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All Forum Posts by: Drew Leo

Drew Leo has started 2 posts and replied 71 times.

Post: Rental Property Investing in Fresno, CA

Drew LeoPosted
  • Investor
  • Walnut, Ca
  • Posts 72
  • Votes 36

I have felt the heavy fist of the city on me on my 2nd month with my MFR. fines for this and that even though we addressed the issue. It wasn't good enough so a good allowance account was necessary to not lose sleep over the work that was required.

One fine was that they didn’t like that (the previous owner) small garages were converted to storage with new metal fencing about 6 feet away to secure the property. The property provided what the tenants wanted and it was very secure however the city deemed homeless will figure out no movement would be there and break in to live. Sheesh. A 8foot new chain linked fence then a solid wood door with pad lock was not good enough. 

Post: Rental Property Investing in Fresno, CA

Drew LeoPosted
  • Investor
  • Walnut, Ca
  • Posts 72
  • Votes 36

Fresno for multifamily has potential through the 8 months of looking at the area and purchasing my 1st MFR. The bad neighborhoods are were some values can be had. Although there are some units that are as low as $70K per door, it's not where you want to be. Leave those to people who are looking to live there and they have 2-3 full time workers in the house hold to pay for it.

I bought in a decent low class neighborhood with small multiplexes and SFR on good street. Due to the some poor renters (could be they were placed in there by previous owner to cushion/pad the 100% rental income) we were some how hit with a few very surprising expenses all in the same month. The 2nd month demanded an extra $17K of work which we anticipated to spend $25K with in the year but the costs was unexpectedly in our face.

I enjoyed my process and find so far but if I didn't have get the 'deal' I wanted than I would be quite unhappy.  Note that majority of what you are seeing on the market are investors letting go of the property.  Many could be selling after sinking $10-15K annually and on their 4th year they are trying to let it go.  

There are some good bones properties I liked during the bidding.  Check out my other posts since they are not too old.  I travel into Los Angeles & Orange County so if you like to meet up , we can talk.  

Post: Investing in rental property in Fresno, CA

Drew LeoPosted
  • Investor
  • Walnut, Ca
  • Posts 72
  • Votes 36

David: That was my thought too however referring to the last 20-30years when ever there is a SFR real estate downturn , rentals come into higher demand because it is serving more people (SFR are pushed down to rentals) this competition is higher.

It is good to note that when people can't afford houses , rents remain relatively strong. I read that out of the 12 years of the SFR down turns & reduced , 3 years rents reduced. With that said , it could always be a good time to look at rental investments over SFR in general. My optimism could be higher than others

Post: Investing in rental property in Fresno, CA

Drew LeoPosted
  • Investor
  • Walnut, Ca
  • Posts 72
  • Votes 36

Been looking at Fresno for about 11 months and it's fair for California RE.  In a "C"  neighborhoods are the real money making possibilities.  Touring with locals the good area of Clovis have no room for investor growth, just good homes to live in.  Tower and south of Cal State Fresno are where the deals are but majority of lower income folks live.  The rental game in these areas are to properly manage them swiftly and even being available weekly to handle problems.  The discounts buyers may get are a trade off because the vacancies, problems, people relationships can drain the 5-9% cap rates down to 3%.  Go in there, Airbnb in Fresno not Clovis...see some agents.  The good ones are well verse to work with investor. 

Post: Fresno, California

Drew LeoPosted
  • Investor
  • Walnut, Ca
  • Posts 72
  • Votes 36

Recent folks that met up.  Learn anything?  I closed on my triplex in Frenso last month.  It was a looong process but the deal worked and so far worth while.  Do know any lenders but found good agent and prop mgmt.

Post: How Much Do You Pay Your Property Manager?

Drew LeoPosted
  • Investor
  • Walnut, Ca
  • Posts 72
  • Votes 36
In California to be a legal functioning manager, a real estate license is required, in order to qualify the manager to negotiate contracts: explaining the rental terms & condition and getting into a binding agreement with the new tenants, releasing tenants, or adding tenants to an existing rented property and MAYBE evicting a tenant.  From what I understand one can have a relative, another tenant show the place, manage the physical repairs, and collect rent.  That relative with no real estate license just cannot sign or even advise on what the rental agreement means to new renters.  
So the loop hole is to manage filling out the unit/property yourself (even without a license but as a property owner) and once someone is in there, a grounds man, handy man, relative, or another tenant can do the day to day NON-contract duties. 

A Fresno PM is asking 8-9%.  


Originally posted by @Mitch Kronowit:
Originally posted by Steve Babiak:
In some areas, a property manager is required to have a real estate license. I believe there are some exemptions to this such as employees (like buildings with lots of units under one roof). A property owner can always serve as property manager of course.

Good advice. In California, you have to have a real estate license to manage somebody else's property, but what if they're a family member?

My parents are thinking of renting their house and scaling down. They would like me to take care of their house for them since they don't trust anybody else. Would I need a RE license in California to manage my parent's property? The house is held in a living trust with me as the successor trustee if that makes any difference.

Thanks BP team.

Post: Multi-unit investing in Southern Ca.?

Drew LeoPosted
  • Investor
  • Walnut, Ca
  • Posts 72
  • Votes 36

Todd: I live in LA County that is 1 hr from Victorville.  Now those places to me are like armpit areas.  Very few jobs, but retirees, people who can't even afford outskirts of urban cities, and it's really a desert community out there. There is some demand. I have a good friend who purchased in Apple Valley a $275K house, added some square footage, spent $50K and will relist at $345K but will take $335K, yeah...very little return, 3 houses in a 5 block radius are selling and some only 5 years old.  He is actually just trying his hand at flipping and rehabbing.  When I visited his project, there was sand on the streets, like a dessert.  New , big city hall, but selling in today's market in Apple Valley may have more competition from other sellers than buyers.  

Victorville and Apple Valley may have some growth .  

Post: Buying a Property with Mold in it

Drew LeoPosted
  • Investor
  • Walnut, Ca
  • Posts 72
  • Votes 36

Currently looking at a  8+ month vacant, 2-story, condo 1200 sqft in California with major mold issues.  All 2.5 bathrooms (no windows, just broken fans)  have 40% of visible mold, meaning the 40% of the room I can see mold hence 60% I probably can't see (inside walls, floors, non visible on walls).  The garage's interior roof has a 5'x5' torn, shredded dry wall ceiling and exposed plywood with dampness where the upstair's bathroom toilet is located.  Lots of urine stains from pets which the smell caused us to depart after 2 min (I worked at a animal shelter, been in a room with 40+ dead cats but the AC was working, this condo was up there being vacant min 8 months)

My agent's rehab estimate is $40K, I'm overshooting to cover bad pipes, interior beams need to be cut out and replaced, new hvac, etc so $75K.  Ad & selling agent states strict $285K listed price (indentical comparable sold at $315K) I'm going to offer $185K cash, and tap my uncle's personal $100K loan of 2% + prime (at 4.6% currently) variable 4x a year adjusting. This personal loan would hopefully over cover remediation of the mold and complete remodel of 75% of the interior: new 2.5 baths, kitchen, flooring, walls, ceilings, doors, etc.  

My concerns are if my rehab costs of $75k is enough. Reading this thread has taught me that remediation requires sealing up EVERYTHING but in a condo that has 1 side that is shares walls with next door neighbor (where all the mold sits because the pipes are located between the units)  we could be spreading the mold to the neighbor which is a real concern since I can't control the other side of the wall we are removing, tearing, or sealing.  

If it was $100K or even $120K cost to rehab , I'd still can:

1. rent will positive cash flow within 15 months  2. spent $285-300K for a investment at market value of $315K.  

The factors of uncontrollable remediation pushes this investment in 30% more risky.  Share your serious, extreme mold stories

Post: California Senate Bill 1069 (Accessory Dwellings aka "ADU"s)

Drew LeoPosted
  • Investor
  • Walnut, Ca
  • Posts 72
  • Votes 36

Hand raised. Modular homes reviewer.

Post: California Senate Bill 1069 (Accessory Dwellings aka "ADU"s)

Drew LeoPosted
  • Investor
  • Walnut, Ca
  • Posts 72
  • Votes 36

Researching and knowing about Modular homes.  I can provide some insight.  Include me.