All Forum Posts by: David Gwilt

Hey @Ian Kirk, I'm in LA and would be happy to help.  Thanks @Justin Craver for the mention.  

We are investing out of state with partners in large value add apartment buildings.  We currently own in Fort Worth, TX and Wake Forest, NC, as well as a local property in LA and a triplex in FL.  Our long term goal is to have most of our real estate investments be passive investments so we can focus our time and energy on fun activities and traveling.  

I would definitely consider how this will impact valuation of the property going forward. While I am a big proponent of multifamily real estate, turning a SFR into a multifamily does have some downsides. Have you looked into househacking a traditional single family home by renting out rooms in the house? Doing so can provide excellent returns while also maintaining the traditional usage of the property.

 You are still in your window where you can sell the property and exclude it from federal and CA capital gains taxes as your primary residence.  Given the amount of equity you have in your home, your returns are actually much smaller than calculated as there is an opportunity cost to having all that equity sitting in the home doing nothing.  As I see it, your two best options are to refinance the property to pull out a significant portion of the equity and invest it elsewhere (but eventually pay capital gains when you sell the property), or to sell the property now and reinvest elsewhere. There are many options available that can get you 7+% return on average per year, one of them being investing passively in large apartment complexes with experienced operators.  An investment like that can typically yield 6-8% passive cash flow per year, with large returns in 5-7 years when the asset is sold (typically about 8-10% extra per year, paid at refinance or sale of the property). 

It all depends on what your long term goals are.  Investment property in CA can provide great returns, but the majority of the returns are through appreciation and not cash flow.  If you are looking more for a passive investment that provides cash flow, I would recommend looking into opportunities to invest in large apartment buildings out of state.  I'm happy to provide information on that if you are interested.

I agree with the posts on here that there are other areas to house hack in that may be more cost effective than Westchester.  We recently helped a member house hack in Hawthorne.  He purchased a $740k home and had leases lined up before even closing on the home.  He is now paying only $900/month for his mortgage after the rent from his two roommates.  His principal reduction is approx. $300/month, which gives him a positive net worth impact of $300/month before accounting for tax savings or appreciation. 

Happy to meet with investors in the South Bay area to go over options to invest, both in the South Bay and through out of state investments that provide great rates of return passively.  Feel free to send me a message if you want to chat.

Definitely look at the ADU option and also look at house hacking a SFR. Avoid RSO areas if at all possible. We helped a young military member last year house hack a 4 bed/2.5 bath property - he paid $740k for the home and is paying less than $900 per month in mortgage payments after his 2 renters pay the rest. In addition, his principal paydown is about $1200/month, so his net impact to his net worth is $300/month before factoring in tax deductions or appreciation. This one decision has paved a path to wealth for him in his young age.

Hi Tyler, look for the Out of State Multifamily Investor (OSMFI) meetups spread throughout Los Angeles.  These meetups are geared toward exactly what you are looking for, and will help provide education on how to buy out of state apartments as well as invest passively in other sponsor's deals.

As others have stated, you need to look into local occupancy laws.  In addition, you should check to see if the property is in a Rent Stabilization Ordinance area, which can restrict your options for rentals as well as the % you can increase rent each year.  My wife and I are both Realtors and real estate investors, so I'm happy to help with any other questions you have - feel free to reach out on this thread or via message.