping for a property and getting familiar with the different cities in OC. There are several cities with many 2-4, but OC is mostly a SFR/condo county. Best prices provably in Santa Ana, Stanton and Anaheim. Long Beach is best for 2-4 - we've sold quite a few there - and it's also a very solid rental market with plenty of jobs and a college, AND no rent control.

Phoenix is a FANTASTIC rental market when politics don't get on the way. We have owned property there, which has doubled in value within a few years and keeps going up! The area has seen much redevelopment in the last 15 years. A high percentage of the population is Hispanic and some politics don't like that. When politics kick out the immigrants, off it goes prosperity, redevelopment and all of your tenants, ALL at once. Some people should read recent economic history books and reviews occasionally.

Remember that your FIRST property is always the hardest to acquire - your own doubts and inexperience get on the way all the time, just as you wondered about foreclosures. As a first time property owner, I would also recommend you to STAY LOCAL! We own property internationally and there is a bit of a stress when you get a call from London or NY on a flooding leak - no matter how much you trust your local property managers or how long you've been in real estate.

You should get the advice of an experienced local broker, who can help you find a property, find rental comparables, and also refer you to reasonable contractors. Sometimes landlords don't raise rents for years on fear of losing good paying tenants. Those are the landlords that tend to procrastinate on property maintenance. If you buy a property that needs work, you should see nice upside in rents, once you renovate. With an FHA loan, you can leverage on the existing and projected rents nicely.

It's not a California law, but a title company rule that has been spreading around the country for several years now. Title companies want to protect themselves from liability so they ask you to get the seller's consent, in writing, on your contract assignment to a third party for a fee. This involves a document in addition to the purchase agreement, which might already say "and/or assignee". You don't have to tell the seller what is the fee, BUT if the seller asks the title company, they WILL tell.

In addition to this rule, there is a new California law that would affect disclosure, WHEN your buyers is using a federally regulated loan - your assignment fee will be in the HUD-1, which now is called Closing Disclosure.

This is a new Mortgage Closing Disclosure by the Consumer Financial Protection Bureau, which published this final mortgage disclosure rule in November 2013 but delayed the effective date until August 1, 2015. This Closing Disclosure required by the rule combines information from the existing Truth-in-Lending (TIL) disclosure and the HUD-1 Settlement Statement, and must be delivered to borrowers at least three days prior to a closing.

Either the lender or settlement agent  - escrow/title - are responsible for completing and delivering the Closing Disclosure to borrowers.

If you have a deal on the table, let me know. We are always looking for good deals and are happy to co-operate if the deal is right.

What is your investment criteria?

I have some interesting flips, redevelopment and land deals on the table.