All Forum Posts by: Drew Leo

You'll need to provide the property location and what your needs are.  If you have a good job then N/W Clovis is a place decent for good living away from the city center.  If you're near all the intersections of the city then there will be more rental opportunities but you'll need a property manager since turn over is much greater. 

Using this map: https://www.google.com/maps/se...

The intersections of all those freeways are majority C-class and lower income.  Rents can be roughly $650-800 for multiplex rents.  Westside (west of 99) is quieter, more spread out, lower income.  There can be some fair purchases in the area you're looking for but the vacancy rate can be high so include at least a 11% vacancy. During this pandemic time, it can go to 16%.  I'm in Socal like you and Fresno can be a good place to invest.  

My brother is getting his 2nd apartment and I am a silent investor. Based on our conversations with attorneys and other investors, the LLC would be more paperwork, moving things around, add the expense of $800 (California) per year when the the cost to gain a much larger umbrella coverage for $200 a year. This would essentially double our coverage of $1.5 mill to $3mill. We maintain a side business license and even though it would have cost us zero to use that small business to hold the new 2nd apartment, there would have been a more education on using it to hold property. He is buying the apartment in cash and in 2 years he will bring in mortgage and liquidate 50% to all the investors with interest. If bringing in a mortgage...that lender most likely will not discriminate to human owners over an LLC. If we have the apartment in the LLC's title, the interest rate will likely be higher so he is preparing for the next step: look presentable now. It may work for us to keep things simple legally and administratively.

@Michael C.

LLC is a business you will be setting up to run and operate as a business. There are to be members , and accounts in the business, and licenses to operate. In some states it costs $800 annually for the business ID . In the beginning of investing it will be nearly impossible for the LLC to buy property, approved for a loan because no banks would loan to a no history business . It's the same as loaning money to a 1-old baby: no credit, no job, no income, no history. When one personally owns a property with mortgage and desires to transfer ownership to the LLC , it could face the same scrutiny: mortgage company would not allow the transfer to a no history, no income owner....like a 1-year old baby.

Brian:  Yes a perfect situation would be a separate bldg but those are harder to come by. 

Sant Li:  Fire rating, yes. That’s a good point that every structure is used to sustain or maintain its integrity to help suppress fire 🔥 spread. Didn’t think about that. It would be excellent to get a pro’s evaluation if the wall needs to remain as is or can it be cut through. Thanks!

Hoping that the 2 kitchens are near one another or back to back (plumbing & gas).  The notion of having 2 kitchens isn't much of an issue to; one can serve as pantry or storage.  Living here we are not hosting parties, relatives, friends.  It's our work place.  It should not be a permitting problem (as long as it's sound, safe, non load bearing wall we are cutting the door into) since it's interior & should not involve the city.

Theresa Harris: Yes, being mindful of a reluctant wife/partner/investor is a big challenge. Getting into a good neighborhood that doesn't have lots of MFR will be the key and difficult to locate. Don't see any MFR at the moment that has the higher returns that would out weigh my current situation.

In Los Angeles California, mid-40s w 2 kids, good jobs, have personal SFH 1900sqft valued @ $715K w/ $300k equity. Have 3-plex investment 3hrs away, $250K value , positive flow of $100 per unit, $60K equity, hiring property mgmt. Option to sell both to pursue a bigger live-in investment. Thinking of getting a 4 unit apartment (2bd/1bath in $900k-1.3 mill range) in Southern California , live in side-by-side units (approx 800sqft each) + looking to cut a doorway/breeze way between to connect the 2 units and make it into 1 space. Thinking this simple construction (no door needed) will provide my personal living dwelling with 4 bedroom + 2 bath, we can get owner occupied lower tiered loans, self manage the other 2 units, maintain grounds & property since I live there, I also can reduce my current job down to 18 hours a week because we can afford it on 1 income, we have $100K+ we can easily tap into, I have basic handy man knowledge from helping my in-laws show their apartments, light and quick fixes.

Objective is to advance our RE investment more aggressively = shorten our retirement timeline by 3 years.  Assumption that the approx $4800 mortgage will be covered (my 2 units @ $2400 + $3200 rents = $5600)

Cons:  Living with tenants, neighborhood won't be as good as current place [Covina], we can shuttle the kids back to their current school district if we don't like the apartment school district, quality of neighborhood will drop 40-50%, wife prefers privacy. 

Pros:  About 2 extra days more with family, perhaps tenants will be more on their toes, I can catch & address problems faster

Let's hear thoughts & opinion. Why doesn't the cut out between the units work in this situation? Have you done this yourself or heard of anyone living close to a few tenants?  Anything I'm missing with self-managing an apartment complex I live in with family & kids? 

Like all of this 'build on property ' projects, most cities are reluctant to move things along for things that are not the norm. The rules in California are getting more and more defined however it still doesn't make the process easier. Adam B: As long as you large enough property (JADU is quite easy besides plumbing & HVAC) adding ADU can be possible. In Cal the state law has addressed having all 3 on the same land.