All Forum Posts by: Jeremy Lee

Hey all, 

I've been going out to a local REI meeting and the sponsor included a little insert about earning $$$ if you take title on a property and qualify for a private money loan (presumably backed by this same sponsor/investor) for an age-restricted community where you must be 55 or older. Once the property is sold after several months, they will pay out the 'fee' to the title owner. Basically, they're looking for an "in" to the community to get by the age-restriction.

Is this something generally to avoid from the perspective of liability etc? Or is this perfectly "normal" and "safe"? 

Haha so they got back and are offering nearly half of what my in-laws and what their friends paid. Of course, they bought it purely based on speculation so even if they put it on the market themselves, there's no way they're going to get close to the amount they paid for it. The worst part is that it's split 4-ways and I have on idea what the arrangement or agreement was for doing that.

Hey all,

So my in-laws brought over a letter from a local real estate investment group here in SoCal, expressing interest in purchasing a parcel of land that my in-laws co-own with 3 other couples. The land is zoned for industrial use I think, and is located up in the Lancaster/Palmdale area right across from an airstrip and was purchased for around $108k. It looks to be around 2 acres. It seems to have been an impulsive and quite speculative purchase - like friends pooling money together to buy a ton of lotto tickets... Recently sold properties on the LA assessor's parcel map seem to indicate pricing for similar parcels sold at around $80k but this was in 2015-2016. Selling price on one similar piece of land I found just down the street (but not across from the airstrip) is $50k per Realtor.com - it seems like a loss, even if they demanded a premium on being across from the airstrip. Then again, I know nothing about commercial and industrial real estate so....

This is a direct mail marketing letter, it seems... they are offering to pay all cash OR 1st Trust Deed on the property and pay interest at a 10% interest rate monthly. They are wanting to purchase direct from owner to avoid real estate commissions and are offering to pay all closing costs.

Thoughts on how to proceed? Should they attain the services of a real estate attorney and CPA who specializes in real estate? I have a friend who has her real estate license and is also a real estate attorney (though for commercial I believe). Wondering if we should ping her.

Hey all, for those of you who have/had vacation rentals that started off great but the location is now not as desirable for tourism, etc. What do you typically do with these vacation rentals? Do you convert to standard rentals (and does this work/make sense most of the time?) Or do you typically just sell or 1031 the property to something else? I guess this question is aimed mostly at those who are into vacation rentals as well as buy & holding standard properties.... is there room for a crossover or is that a pretty rare thing?

I've heard varying things about Arlo and battery life. I think the Arlo Pro battery life is improved though. I recently picked up a Blink system - it's pretty good but a blue LED light comes on when the recording starts and cannot be disabled (you can open it up and put a piece of electrical tape over it though). Easy enough though and free cloud recording for the Blink system. It will record up to a minute of activity based on motion trigger and you can live view as well to see what's going on. Both Arlo and Blink will provide the easiest accessibility for remote viewing. If you want something a bit more professional grade, then you'd need to look into a DVR system - this may be trickier to setup for remote viewing however since you'd likely now have to deal with network and router configuration. Not to mention you'd probably have to run wires. It would just be a more involved setup. Blink/Arlo are more 'plug and play' - you just have to worry about the batteries running out (unless you can connect them to a nearby power source). Another possibility is the Ring Stick-up cam, which can run off solar power. This would be more ideal as an outdoor camera though. 

I just ran some numbers through a couple different calculators (non-BP ones) and it seems that in order to produce a potentially positive cashflow (and even then with a pretty low CoC and Cap Rate) the sale price of the home would have to be closer to $470k w/ a 20-25% downpayment and all expenses would need to be on the minimal side. A property management company would reduce the cashflow by a lot so if we're willing to deal directly with contractors for repairs, etc that would be better. So I'm not so sure about all this. In terms of "buying" out my brother in law, I think I meant it in the sense that *if* we agree on a lower price point (say that $470k number), I think he would likely have issues with it since we're being sold the house (that was supposed to be part of his inheritance) at a discounted price... basically, potential issues of favoritism etc. Now, if we told him that the cashflow we get back would be going towards housing my in-laws that may alleviate some of that. Either way, it seems like this could get pretty hairy (if he cares)

Thanks Josh. The only thing I'd be concerned about is whatever the sale price is that we agree on, especially with my brother-in-law in the picture (as we would technically be 'buying' him out too). But in light of seeing this as a rental or BRRR opportunity, I'm not sure if it would make much sense with the kind of rents that can be had around there (currently the ballpark figures are around $3k per month). We would likely convert the office den into a full bedroom and possibly do other work on the home but I'm not sure. I don't know what the rehab costs would be ultimately so I guess that's worth investigating, but based on the rent alone and the mortgage, I think it would potentially be a negative cashflow.

Hey all,

Was curious how the rental market generally looks around the Long Beach area. I'm a noob scoping things out in LA/OC. I'm interested in Buy & Hold and BRRRR particularly for duplexes or multiplexes and was just checking around on Realtor and Zillow for starters to practice deal analyzing... seems like, at least for duplexes, there might be some pretty decent deals to be had. For instance, one portion of a duplex 3/2 could rent anywhere from $2500-3000 from what I've seen and I just saw a 6/5 duplex selling around $600k (though it's pending). Does this seem pretty realistic to you guys?

Thanks @Kiersten Vance! I don't think I'm fully understanding #2 when you say to refinance with a bank in my own name, etc. Wouldn't my parents need to technically list the place for sale in order for that to happen? Or does it not really matter in the sense that I can take a $395k (portion my parents roughly own) + $30k (remaining of my 25%) loan out, at which point my parents would be paid that amount, and I would then just continue repaying the loan monthly based on that number. Or the $30k I could just pay off now sort of as a "downpayment" and then pay the loan back based on $395k. I'm not sure what type of loan I would need or would qualify for (FHA, Conventional?) in this case. Also, if I do this, would I be able to qualify for the first-time homebuyer credit? Or is that already out the window since my name is on the deed for this place?

As far as the 25% ownership, yes that is technically my portion regardless of the $700 - the $700 was really just an 'arbitrary' amount we agreed to based on what I thought would be enough to get by on at the time (this was determined back in 2007 when my salary was a lot less). Either way, I'll have to crunch some numbers but thanks for the ideas and input!

Hey all,

Was curious if there's a general 'rule of thumb' when looking for a duplex/multiplex in terms of # of bed/baths and what would be the best setup for renting out either all or a portion of it (if I were to live in it). In my area (LA/OC) I've been seeing quite a few properties where the first unit might be 2/1 or 3/2 and the remaining units are 1/1. Are the 1/1 units pretty desirable to live in or at least pretty easy to keep occupied? For some reason, I have it in my mind that 3/2s are the most desirable (probably because of reading John Schaub's book) but of course that's in the context of SFHs. It just seems like the turnover and vacancy rates for 1/1s would be higher in general.