All Forum Posts by: JJ P.

I love long term tenants, because the hassle and cost of turn over figures in.  I'd probably go with the long term tenants if the credit score is decent and their rental payment history is good.    However, with long term tenants, it's always tough to keep the rent at market rates when rents are jumping the way they have, and keep happy, long term tenants.   The 3 professionals may move on, in a year, year and a half, two years.   That gives you the opportunity to raise the rent.  Also 3 independent incomes can absorb a rent increase easier than a couple.  

  I'm a pretty nice landlord, and my rents are very low for my area.   It hurts the bottom line but keeps me from outsourcing the management due to stress/hassle, because everybody is pretty darn happy.  I consider personal happiness and peace of mind an important component to my business plan.  

Phoenix is experiencing amazing growth.   I'd stay there.  It's far easier to consolidate in one area, and since it's an area that you know well, your knowledge will be an invaluable asset to your investments.  

Just to revisit a topic earlier in the thread, overseas death statistics/causes are readily available from the State Department.  You can sort by date and country, then it lists location and cause of death.  You can decide for yourself if the rumors match the facts.  Then you can compare countries against one other to see trends.
 I'm a "get the facts" kind of person, and find the data stats fascinating.    Of course there are violent incidents in some countries, but I find it noteworthy that drowning in the coastal countries is common cause, and traffic accidents.  Note to self:  Don't go swimming after having a bunch of drinks.  I'm not a strong swimmer anyway!   

U.S. Citizen Deaths Overseas (state.gov)

I would think that 5 sources of income could be 5 rentals if you wanted to count that way.  But, the point is to diversify and have income streams with a low correlation factor.  For me, that's diversified rental income; social security at age 70; a stock/bond portfolio; a side gig; and the ability to sell off assets as needed.   We have enough rentals that serve as piggy banks if a catastrophe struck.  We could easily sell one, get a bunch of cash, and not really suffer greatly on a month to month basis.  

The FIRE (Financial Independence, Retire Early)  people are almost 100% focused on stocks/bonds.  They don't seem to come to our side of the financial freedom equation.   I think it's because Real Estate has such a high entry price point that it takes a higher level of motivation than stock market investing.  Then, you've got to manage a rental.  Deal with tenants.  A water heater could break... you know the story lines.

My unofficial observations are that many/most people have some sort of stocks/IRA/401k/Pension, but most people (like your granny) probably made more money on the family home. The FIRE concept is a stock/bond portfolio that can withstand a 4% withdrawal rate and aim for a nest egg is large enough to support their lifestyle at 4%. Since the stock market historically performs better than 4%, the idea is that you won't run out of money if you take 4% or less because it's growing faster than it's depleting.

I'm sorry this is so stressful for you.   Hopefully it's one of many great RE deals.  

If a closing date falls on a weekend or holiday, the date is automatically extended to the next business day.  Your escrow should have given you a timeline.  

Did you sign off on contingency removals? That's an important document in RE transactions. The HOA docs would have been part of your due diligence and inspection of them/acceptance would have likely been a contingency. How long is your due diligence period? 10 days also? Less?

I'd send a Notice to Correct along with a gentle, friendly letter stating that they are violating xxx paragraph of the lease they signed.  Sort of a velvet glove over an iron fist type thing.  

 Young people may have the attitude that they're paying rent, they can do what they want.  They may not fully realize that they could be evicted for this.  

I agree with all the comments above, but, for myself, I'd be wary of setting up a situation where an angry tenant can stop paying, claim "covid distress," and then fall under the eviction moratorium.   With that in mind, I'd contact a few eviction services and pick their brains about how things are currently playing out in your area before taking a stance.   In my area, you can get an eviction for just cause but you really can't get a timely court date.   

For future purchases, it's good to get the tenant data from the old seller via an escrow request/demand.  You can even get new rental agreements and "estoppel" data as part of the escrow.   When the old owner makes the request, it may be a bit easier, or at least you'll know who's moving out as a result of the increases.  

I'll offer the perspective of global nomad.  I travel quite extensively and have settled in for an Oregon beach house instead of one in Portugal, Norway,  Greece or elsewhere.   We looked for years, having the dream of vacation getaway directly upon the ocean.  We were going to Europe 4-6x a year (really!) just prior to Covid.  I'm so relieved to have a place in Oregon instead of Europe, since a Euro purchase would have been sitting vacant for this whole year.  I've also had a beach house in Mexico, about a 2 hour drive door to door, and a vacation cabin in Big Bear, also about 2 hours away.   Both those were very minimal financial outlays-- BB -less than 50K cash purchase/ Mexico- a  bargain lease in an old beach house in an American Enclave.  

 My two cents, on top of the great advice upthread, is this:  

1) Rearrange your lifestyle in a way that justifies the expenditure and the transit time.  You're talking serious money.  Yes, it's cheaper than the USA, but it's still a LOT of money for your R&R.   And, you have a lot, not a house.   Building is a hassle when you speak the language fluently and have a phone book.  It's going to be hard from afar or done in spurts while in CR.  It could take years.   Seriously, years!  Where are you going to stay while it's being built?   Will you keep a vehicle down there?  Your boards?   Would the vehicle be safe?  My remodels in Mex were terrible experiences and disappointing overall for the time and money spent.  Thievery was common--small time stuff but all the time- I'd fill the propane tank, the neighbors would help themselves, the tank would be empty the next time I went.   Some of my new stuff seems to have been accidently installed in the neighboring homes instead of mine ... all pretty typical stuff.  

2)Getting there/home will take a day, including the time getting through LAX. Get Global Entry to speed things up.   Your enjoyment of the house (when it's built) will have a direct correlation to how much time you spend there.  A great 3 weeks isn't as justifiable as a great 12-20 weeks spent there.   Will you take many small trips in a year?  A few long ones?  Can you work remotely from there?   

3)  When the house is built...Seriously consider a partnership or paid Vacation Rental manager.  It will offset your hard costs and also keep activity around the premises.  Bad things can happen to vacation houses while you are gone.   Especially in remote areas with a wealthy tourist/impoverished community dynamic.  

 We sold our Big Bear cabin shortly after the pipes burst in a cold snap and hot water ran down the street for 3 days. UGH!  We weren't using the cabin as frequently as the years passed, and even though it barely cost us anything ($250 a month or less  in taxes/insurance/utilities'), we still hardly made it up there.  For the first 6-8 years we owned it, it was the best small investment we ever made and I practically lived there.  Then the kids got older, less interested, and we reassessed its value to our lives.  

4) I like the post above from @Shiloh Lundahl, where the partnership is set up going in.   Partners can be a pain, but also a Godsend.  Even 1 other family would be helpful... maybe your surf buddies would like to buy in?   Surprisingly, vacationing in a great area still can be lonely, especially if your family members don't share your love of surfing.  

I don't think that there are currently any SFH in Oceanside that are priced in the 174 range. That should narrow your options. It sounds like you are enthusiastically beginning your journey but haven't done much research yet.

 For instance,  If you are preapproved for $800K, please double check that this is "desktop underwriting" aka "DU," and not just a form letter from a lender.   The form letters are just one mini step towards getting a loan.  DU means the lender has done all/most of their homework into you and your finances.  They just need to pair the actual house for purchase with the underwriting data in a DU.   

In other words, I suspect that if your cash flow is so tight, you may actually run into issues getting funding when the lender has reviewed your paperwork in depth.  So, before you choose a direction, make sure that you've got those ducks in a row. Good luck.

Yes, we moved assets from high priced San Diego to the lower priced Oregon Coast, to add a little diversity to our portfolio and finally scratch that "out of state investor" itch.  Plus we landed in an area that we want to spend some time and got a lovely second home for ourselves.   In total,  we bought 4 Single Family, LTRs over the summer of 2020 in a low key (not so much "up and coming") area that offered good dollar for dollar value for us.  They are rented and doing great. You can read about those in the Oregon forums.  

I understand the trepidation about making a move in an up market. Everything is up, as you know. The Case-Shiller report said some markets, including San Diego, were up 10% in December. It could be a bubble, but who knows?  I think if you do your due diligence, and buy a good property where the numbers make sense, there's no time like the present.   If you wait, you might have better chances, or you might have worse chances.  You'll only know that when the future arrives.  But if you take a chance now, maybe make some money for a while because the numbers work with the data that you have available right now, then in 3 years everything tanks and you take another chance and buy the dip.  Then you took two chances and now you have two houses.  

 In my opinion, the biggest mistake you can make in wealth building is to wait.   Sitting on the sidelines is what keeps people from building wealth. Why?  Because  Time is the magic fairy dust that makes  people rich.   The only houses that I really regret are the ones I didn't buy or the ones I sold instead of keeping.  We turned down several in 2012 because they were a mere $7500 over what we felt was fair market value.  Not all of our houses were home runs, some were duds the day I sold them.   But the duds would have been superstars if I still had them today, with the magic of time, inflation, population growth, etc. 

My Grandma's first house was a mile from the beach in Hermosa Beach, CA.   It was $16,000.   She didn't want to buy it because it was so expensive.  She almost backed out but Grandpa insisted.   Needless to say, 30 years later that was the best thing she ever did with her money.