All Forum Posts by: Katrina Razavi

Properties go back on the market or stay on the market for numerous reasons, doesn't necessarily mean it's just b/c of bad tenants. That said, when buying a MF property, it's always good to consider the tenants and their situation (i.e. married or single, what do they do for work) and as much info as you can get about them from the seller or agent). When you get an accepted offer, you can ask for "estoppels" which will require the tenants to put into writing what they understand is the terms of their lease, which may or may not align with the actual lease agreement btw, (but usually does). That way you can validate what they're paying for rent, their security deposit, etc.

My advice is applicable for 2-4 units, since that's what I focus on. Before buying MF residential a few pts to consider IMO:

1. Tenant situation- namely what are they currently paying and if you can figure out what they do for work to determine if they can pay on time. Any and all info you can gleam here (even better if you meet them on site) is good. Note in CA there are now caps to how much you can increase rent year over year, (5% + CPI) so make sure to take that into account when running your #'s. Additionally, some cities have even stricter rent control or limit regulations, so be aware of that when running #'s

2. Shape of the building- are you gonna hv to do a lot of upgrades to the units and common areas? Make sure you account for those costs

3. Location- is important to attract tenants (i.e. good for commuting, close to cafes/restos/grocery stores/offices, public transit options nearby, etc) and also determines the types of tenants you'll get. 

4. The numbers- should go w/o saying, but the #'s should make sense based on your financial goals. In CA, most cases you're lucky if you break even or generate a few hundred bucks per door, that said appreciation is bound to happen as are rents increasing over time. If you wanna optimize for cash flow, then CA probably isn't your best market.

Hope that helps! Good luck

Great find, congrats @Nick Sandoval! What part of SAC is it in? I've been looking in SAC for investment properties myself, would love to chat and compare notes.

Hi Alex, sorry to hear about your situation. I live in the city and it sucks to see folks leaving due to COVID. Before considering selling, I'd def follow the advice of others to see what other options you may avail of to get to a place you could at least breakeven. Perhaps Airbnb or a short-term lease to a trusted friend or colleague? 

IMO eventually things will come back "online" in the city and so long as big tech companies continue to have HQ's in the Bay Area (which they will, despite all the panicky media coverage), SF will always be the "cool" place to live. This is why folks were willing to make a 1.5-2hr commute everyday to go to work in the South Bay. No one knows when things in the city will come back online, therefore time is a big variable you should take into account. For example, how long could you "float" this property for? Over the longer term, say 5-10 yrs there's no question that your property will appreciate, like most everything else in CA. It may be at a slower rate than an SFR, but it will likely happen. SF will continue to struggle with the supply/demand problem once things go back to normal, and in that case you won't have a hard time getting tenants or selling at a premium. You just have to be comfortable "waiting it out." Of course it's hard to make a recommendation w/o knowing your full financial picture, just some things to consider. Best of luck.

Hi @Daniel Goldfinger, welcome to the CLE area! I have a good agent I can refer you to along w/ some other folks who you may find helpful for a team, PM me with your email address and any other details you'd like to share and we can take it from there.

As a general rule and given past experience, I always prefer to buy SFR's vs. condo's, but like Justin noted, condos can turn out to be great investments.

My reasons for not liking condos as investments: 

1/ more volatile than SFR market (i.e. look at how condo's in the city of SF are doing right now vs. SFR's)

2/ HOA fees aren't tax deductible and can go up at any point in time, making it a big variable in cash flow

3/ HOA boards are always a mess, lots of restrictions and less control over your property (i.e. many boards disallow Airbnb or STR's and other issues you don't deal w/ when you have your own home).

Given the pandemic, folks are also looking for more space and w/ Sacramento being a growing city and having a foundational job market due to gov't jobs, the SFR would be my vote. But depends on the #'s and your long-term goals.

Good luck!

Agree with @Brian Garlington, Cleveland is a great market and that's where me and my biz partner invest OOS. Still affordable, (except way more competitive right now), solid rents from $700-1k+ in good neighborhoods, decent economy with Cleveland clinic and other anchor companies in the area and nearby university. My biz partner grew up there so he knows the area well and we had a built-in network before we even bought, which is my best advice. Where do you have a competitive advantage or boots on the ground? If not, you can def develop it, but if you already hv a network in a location that's "booming" that helps. Finding good property mgmt that won't rip you off is one of the biggest challenges of OOS investing btw

I'd def recommend using it as a bedroom or den if that's possible. If there's no closet throw in a set of drawers and/or a tree to hang jackets/ clothes/etc if you're cramped for space. Even if you can fit a single or full bed it's totally worth doing so. Also, to make the space look cool, I highly recommend those big murals you put up like wall paper to give it a cool feel. You can find them on Society6. I have one in our Airbnb and it gives it a really cool feel and gives the space some character.

Great call @James Wise, thank you! Is there a particular company or brand that you'd recommend?

@Kyle Lewis thanks for sharing!

Hi BP friends,

Wanted to know if anyone has recommendations for coin-operated, on-site laundry installation in Cleveland? We have a 4-plex where we're looking to install laundry (washer + dryer)

Thanks!