All Forum Posts by: Katie P.

Not familiar with your market, but if that deal existed here in the Bay, I'd hop on it. How stable are the tenants? Is there a hospital nearby or some sort of attraction where you could make one of the units a short term rental? I'd definitely ask someone who is familiar with screening Section 8 tenants what to do before making that move.

Hi @Account Closed, 

I tried to make a similar move a few months ago on bank-owned triplex in Fruitvale, and I got mixed information about what I could do. That said, I'm pretty sure this is the rule: your 3 - unit property is NOT exempt from rent control until you have occupied the property for two years.  After two years, you have to get a certificate of occupancy and petition the rent board. 

A certain local law firm (will PM you) sent some information that made it seem like I could evict the other tenants simply because I was owner occupying one of the units, but I doubt that's the case...Unless of course you have just cause to evict them. I'll have to brush up on the capital improvements section of this document concerning your plan to renovate the units (I think you can evict them to make major renovations, but then you have to offer it back to them after you're done?), but here is the link to the document:  http://www2.oaklandnet.com/oakca1/groups/ceda/docu...

There are also quite a few other posts in the forums that talk about rent control in Oakland, allowed rent increases, and cash for keys: 

https://www.biggerpockets.com/forums/52/topics/451...

And here's some more info about the amount you could raise the rents from the first forum link listed above: 

Originally posted by @Alex Capozzolo:

Rent Control for Oakland:

- Starting July 1st, 2017: You can raise your rent 2.3%. This has been increased 0.3% from the previous year. Great news for landlords.

- Frequency: This can only be done ONCE every 12 months. Even if you don't use the entire 2.3% (i.e. you raise the rent 1.0% to start out) it still freezes your ability to raise the rent for the next 12 months after that.

- Rent raises do rollover ! However, only up to 3x the current CPI amount. For example, if you haven't raised the rent in 37 years - like the real life example above (although that took place in SF, not Oakland) - you can only raise the rent a total of 6.9% if you do this after July 1st of 2017.

- Important: Also, make sure to give your tenants at least a 30 day written notice of any rental increase!

You can read more up on the specifics of the regulations here!

Also, check out this link for some information on Fees!

Anyway, like I said, I'll PM you with the info from that law firm I mentioned. If you're getting into the property below ARV and you can take the low rents for two years, I'd do it.

Thank you, @Brett Goldsmith and @Jay HinrichsGuess the H/O cared more about having more cash in hand than the foreclosure being on his/her record. Still curious about these third party/attorney fees to see what % they take. Sounds like motivation for them to encourage the H/O to go to auction.

Yes, @Jason D., I walked away. =) 

Thank you, @Sean Richway. 

@Matt Williams, just want to know if there is some other creative strategy (like a "subject to") or attempting a short sale package with the bank that would have made this work. If other investors say they could have made this work (due to lower construction costs or lower holding costs), at least I could have put it into contract and wholesaled it for a small(er) fee. 

Some have suggested a short sale package and to justify to bank with repair estimates. My understanding is that the bank is highly unlikely to honor this if the home appears to have even a little bit of equity.

@Joel Mallo, as everyone above has said, it depends on what the homeowner needs/wants. And we are transparent about what we plan to do with the property. We walk in with the intent to acquire the property at 75% ARV minus repairs, and some homeowners want almost all of the equity to walk away with. Others have tons of equity and just want to get out asap. Before putting ANY number on the table, I ask what them what they need to walk away with. If we can still make it work after doing a subject to (or, if the property doesn't need extensive repairs), we don't necessarily follow our 75% of ARV rule. Yes, some homeowners might walk away with more money if the home was listed on the MLS, but I've see too many homes still go to auction after listing with a realtor; the bank does not necessarily push back the auction date because the house is listed on the MLS. AND I've tried to reach out to the listing agents of some of these properties, but they often say "oh, I already have a buyer" or won't get back to me after our initial conversation. And then the house goes to auction. If you're the realtor who is listing the property, the idea @Account Closed

@Joe Liu I have a Whitepages Premium account ($30/month), which doesn't always provide accurate email addresses, but it's pretty accurate with phone numbers. I have the best luck when I do the reverse address search. 

@Gary A. I use Property Radar (Trustee Sale Search option) to find that info. 

So, just want some ideas on a recent situation with a motivated seller in South Bay Area...... 

SFR: 4/2 over 2067 sq. ft. with 10,000 sq. ft lot and pool

Illegally added 3rd bathroom and kitchen added to dining space 

Repairs needed: 

-New windows

-new paint interior and exterior

- has small kitchen (could knock down wall between living and kitchen or between kitchen and hot water heater closet in garage)

-complete rehab of two baths and kitchen

- pool supposedly worked but not confirmed (was empty) 

- new fence in back

- new hot water heater and furnace

- new garage door needed

- landscaping in big back yard

For US, the conservative estimate for repairs was $60,000 - $70,000. 

Amount owed: $826,000

ARV: $970,000 - 1 million

We would have used hard money (80% of acquisition price) at 10% interest + 2 points and private money (20% of acquisition price and no points).  

@Luke Mccandless

Welcome, @Tim McGarvey! Hope to see you at the next East Bay weekend meetup on September 17th (4 - 6:30 PM) at Berkeley NextSpace. It's bart-a-ble from SF. =)

Hi all, 

We will be hosting the next weekend event on Sunday, September 17th from 4 - 6:30 PM at NextSpace in Berkeley. We plan to have breakout sessions in the following categories, but we can adjust: 

1) Out - of - state MF Investing 

2) In - state MF Investing 

3) Flipping 

4) Financing 

NextSpace is BART-able (it's foot steps from downtown Berkeley BART), and it's close to lots of restaurants and bars if we want to continue networking after our booked meeting time.