All Forum Posts by: Maya Gorski

Everyone!

I'd like to invite everyone to our next upcoming meetup in San Diego.  We will be touring a current fix and flip rehab property.  If you've ever been curious and wanted to learn about fix and flip investing, come through to the event and meet and learn from other investors! The meetup is on August 31st, 2022 from 5:30pm - 8:30pm.  RSVP at the meetup.com link below or send me message here on BiggerPockets to get the property address.  I hope to see and meet you guys at the meetup!

https://www.meetup.com/san-die...

Hi have the same Q re the lender. Pls lmk. Thx!

This is my first time trying to learn how to comp correctly. I was searching through Redfin and came across this address 16 E Olympia Ct, Chula Vista, CA 91911 (3-2 1348 square feet in listing but public facts say it is 1072) says first time on the market for $595K (posted 8 days ago) although it also shows sales history in 2001 so there are many discrepancies with this listing but says motivated seller and has not been renovated.

Comp 1- 53 E Paisley St, Chula Vista, CA 91911 a few streets over. Much larger house sold for $696K 1 month ago.

I found a similar address 14 E Oneida Ct, Chula Vista, CA 91911 that sold for $800K the next block over which sold 4 months ago although there are no pictures of the sold house. 2 car garage instead of 1.

Another similar comp on 25 Plymouth Ct, Chula Vista, CA 91911 which sold for $700K 2 months ago although it is across a major st so that may effect the comparability. Also has a 2 car garage instead of 1.

Should I use the lower estimate of $696K ARV or lower it some more? Maybe use $650K?

If I use the Bigger Pockets calculator attached and plug in $45 per square foot Reno ($65K) and $30K profit I get an offer price of $494K max.

As I am trying to learn, am I going down the right path of comping? This one didn't seem to have very many good comps recently. I don't have any funding yet and am planning to apply for hard money lending this week to keep the ball rolling on this journey. Also since I am a GC I am pretty sure my team can do the Reno for less than $65K but trying to stay conservative. Any feedback highly appreciated.

We currently own our home in California. We are looking into a HELOC to put a down payment on a second residency in AZ. Our daughter goes to college there. Navigating where to inquire about a HELOC is new territory for us. Any suggestions would be very much appreciated.

Sara - San Diego, CA

Quote from @Maya Gorski:

Quote from @Dan H.:

Quote from @Greg R.:

Quote from @Dan H.:

Quote from @Greg R.:

Quote from @Michael Wooldridge:

Quote from @Carlos Ptriawan:

@Carlos Ptriawan rent data is messy as you pointed out earlier in this thread. ON an annualized basis which is what I was referencing it hasn't happened. Would love to zoom in on the dollars in that monthly swings refin one is there a link to the chart? Meanwhile annualized data from multiple sources: 

OK understood, I use quarterly (short-term data) while you use long-term smoothed data, obviously, the result would be different.

I also want to point out, if 2019 data has  the rent-to-income ratio as 20.1% but in 2022 it's 20.5%, the line is actually stagnant, there's no real actual rent increase although the $ seems to increase. that's just an adjustment to wage. 

 Yep I'm just not concerned with short term shifts because every market/investment has it. I try and look at the trend over time.

As to the bolded section stagnation has happened. I would fully agree and go so far to say I expect it this coming year. But hte funny thing about inflation/wage adjustment:

1) I've made that very argument as to one of the main reasons why rent won't drop next year. It's not that far off if you adjust for the last 12 months of wages and inflation.

2) my primary reason for calling out rents have never dropped annually is because of @John Carbone prediction that rents are going to drop and people will magically be hurting the next year for profits if they bought recently. Historically that has just not happened. Especially in such a good job market (and even 5% unemployment is good if the fed can even push it that high) and while inflation is happening.

I don't know if we're going to see a drop in rents. However, I wouldn't be surprised if they did correct some. I don't have a ton of data to support this, just one personal example. My cousin moved out of CA recently and put his house on the market for $4,500 in early August. Definitely on the high side, but he should have been able to get 4k all day. However, he's now down to $3,550 and dying a slow death. 

This is a suburb of San Diego, not a lot of rental availability and rents are very high. I have rentals in the same city and every time I have a vacancy it's like a black Friday sale. Seemingly hoards people lined up around the block - a lot of them good A+ grade renters. 

 Rents San Diego county wide have continued going up even as RE prices have fallen. YOY  in my market the rent appreciation has averaged over 10%.  $4k was always high rent for that unit.  Rentometer lists the average as $3450 based on six 4 BR comps.  It also shows that the highest rent ever for that unit is the current rent.

 This property has been owner occupied for almost 10 years, so there's no recent/ relevant rental history for this exact property. I agree that the original listing price was too high, but I've seen other similar properties go for around 4k. He is renting it furnished with an 80" TV. These kinds of prices have been common in East county over the last year. I'm a bit surprised he can't find a renter for $3,550

https://sandiego.craigslist.or...

https://sandiego.craigslist.or...

It was not clear to me that it was being rented furnished. I do not know how furnished affects LTR rates. If it is furnished, did they consider STR or MTR? we have local STRs that have done well, but they are not in El Cajon

as for those “comps”…. They are not comps as neither referenced is rented and the second has been listed over one month.  The first has been listed at least 18 days.   it has been years since one of my rentals took 18 days to rent.   Comps have to have found tenants willing to pay the rent.  Rentometer is fairly accurate and used 6 comps.  

if the property is special, it can dictate rents far above the average rent but it has to have something making it special.  

Just my $.02--I've been watching the El Cajon rental market for the last two years and have seen no decreases yet. I know there aren't many 4 bedroom units out there but part of me wonders if families or groups of people that could use the 4 bedrooms would really want to have more than 1 bathroom.

Sometimes I checked keyword for "reduced" in craiglist, these two markets seems having more growing reduced rent.

There're a lot of reduced rents.

https://sfbay.craigslist.org/s...   median is $3250 

https://sandiego.craigslist.or...  median is $2378

Bay area median of $3250 seems rent price is almost normalized.

Quote from @Greg R.:

Quote from @Dan H.:

Quote from @Greg R.:

Quote from @Michael Wooldridge:

Quote from @Carlos Ptriawan:

@Carlos Ptriawan rent data is messy as you pointed out earlier in this thread. ON an annualized basis which is what I was referencing it hasn't happened. Would love to zoom in on the dollars in that monthly swings refin one is there a link to the chart? Meanwhile annualized data from multiple sources: 

OK understood, I use quarterly (short-term data) while you use long-term smoothed data, obviously, the result would be different.

I also want to point out, if 2019 data has  the rent-to-income ratio as 20.1% but in 2022 it's 20.5%, the line is actually stagnant, there's no real actual rent increase although the $ seems to increase. that's just an adjustment to wage. 

 Yep I'm just not concerned with short term shifts because every market/investment has it. I try and look at the trend over time.

As to the bolded section stagnation has happened. I would fully agree and go so far to say I expect it this coming year. But hte funny thing about inflation/wage adjustment:

1) I've made that very argument as to one of the main reasons why rent won't drop next year. It's not that far off if you adjust for the last 12 months of wages and inflation.

2) my primary reason for calling out rents have never dropped annually is because of @John Carbone prediction that rents are going to drop and people will magically be hurting the next year for profits if they bought recently. Historically that has just not happened. Especially in such a good job market (and even 5% unemployment is good if the fed can even push it that high) and while inflation is happening.

I don't know if we're going to see a drop in rents. However, I wouldn't be surprised if they did correct some. I don't have a ton of data to support this, just one personal example. My cousin moved out of CA recently and put his house on the market for $4,500 in early August. Definitely on the high side, but he should have been able to get 4k all day. However, he's now down to $3,550 and dying a slow death. 

This is a suburb of San Diego, not a lot of rental availability and rents are very high. I have rentals in the same city and every time I have a vacancy it's like a black Friday sale. Seemingly hoards people lined up around the block - a lot of them good A+ grade renters. 

 Rents San Diego county wide have continued going up even as RE prices have fallen. YOY  in my market the rent appreciation has averaged over 10%.  $4k was always high rent for that unit.  Rentometer lists the average as $3450 based on six 4 BR comps.  It also shows that the highest rent ever for that unit is the current rent.

 This property has been owner occupied for almost 10 years, so there's no recent/ relevant rental history for this exact property. I agree that the original listing price was too high, but I've seen other similar properties go for around 4k. He is renting it furnished with an 80" TV. These kinds of prices have been common in East county over the last year. I'm a bit surprised he can't find a renter for $3,550

https://sandiego.craigslist.or...

https://sandiego.craigslist.or...

It was not clear to me that it was being rented furnished. I do not know how furnished affects LTR rates. If it is furnished, did they consider STR or MTR? we have local STRs that have done well, but they are not in El Cajon

as for those “comps”…. They are not comps as neither referenced is rented and the second has been listed over one month.  The first has been listed at least 18 days.   it has been years since one of my rentals took 18 days to rent.   Comps have to have found tenants willing to pay the rent.  Rentometer is fairly accurate and used 6 comps.  

if the property is special, it can dictate rents far above the average rent but it has to have something making it special.