All Forum Posts by: Krystle Moore

@Sherry Chen I feel most comfortable investing in San Diego because I know the market but we are considering the idea of investing out of state with the right team. I would only do it with a larger building though. In San Diego, I really like National City. The city is easy to work with and the mayor wants to grow and improve the city. We have units in Old Town and La Jolla Shores. I also really like Vista, Oceanside and IB for investing. I like City Heights in the right areas - basically hugging North Park.

Yes, that's true. I do multifamily financing for a living and in Southern California we're usually limited by debt service so we rarely achieve the max LTV. We got 68% LTV on this property and have invested about $150K so far. We are in the process of redoing the pool and still working on the most cost effective solution for the hillside.

There are a few lenders that have market rents programs that can get a bit higher LTV when in place rents are below market.

We have 2 tenants who have small balances and lost jobs due to COVID totaling about $4K, so very minor loss there. We have some vacation rentals and the income was definitely lower early on but we're back to our standard rates and have been for about 3 months. Now we're booked solid. Thankfully! We're down about $30K from what we should have had. When people were cancelling their vacations, we dropped our rates by about 70% just to fill the units and keep cash coming in to at least cover operating expenses and the mortgage. 

Hi! I know this thread hasn't been active for a few weeks but if you're still looking to make connections, I am a local multifamily investor in San Diego. I do multifamily financing and my husband does residential. We also have a podcast, ValueAdd with K&K, and talk about investing in apartments and creating generational wealth. We host webinars on many topics real estate investors deal with. This week we just did a webinar on Cost Segregation. We have another webinar coming up on 11/12 with Suzanne Baker, General Council for IPX Exchange to talk about 1031 exchanges. Our main goal is to educate, inspire and help people grow a multifamily portfolio.

I'm always happy to answer questions or refer you to professionals we work with to help you on your journey. :)

Investment Info:

Small multi-family (2-4 units) buy & hold investment in La Jolla.

Purchase price: $1,900,000
Cash invested: $850,000

4 unit vacation rental

What made you interested in investing in this type of deal?

The location and vacation rental opportunity. When we purchased the property, it was a long term rental with one unit left vacant for the seller's to allow family and friends to stay. There are very few hotels and 1 bedroom vacation rentals in La Jolla Shores. The property is also condo'ed.

How did you find this deal and how did you negotiate it?

Through an agent. The property had been sitting on the market for a while.

How did you finance this deal?

Initially, we got a private money loan - had to close quickly. Then we refinanced into a low rate 7 year fixed, interest only.

How did you add value to the deal?

We converted the units to vacation rentals and significantly increased the income. We more than doubled the income we were getting as a long term rental.

Lessons learned? Challenges?

We have done extremely well with the vacation rentals and would love to do more.

Investment Info:

Large multi-family (5+ units) buy & hold investment in National City.

Purchase price: $5,700,000
Cash invested: $2,000,000

29 unit apartment building with one unpermitted unit. Currently in the process of getting the unpermitted unit approved as an ADU.

What made you interested in investing in this type of deal?

My goal is to own large multifamily projects (50+ unit buildings). We were able to sell a 7 and 9 unit building that we rehabbed and trade into this deal which gets us closer to our goal. We would like to own 100 units within the next 1.5 years.

How did you find this deal and how did you negotiate it?

We found this deal through our broker. This deal had been on the market for a while. There is a hillside issue that we are actively working to find the most cost effective solution to fix. We were able to negotiate a reduced price and satisfy our 1031 without bringing any extra cash into the deal.

How did you finance this deal?

We financed it through a bank with 5 years interest only which has allowed us to reinvest our cashflow into adding value to the building.

How did you add value to the deal?

There are 2/1 townhomes which are a bit awkward - the only bathroom is upstairs. As units turn, we are adding a 1/2 bath under the stairs on the main level and also adding laundry upstairs where the existing linen closet is. We are getting about $200 more rent and charging RUBS. We are also getting the unpermitted unit approved as an ADU and increasing rents annually as the market allows.

What was the outcome?

Our cashflow was about $8,500 per month when we closed, we are now getting over $11K per month in cashflow and have increased the value over $900K in 17 months.

Lessons learned? Challenges?

The property is on a hillside and it seems like it may end up being more expensive than we thought. One of the buildings is settling so we need to address it soon. Additionally, if we want to sell the building in the future to trade up, we will need to address this for any potential buyers.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Dave Plutner is our real estate broker and he is just amazing. He doesn't work with just anyone, he really works as an advisor and helps you grow your portfolio.

Constellation Management is our property manager and they are just great at what they do. I used to own a property management company and managed over 1,000 units so I have experience in management. They operate like owners and I appreciate that.