All Forum Posts by: Leo B.

@Steven Trang

Welcome Steven!  BP is a great community to learn and network in.  If you are looking for turnkey properties, there are quite a few providers here on the forums.  I find @Jay Hinrichs website (turnkey-reviews.com) very useful.  @Mike D'Arrigo (he's local to the bay area) also has great podcasts worth checking out and he gives a good overview on out of state investments on his website.

Are you looking to purchase SFH turnkey properties? Generally speaking, what are the price points and rents going for B/C turnkey properties in Birmingham?

@Debra R.

Hi Debra.  I've looked at multi-families in SF and Oakland and I'm not surprised this went over asking.  It's close to Jack London Square area with restaurants and bars, and BART which are a great appeal to the young hipsters employed in tech.  As most have already said here, investors purchase buy and hold property here in the Bay Area for the appreciation.  However, there are some considerations to think about for cash flow in these types of properties in the Bay Area.  Although the tenants are under rent control, there has been quite a bit of activity over the recent years on buying long term tenants out of their lease to get them to move out.  I know in SF, the buyouts have been as high as $40K believe it or not!  But considering a 1 bedroom 1 bath in Hayes Valley being rented for $650 to a rent-controlled tenant and market rents at $3K, the $40K investment will be made up in a couple years or through forced appreciation via the increased income the property produces with the new rents.

@John Ching

Thanks John! I see you are a mortgage broker. Do you offer portfolio loans in IN and WI?

@Mackenzie Kelly

Thanks for the reply, Mackenzie! For the tax ID number, is it an EIN or TIN that I apply for an LLC? I already have another EIN for a sole proprietorship that the IRS mentioned I'm allowed only one EIN. Do you know if a second EIN for an LLC is possible?

I just filed for my LLC in the state of California. I've never heard of the Doing Business in California letter requirement for a bank account. Is this the statement of information for the LLC? If no, where and how did you get the DBA letter? Also did you need to obtain an EIN to open up a bank account as well?

Thanks,

-Leo

@Joshua Jarvis

Please send info to [email protected]

Thanks,

-Leo

@Chan K.

PM @Wendell De Guzman.  He hosted a webinar on this topic a couple weeks ago.  He can provide a reference.

@BreAnn Stephenson

Hi BreAnn.  Thanks so much for the info and the comprehensive reply!  This helps a ton!  I'm thinking maybe I can build the heating requirements into the lease agreement (just like for replacing batteries in the smoke detectors).  Ultimately, I understand the liability falls on the owner of the property; hence, my question around insurance.  The endeavor to add the heating requirement to the lease might serve as documentation to the insurance company in the event of a claim.  I'll double check with them.

Thanks again!

Best,

-Leo

Good discussion here.  If this was purely a cash flow discussion and all things being equal (vacancy, etc), then obviously the higher the the % rent ratio the better.  But if appreciation of the investment comes into play, then some may opt for the 1% over the 2% in place for long term appreciation.  Just throwing out conservative appreciation numbers there based on what I've read and my experience here in CA.

5 X $50K SFH, Midwest city, 2% rule, 0% to very low appreciation in 5 years

$250K MFD, California, 1% rule, 20% appreciation in 5 years

I guess it depends on your strategy and goals, short and long term.