All Forum Posts by: Michael Cavalli

Good for you guys! I am excited to learn from you. I have a similar project I'm considering, but have no development experience. The property I'm considering has two older 2/1 houses on one acre that's zoned for 16 units. I'm thinking that maybe I could rent out the older houses at first to cover some of my expenses, and then build new units such as townhomes, or some other kind of multifamily units. Over time demolish the older homes and finish building out with the rest of the 16 units. I don't know if this is realistic, or what. I feel that I'm getting over my head. How are you guys able to competently move forward with your project? Do you have development experience or do you have access to someone who does? 

Hi Keith,

Great job at being creative and adding value to the property! Was this a property that you were living in, or did you buy it solely as a rental? By the way, I'm down here in Hamilton and searching for our first investment property. Maybe we can connect sometime.

Michael

@Colin Chan, I just checked Redfin and it has the correct bedrm/bath and sq footage info. I think you're looking at the wrong property. 

Thank you @Lawrence Leung. I appreciate the time you take in explaining things for me! You've made some very good points that I will definitely share with my sister! Thank you very much.

Thanks for your advice @Mike Bolen and @Dylan Vargas. First of all, Mike, the property was originally in the county, but then the city extended its boundaries and therefore it is now in the city. We pulled permits for everything so it was all done to code. The house is in good shape with new plumbing throughout, new furnaces, etc. Dylan, the market has definitely been hot for certain price points, but our property prices out above 1 million because it's an acre of land in the Napa Valley. Therefore, because of its arrangement, it's in an odd niche. (By the way, most comps seem to have had the same issue with high DOMs.) Regarding the realtor, we have been thinking of making a change. We did drop the price at the start of this year, but no offers yet. Just talking about make offers. My sister is hesitant to lower the price too much because it's basically all my mom has in her estate. 

Thank you Lawrence. I like your idea of covering my bases by having it listed and also exploring renting it out at the same time. I also hadn't thought about being able to pull out money through a refinance once I have a tenant. That's a great idea! Tying up my money into the rental was the only reason I was leaning away from renting it out. My mother could really use the income as well. Thank you!

Thanks guys for the quick response. I should have mentioned that while my father has died, my mother is still alive so the house is in her estate. None of us actually even live in Napa anymore. Greg, you bring up a point that I didn't know: California's government being hostile to landlords. I knew that to be true in San Francisco, but I didn't realize it was throughout the state.

Hi everyone. I'm not sure if this is the right place to ask this, but I need some advice. The situation is that we moved in to take care of my elderly parents several years ago and ended up adding onto their house so we could live there. Now that we've all moved on, we have a two-family set up on one acre that has turned out to be hard to sell. As I said, it's my parents' home, but I had to put money into it to make room for my family. Therefore, all of my available real estate money is locked up into it. Since it hasn't sold, we can't buy a new place for ourselves. We are now wondering if we should just keep it and rent it out for income. It's a large (almost 4,000 sq ft) two-family set up (2 bdrm/2 bath home on on side and 2 bdrm/1 bath home on other side) on one acre with no mortgage in Napa Valley. We're open to any ideas. Thanks in advance!

Hi Tyler,

Thanks so much for the time you put into your response! I should have mentioned that my son would be in there first with paying roommates.  My daughter will follow with her group of paying friends as well. Since I don't live in the town, I like the idea of having them in the house keeping an eye on things for me. My son, since he's graduated might pay a low amount of rent, but we would cover my daughter's rent until she graduates. Again, thanks for your help in making this decision!

Hi everyone.  My wife and I want to take action and purchase our first rental.  It will be for my son first and then my daughter as they go through college. (My son needs a place this fall, and my daughter will when she moves out of the dorms in another year.)  I have the ability to pull out and use one of my two retirement plans for a down payment. (I used to teach in Oregon so have about $49,000 as a lump sum that I have access to now without penalty.)  

My question is whether I should use this $49,000 towards a rental now, or leave it in my account which will supposedly grow to be about $85,000 in 9 years.  I could then pull it out as a lump sum amount, or begin receiving about $681 monthly as long as I live. (These numbers are the state's calculated projections.)

It seems that, based on so many examples of Biggerpocket investors, if done correctly, I could come out ahead using something like the BRRR method and eventually be able to pull out my initial $49,000 and then repeat with another deal. Yes, I would be giving up a sure $681/month in 9 years, but I believe that during these 9 years, I could potentially end up with more wealth in the long run.

Am  I way off here?  Thanks in advance for any help with this. 

Michael