All Forum Posts by: J. Martin

@Dave Van Horn,

Stoked you can make it out again! And thanks for tagging some folks too. 

@Jonny C.,
Along the lines of finding a deal in the Bay, we're going to have several local deal-makers out talking about what they're doing today to find deals. @Arlen Chou has been stealing our deals out in Oakland, after buying in Silicon Valley. (good, cash-flowing deals, when others said it couldn't be done.) @Jason Buzi is absolutely crushing it, flipping, building.. And hopefully @Amit M. will come out to share about San Francisco. And we'll have a bunch of other local folks of course. Along with notes, short term rentals, and some other niche stuff :) You should talk to Sandeep about his niche here in the Bay.. 

@Jeff Greenberg,

Glad you can make it out again, and I need to finish reaching out to everyone. Brian Burke is coming out. We'll be hammering out the final format and work more on the agenda in July to hammer this stuff out.. 

@Peggy Liu,
Ya! Year 3! Can't hardly believe it! I hear you on the passive stuff. I've been running around dealing with a lot of stuff for my business, and some tenant stuff here and there. You might need to talk to Dave Van Horn and get some notes going and collect that mailbox money! 

@Sandeep S.,
"thanks for the tag and I'm certainly going to be there! I can't imagine not going to such a fabulous RE event while living in the bay area. Just to be able to hang out with so many incredible folks for 2 days makes it worth going (..and all RE knowledge gained is a bonus :)"

How much do I owe you for the glowing testimonial?! haha Thanks Sandeep. Appreciate it. It's really unique to be able to get all these people in one place. Good seeing you again the other day, and will look forward to seeing you in October when I get back from Seattle!

@Chatree C.
"How do people connect in an event like this.." Great question. It's a little different for everyone. Some old school guys like Arlen Chou write everything down in a paper notebook. Business cards are still very common. We'll also be getting people connected on Bigger Pockets and Facebook before the event. And we'll have targeted networking sessions after the breakout groups to get better connected with the people interested in the same subject matter. Get some biz cards too!

@Vinny Vu,
Yes, it is also friendly to newbies. The folks coming out are mostly from Bigger Pockets, and have that same vibe of helping people out, sharing openly, and networking to get to better results for everyone. Along with getting educated, it's ALL about meeting people. Getting connected. Learning what works already. What works best for you. And nothing like connecting with others to help hash these things out.. What is your biggest goal in real estate/ 

I love what @Sean Pan said on the prior page:
"Already bought my ticket! Last year's event was amazing, I learned so much from your guest speakers and managed to close on 3 cash flowing properties. Looking forward to learning new things this year "
Come on out Vinny! Thanks for the shout out also Peggy :)

@Joe Xie,

I didn't jump in earlier, because @Amit M. was kicking ***. Great info. Now that we're down to the nitty gritty in Oakland.. (btw, Amit, fortunately, you do not need the entire history of rent increases, which could be harder for the prior owner to document.. just the original lease date and rent, current rent, and if there were any prior capital pass-throughs - because the calculator calculates the cumulative maximum from the start date (or last 10 years), then see how much it can be increased from the current rent level, along with caps.)

*Not legal advice. Consult your own expert and refer to Oakland website*

"@Amit M Thank you so much on the details. This really a good idea and I know the former owner have not increased rent every (since 2012). One issue though, it looks like the former owner did not registered with the rent board (hence not paying fees), is that will in any way affect me?"

Prior Owner
First, don't sweat what the prior owner did too much. 
If you have the leases and estoppels, you have your bases covered.
Just make sure you your notifications out as soon as you buy the building. You shouldn't have to pay "back fees" for the prior owner - like a trash bill lien - just for your ownership. 

Before all that.. 
**IMPORTANT** - before closing
Make sure you get the original leases from the owner, from when the tenant originally moved in. If they created a new lease during the tenancy, and you don't have the original lease document, obtain it. You will need the original lease start date and original lease $ amount to do your banked rent increase calculation. Also, find out the date of rent increase for each unit before closing if possible, as you can only raise rents once in a year.  If they did any capital pass-through increases, that will also help you with the calculator. The calculator is here on the City of Oakland RAP website.. (I recommend you fill this out before you buy the building)
http://rapwp.oaklandnet.com/resources/calculators/
(Use the banked rent increase calculator, as it's unlikely you're passing through capital costs or other things right now..) Note: RAP is the Rent Adjustment Program (rent control & just cause evictions)

**Notifications** - Immediately after closing
#1) Give them the RAP notice right after you buy the building, and post the Harassment notice in a common area. 

#2) Pay your RAP fees for each unit
#3) Register for your Oakland business tax license. 
(These are also required for rent increases. Downloads are here: http://rapwp.oaklandnet.com/resources/required-not...)

You should do these when you first buy the building anyway, as you're not sure what notices were provided by prior owner. In addition, if all 3 of these are not done, any rent increase you provide to the tenants is invalid. Also provide the RAP notification when raising rents.  (And don't push a rent increase until you have completed these things)

General RAP info: http://rapwp.oaklandnet.com/

Owner's Guide to Rent Control:  http://www2.oaklandnet.com/oakca1/groups/ceda/docu...

Rent increases: http://rapwp.oaklandnet.com/issues/rent-increase/
Required Notices: http://rapwp.oaklandnet.com/resources/required-not..

Calculators: http://rapwp.oaklandnet.com/resources/calculators/

These are all the resources you need to be successful, and a specific action plan to get you set with the city so you're paying what you owe, in compliance with notification requirements, and have the tools to calculate and submit valid rent increases to tenants. 

Best of luck!
@Katie P. organized a meetup with a bunch of BP folks on Sunday in Oakland if you want to join us.. :)

@Chris Strasser,

What states/cities are you thinking about? 
There may be some benefits to buying a larger property, but you're also putting more eggs in one basket when it sounds like you don't have experience in that asset class (commercial property), or the location (out of state). (if that is the case). 

As long as you're comfortable with the overall leverage, you might want to think more about the location and team you'll be using than exactly what LTV you're going to go into the next deal with. As long as you roll the total amount from your sale into the 1031 purchase, and don't have to pay taxes on "the boot," you can maintain some flexibility to buy more when you want - since you're not under the gun to deploy a larger amount of capital to avoid taxes.

Just some food for thought... Good luck Chris!
Hopefully will meet you at one of the local meetups.. 

Credit is the fuel of the economy. But what happens when loan growth slows toward zero? 
And what happens when banks can't make good spreads on their loans, relative to the risk present in the economy? 
I love this first graph because it has almost 70 years of data - C&I Loan growth.
These are business loans, from wall street to main street..

C&I Credit Growth

Since 2016, C&I credit growth has plunged off a cliff. What do you see historically when loan growth significantly curtails? Another sign that we are in a late phase of this expansionary cycle. How long will this cycle continue? Time will tell. But record low unemployment rates, significantly curtailed credit growth, and a flattening yield curve moving towards inversion aren't especially promising. 

YIELD CURVE SPREAD - difference between 2yr and 10yr Treasury yields.

The yield curve is also a notorious indicator of future recessions. As the economy gets later in the expansionary phase, short term rates increase as the Federal Reserve increases rates, flattening the yield curve towards inversion, leading consumers and businesses to curtail long-term borrowing and investment, turning the yield curve inverted. This is not in emergency territory, but you can see the cycle play out in the yield curve, with some static in between.. 

C&I Credit Growth vs Job Growth

It looks like there is a pretty good correlation between C&I credit growth, employment growth, and recessions, over the last 70ish years. (and I would argue, some causation and feedback loops there). Been happening for quite a while. Any concerns over the recent drop in credit growth? 

What do you think? Worthless? 
Or has some useful info in the data..? 

For the folks coming out to join us, who do you most want to see? and/or what do you most want to get out of the Summit? 

Especially our newly signed up attendees for this year..
@Jeff Greenberg, @Mick Harvey, @Account Closed, did you enjoy last year?

We have the same awesome venue!
www.sfbaysummit.com

Hi @Chris Penny,

I don't have anything to sell and not an agent or provider, but I do definitely recommend going to some local meetups, and leverage the info here on BP. I think Brandon Turner wrote a book on how to buy RE out of state (very carefully lol). @Katie P. organized a meetup for next Sunday in the East Bay, and @Ryder Meehan is having an out of state investing meetup this week in SF. Come out and meet some people in person. I'll be at both. I don't invest out of state, but have heard from a lot of folks who have, and there are definitely approaches that work better than others.. 

Lots of great folks in the Bay Area to connect with!
Hopefully we'll see you in person soon :)

 CA Unemployment Rate Update: May 2017.. 4.7%!
Lower than before the financial crisis, and only matches December 2000, just before the dot-com bust, over the last 45 years of history. Historically, it takes about 18 months from when California hits a low of 5% unemployment until there is a recession, implying late 2018/early 2019 for a recession start (but start not identified until another year later). It takes an average of about 2 years for the unemployment rate to peak after a recession starts, implying the worst of the next recession in 2021 (if history is any indicator). This is all "implied." But we're definitely closer to the end than the beginning!

What do you think about this? 
Even with additional people entering the labor pool, how long can we sustain these record low unemployment rates? 

Same story around the country.. 

 CA Unemployment Rate Update: May 2017.. 4.7%!
Lower than before the financial crisis, and only matches December 2000, just before the dot-com bust, over the last 45 years of history. Historically, it takes about 18 months from when California hits a low of 5% unemployment until there is a recession, implying late 2018/early 2019 for a recession start (but start not identified until another year later). It takes an average of about 2 years for the unemployment rate to peak after a recession starts, implying the worst of the next recession in 2021 (if history is any indicator). This is all "implied." But we're definitely closer to the end than the beginning!

What do you think about this? 
Even with additional people entering the labor pool, how long can we sustain these record low unemployment rates? 

Same story around the country.. 

Mark, 
I just gave this question to my event organizer to double check. The 4th floor auditorium, where the main speakers are speaking, has an elevator and no stairs. However, we will check on the other spaces and bathrooms. Rick Harmon was great last year, and has helped mentor a lot of folks. 

The full agenda is definitely too early to finalize, but we should have the speakers for each day in July. Part of the reasons we're selling super cheap early bird tickets right now.. The venue isn't always super quick on responses, but we'll find out for you.

www.sfbaysummit.com 

@Ori Skloot,

I don't have a cleaner with extra time right now, but plan on finding some back ups. 

TaskRabbit can be tough, because you get a different person every time, depending on who's available. (unless you get their info personally and call them back outside the app)

I think it's best to find someone reliable that's closeby. If they're running around in traffic, you'll get more delays. 

Can you keep freshly washed linens, extra supplies, and cleaning stuff on-site? Maybe in a locked closet? Or put in some small locking cupboard? 

In case a cleaner doesn't show up, having everything on-site will save you. On that note, be sure to have an extra extra set of keys for the backup cleaner or other access. (if not all electronic). 

Also, I recommend having a written checklist for them to perform, so you get consistent results, and someone else can do the work if you don't have your regular people (like task rabbit). Print some extra copies and keep them with your supplies/cleaning stuff for the cleaning staff. 

Guesty charges 3% of revenue for their software, and also has features to text your cleaner, which is a nice reminder. I like it a lot, because you can automate all the check-in/out emails with the guest also. 

$30 sounds way too cheap to get someone to go out there at a particular time of day, every day you need it. $40 also doesn't sound super compelling, considering what needs to get done. Get a couple quotes to figure out a good price, pay what it's worth to make sure it gets done, and charge the guest accordingly. They're mostly looking at the final price. Not necessarily trying to nitpick the cleaning fee. 

Good luck Ori!
Way to take the leap!! :)

(And yes, you priced too low if you booked up the whole summer that fast ;)