All Forum Posts by: Rob K.

Only real success I had with buying from a bank was when I had to foreclose on a second during the great recession and a bank held the first which I brought current. FDIC then seized the bank holding the first and sold the banks assets to US bank. Tried to get them to modify but they were not interested. When I offered to buy the first at a discount they were all about getting a low ball appraisal and selling at a discount and getting reimbursed through their loss share agreement with the FDIC.

California is happy to recognize Series LLCs from other states. They just want a minimum $800 annual franchise fee for each series doing business within the state.

https://www.ftb.ca.gov/file/business/types/limited-liability...

There used to be a thrift shop across the street from my multi-family. For a while I would just move over left over furniture, clothing, etc that was in decent shape and place it there on consignment. Every once in a while I would stop by to pick up a little bit of cash, but then the thrift shop moved.

I started investing in real estate rentals about 32 years ago. I now have 21 San Diego county rental units with my last mortgage paid off about 2 years ago. It was not so much a plan I started then, but more of an evolution. It started when my wife and I decided to hold on to the condos we each lived in before buying our primary shortly after we got married. Picking up some properties cheap during the 2008-11 financial crisis helped. For most of my life I was busy with a professional career while slowly growing my real estate portfolio and equity. Some of my guiding principals that got me to this point:

1) Buy and hold for the long term in good areas. I have rarely sold anything and never done a 1031 exchange. Not having frequent transaction costs in and out helps in the long run.

2) Any refinance I have done has reduced my rate and shortened, not extended my loan term. Aside from using credit lines on my rentals for other investments (when they were cheap and more readily available) I have never taken cash out on a refinance.

3) I have never planned to rely solely on rental income to pay life's expenses, but over the long term, as mortgages have paid off, positive rental income has improved dramatically to the point where rentals do more than cover my family's expenses.

4) The idea of dead equity used to bother me, but I came to learn to accept and embrace it. It's there to utilize if I need it, but I don't think I will need to. I don't have any credit lines on my properties currently.

5) Real estate is a people business. Treat it as a business and treat your tenants and vendors fairly. Address any situation to avoid a build up of resentment if possible. Your good reputation pays back dividends and makes the real estate journey easier.

In 1993, when my wife and I purchased a new house, deciding to keep the condos we each owned as rentals instead of selling them.

 Case Schiller may have been the gold standard when it was first developed in the early 1990s and for a while thereafter, but IMHO, it is likely no longer the gold standard as it has not really changed much since its original methodology and since it was sold to S & P. Other companies such as Zillow are incorporating much larger more modern data bases and are arguably more accurate and up to date. Case Schiller does lag, the most recent publication with its index updated through March. It does not capture what appears to be recent changes in inventory levels and the effect that may have. 

By assigning index values to the 20 cities it follows instead of breaking down dollar values, it does not have any nuance between movement in upper tiers vs. lower tiers, etc. It is arguably falling behind by not keeping up with more modern data collection methods.

I'm not understanding the use of the term Novation as used by the poster and why it is different from just an assignment of an existing contract. In legal terms a Novation is generally a new agreement with different terms or different parties that is a substitute for an earlier agreement that is then extinguished with the consent of all parties.

If someone could explain the structure of a novation as used in the OP's original post, it might make this discussion clearer. FYI, I do not watch you tube videos or guru stuff, so maybe I am missing some context here.

Given the permitting and repair issues, you could offer to make a reasonable down payment, enough to at least pay off their HELOC and ask them to seller finance the rest of your purchase price. If the plan is to get everything repaired and permitted, you could tell them it does not qualify for conventional financing and advise them your plan is to fix it up, get it permitted, and then refinance them out. You need to put together a budget for needed repairs and permitting and obviously you will need to be the judge of your own ability and willingness to take on that task as well as set a reasonable time frame.

With the trust, there should be a trustee or trustees in place. Probably the grandson. That is who you would be dealing with, has authority to act, and who would be signing the deed. Let the title insurance company sort out the trust issues. You just need to get title insurance as part of the purchase.

I agee, don't sell your rental or primary if possible.

So I started investing in real estate rentals about 32 years ago. I now have 21 rental units with my last mortgage paid off about 2 years ago. It was not so much a plan I started then, but more of an evolution.  It started when my wife and I decided to hold on to the condos we each lived in before buying our primary shortly after we got married. Picking up some properties cheap during the 2008-11 financial crisis helped.  For most of my life I was busy with a professional career while slowly growing my real estate portfolio. Some of my guiding principals that got me to this point:

1) Buy and hold for the long term in good areas. I have rarely sold anything and never done a 1031 exchange. Not having frequent transaction costs in and out helps in the long run.

2) Any refinance I have done has reduced my rate and shortened, not extended my loan term. Aside from using credit lines on my rentals for other investments (when they were cheap and more readily available) I have never taken cash out on a refinance. 

3) I have never planned to rely solely on rental income to pay life's expenses, but over the long term, as mortgages have paid off, positive rental income has improved dramatically to the point where rentals do more than cover my family's expenses.

4) The idea of dead equity used to bother me, but I came to learn to accept and embrace it. Its there to utilize if I need it, but I don't think I will ever need to. I don't have any credit lines on my properties currently.

5) Real estate is a people business. Treat it as a business and treat your tenants and vendors fairly. Address any situation to avoid a build up of resentment if possible. Your good reputation pays back dividends and makes the real estate journey easier.

Not everyone has the mentality and fortitude to be an effective landlord. I am able to do it but it became evident early on that my wife was not cut out for it.