All Forum Posts by: Lauren Alpert

@Jared Rine

Thanks for your response. To clarify, yes, I have a 4plex I want to pull cash out of. But I want to use the income from the new 5plex to qualify for the loan.

(I wasn’t able to pull cash out of the 5plex since it was already at 70% ltv )

Hello BP Community,

My husband and I just built a new 5-unit apartment in the Los Angeles area. For the two years it took to construct the units, we were unable to close on any new deals due to the high cost of the construction and the high interest construction loan we had to take out. Our debt to income ratio was wayyyy off.

Now that the units are fully rented and we are refinanced into a much lower interest rate, our current DTI is around 22%, Much better! The caveat is our taxes don't reflect this at all (the units have only been rented for 4 months).

My question is: would we be able to use the new rental income to purchase a new Conventional loan 2-4plex? Not interested in hard money for this venture since we want to keep the holding costs low / we plan to build a larger apartment and potentially demolish the existing structure in the future. I would ideally like to take cash out of our existing 4plex and use that as a down payment for the next one, while interest rates are still somewhat low.

I’m trying to get creative to keep scaling and moving forward. Any lender advice is welcome and appreciated.

I’m debating on selling my rental property (4plex) and utilizing a 1031 exchange to funnel the proceeds into a larger property (10+ units) to scale my portfolio, and retain some of the proceeds from the sale for future use. It would go something like this.

Proceeds from the sale would be about $600k. I’d like to take $500k and use a down payment on a $2mil property. Take the remaining $100k and save for future use - I lived in one of the units so I wonder if it would be possible to get a primary residence tax exemption for this amount?

Any feedback is highly appreciated.

@Salim Mhunzi

Denise Block and Associates

@Lee Ripma

Why would a low cap be a reason to invest in LA? Just curious of your perspective.

Thanks for all the answers. I decided to return the entire deposit back. These students will probably fight and win even though I took the necessary steps prior to them moving in. Next time I’ll take it a step further and spray 4 times perhaps. I originally thought a fair compromise was to keep half of the deposit, meeting them halfway, because the contract was breached and I offered a fail proof solution. The home was fully renovated, very nice, and I charged a bit less than market so there was value in what was provided to them. It certainly was not uninhabitable. I’m just not willing to roll the dice with California courts…

@Bjorn Ahlblad

I totally understand your perspective, but in this situation I think careless is somewhat of an overstatement. We have maintained contracts with major pest control companies for years. We did not see any live roaches prior to renting the home out. It’s located in a very very dense part of town. It’s difficult if not impossible to completely eradicate roaches from these rentals with 100% effectiveness. But I thank you for your input.

Hi BP community,

I have a rental in Los Angeles, CA near USC. The renters, all young college students, rented a 5 bedroom back house. 2 short weeks into a 12 month agreement, they decide to move out. The previous renter resided there for 15 years and had a roach infestation that we were not aware of, and to be honest, they were extremely dirty. We totally renovated the home and had pest control services come and spray a few times after they moved out, but apparently we needed a few more sprays before it was truly roach-free. The students’ decision to move early was largely based on the roach problem, however we offered to tent the home for pests to put their concerns at-ease. They ultimately declined our offer and chose to move elsewhere.

I requested a forwarding address from them and they eagerly questioned me about the security deposit being returned. I did not plan on returning it for the reason of breaking the lease and not receiving a full 30 day notice to move out. We had to scramble to find another renter, and we even offered a full fumigation despite the financial burden to put their concerns at ease. Anyhow, they told me they are going to have to “talk about it” and see if that will work for them (referring to my response that they will probably not receive their entire deposit back). I didn’t want to be rude but it’s not their decision to decide if I am in the legal right to do that. I also know that I am in a tenant-friendly state and city, and even if I am in the right to charge them, I might still lose if they pursue it. Unfair, but this is the reality. What should I do? What would you do??

I am interested! Please count me in.