All Forum Posts by: Lan Nguyen

@Michael T. I see, thanks for the tips. 

I am looking for a property to house hack in Cerritos, Cypress, Garden Grove area of California, ideally converted garage, or have detached garage because I heard that with detached you can turn it into living space legally?. I think I would spend around 15 years in the house, so remove conversion for selling later is not a concern really. 

I want to reach out to BP community for advices who know these area well. The house that I found so far is 600k, 3bd, 2 bath, some have bonus room, added space, etc but the rent is not too good. I will probably have to pay around 800 - 1k every month to cover all operating cost. And I don't know if tenant is okay when owner live in the back or maybe part of the house. And is it even worth it ?

I look up for school, crime, and amenities, focusing on the convenience in the perspective of the renter. I have been looking for 2 months, but found none that fit the criteria. Any suggestions from experts would be greatly appreciated. 

I have a contractor that built one from scratch, he does electric and pipe too, framing and everything from start to finish is 12k. I paid for material, his labor is 6k. Took 2 weeks.

@Rachel H. yeah, I have ask some of the local agents too, unless you live in the house, otherwise it will not be a good investment, they said in fact it is too risky and no one want to do it. Good to know, thanks. 

@Aaron K. you make an extremely good point, with $2000, one can easily afford for the house itself. Yeah I know I must be missing something, since no one is doing this, there must be a drawback. Thanks, and yeah I might need to look a little farther to find something that can cashflow. 

@Robert Clifford, sry for the confusion, I bought a Single Family house, not a property in the bay area. My bad, but you are right, seem like out of state is the best option to find something that can cash flow. Tho I have no connection, and still new to REI, so was thinking of staying local where I know the market.

Hi BP, I am a newbie so bear with me. 

I recently bought a SF and house hacking it with family members, it is negative cash flow of course, but not too bad.
I am qualified for an FHA loan for another SFR or MFR.
But it is just too rare to find one that can cash flow. And betting on appreciation is risky because CA market is all time high.

So I am checking out investment in Manufactured Home (MH) in SoCal areas like Cerritos, Anaheim, Irvine.
The rent from my research shows that normal SFR in those areas for 3bds/2brs is approximate $2500k.

The land lease for a MH with the same criteria is around $1200k - $1500k, and the house is usually 40k - 100k.

If conservatively saying, if renting out a MH for $2000k (often it is cheaper than normal house) then

Rent - (Mortgage + Maintenance)  - Land lease ≈ $300k

So would $300k cash flow is a right calculation, am I missing something, is there anything I need to watch out for when using MH as rentals?

MH is usually depreciated, so should I stick with normal SFR and MFR until I find something that can cash flow?

Every input are appreciated. And if you are familiar with the areas and have done something similar I love to get in touch and learn more about this.

Hi @Brent Coombs , yeah it is almost impossible to apply the 2% rule here is Southern CA, or even 1%. The rent is not even making 4800, the rent only comes out to be 3000. And the house is tiny, actually the 2 units combine is only 1653 sq ft. 

House pricing around LA area is just insane, but interestingly there are tons of cash buyer around the area. 

I see, this is very good to know, let me ask my realtor for the last appraisal. I just checked my county accessor and there is only 2 units, so the studio must be illegal. 

Hi @Brie Schmidt , yes the local realtor did the number with me and we approximately earn 400 dollars/month after all the expenses. I couldn't find anything this high for a more than a month so this one seem to be a good one.

About the no kitchen unit, it was built next to the garage, image below

I don't know if it was legally build or not, but i was thinking of attaching a portable cooking station outside the house. Still it is not very comfortable. 

Hi BP,

I want to purchase this rental multifamily property because the number work out pretty well, at least for Southern California area, but I am not sure if I analyze it correctly. Can someone help or advise if this is a good purchase

I use BP calculator and here is the number on it.

The property is 3 units, 

A: 2 beds 1 bath, and a small den => rent for about $1350

B: 1 bed 1 bath => rent for about $1000

C: A studio with 1 bath, no kitchen => $650

Total Gain = 3000      Total Expense = 2600

The house is on MLS for 535K, but it was sold on July for 335K. It was basically a flip, and the flipper wants 200k for his work. He didn't add any units. He did repaint everything and did the flooring, and fix the roof. I am not sure what he did with the interior of the house. 

Everything is remodeled, and ready to move in, if I offer 485K then I would make around $400 dollars a month, I do have 5% vacancy, and 10% cap-ex, 5% maintenance, which yield 5% CoCROI. Interest rate is around 3.5 to 3.8.

My concern is that the room is not that big, all the units are small houses. The studio has no kitchen so might be hard to rent. This area is not very industrialize, the house was build in 1944, and the neighbors is more like B to C tenants.  

And I have a feeling 200k for a flip is too much to ask for, but I don't know if he fix anything inside the house.