All Forum Posts by: Matthew Forrest

@Sarah Schmidt Love the idea of go big or go home! You can definitely do a lot (even in Austin) with $700k. You should be able to purchase a few properties with some leverage. What you choose to do (rental property, house hack, airbnb multifamily) almost doesn't matter as long as your do something!

This might be an unpopular take, but unlike the others I don't think the best think to do its to dive right into the partnership. From what you mentioned it seems like she's bringing the money and you are bringing the business acumen, but neither of you have much RE experience. Too me that seems like the lack of experience will result in some struggles which will put strain on your partnership unnecessarily. Consider doing a deal on your own or partnering with someone with more experience and come back around to the partnership with one of your close friends. To me, maintaining the quality of my relationships is more important than doing deals.

@David A. Just curious... what project management software (the checklist looking screenshot) are you using?

@Cameron Mertens It sounds like you made a very strong purchase and have already benefitted immensely from it! Congratulations. That being said, you've clearly found a strategy that works for you... so why would you mess with it and by a forever home? I'm definitely biased purchasing "forever homes" because of their massive financial burdens and poor performance relative to investment real estate, but if your goal is not to move, why no sign a long lease? The same triplex equity that you're looking at selling next could be worth twice as much in five year so you could buy twice as much home or shave years off of your working years. 

Obviously this is just my opinion and it might be a hard sell to your significant other, but if you run the numbers it's compelling.

Hey @Abel Guillen. So much to unpack there! First of all I don't think there is any question that you should have a lease and a formal application process. If your friends company is paying to need to qualify them financially. If the company qualifies, then I would lease it to the company with the a clause saying you need to background check and approve all occupants as well as have a cap on the maximum number of occupants for the property. I don't think that the girlfriend living there as well should impact rent. Two people is a reasonable number for an ADU.

If you feel that it really needs improvements then I would have that done yourself and not have the tenant work on them. Also, this sounds like a situation where the tenant is getting "free" housing so they're less likely to be picky on quality. Obviously the ADU should be safe and clean, but consider the cost of the upgrades vs the rent you'll be getting from your friends company. If the rent is the same with or without the upgrades, I wouldn't do anything except paint and clean.

@Shefali Golvelker My understanding of the Buena Park Municipal Code for ADUs is that the minimum rental term is 30 days (Section 19.348.010.B.17.c). Legally you can still have airbnbs, but the rental period must be longer than 30 days for the ADU. You can also look at living in the ADU and AirBnbing your main house without restrictions.

@Rick Albert From where I am sitting, CA is still the best state in the country from a quality of life perspective (yes its expensive, but you get what you pay for). Plus I recently saw some news that CA is working on making some property owners who missed out on rent last year whole. Link to NYT article.

@Tyler Foshe In LA's defense there are absolutely properties that you can get to cash flow. I bought my house with 5% down and built an ADU and it cash flows no problem. Yes, that cash flow is a low return on equity, but the appreciation has been great. In regards to the specific property in Torrance you were looking at, that's a new construction next to a Jiffy Lube and across the street from an oil refinery. In my opinion that makes the list price difficult to attain. If it were me, I would calculate max offer prices instead of calculating if something cash flows or not. Determine how much you would need to pay in order to get the returns you want and then make those offers even if they're below list. Eventually one of your offers will be accepted and it will be a great deal!

@Paul Bird Contact your internet services providers in your area to figure out what infrastructure you need in the house to connect to the pole. In my opinion you would want to give the ADU the ability to get its own internet.

@Gina Cabell Hey! I say let's go to Torrance all the time! In all seriousness the sentiment of what you're saying is correct. Torrance isn't a "vacation destination", but it is:

-reasonably priced (you can get a 3 bedroom house for $250/night)

- close to the beach or well located(West Torrance is less than a mile which is technically closer than some parts of MDR ;)  or close to the freeway and 20 minutes from all of the beach cities, MDR, Culver and a little more to SM and DTLA)

-clearly regulated and allows for AirBnb (from what I can see MDR and the beach cities make it hard to have an airbnb via disallowing them altogether, not having regulations posted at all which makes it hard to understand what the risks are or requiring owner occupancy)

I have a former coworker that cash flows more than $2500 a month in Gardena. Who wants to go there? I don't know, but if there is demand and the numbers work who cares.

@Mardochee Pierre I grew up in Queens and would love to help you make this work out. I'm not an agent and I have nothing to sell you, but I love looking at houses so if you make a trip out here and want to explore DM me and let me know if you want someone to join you. 

@Mardochee Pierre I know people that have an Airbnb in Venice (not sure how legit it is) and it PRINTS money. I'll follow-up today as ask if they have permits and everything. I made this comment on another short-term rental thread, but if you're not married to Torrance, you might also look at Long Beach, Joshua Tree, Palm Springs, and Mammoth Lakes. They're other cities with well clear rules around short term rental with good STR demand and solid appreciation.