All Forum Posts by: Nick Hedberg

Hello,

Does anyone have a MTR/STR PM recommendation? Property is a 5 unit in Memphis, TN near several hospitals.

Hi @Joshua Jackson,

Would you be renting out the property or living in it?

If you are living in it and not renting out rooms, there would be no cashflow. You would be paying the seller's mortgage.  If you are renting out the condo, it would be a challenge to get a condo to cashflow in Santa Monica and would probably require a large down payment to match the terms required for subject to or you would need to get a 2nd loan / have the seller finance a 2nd loan. 

For example; if you agree to a $600,000 purchase price, the seller has a $400,000 remaining balance on their loan, you would either need to bring $200,000 to close or get a 2nd loan for $200,000. Ignoring closing costs and realtor fees.

In general with real estate, you can only tap the appreciation of a property when you either sell, refinance or do a HELOC. Appreciation is a long term benefit and can be pricey to tap on a regular basis.

@Pouya Banki - If you aren't having luck with crane companies you could call an AC company. Mine hired a crane twice to put an AC unit on the top of my house. My 4 ton AC unit is around 300 lbs and a hot tub is around 500 lbs. Hopefully not too big of a difference. 

@Omid Sadeghpour - What type of units are they? Different types of properties could be under different rules. IE if they are single family or built after October 1st, 1978 they might not be RSO units. However CA tenant protections from AB 1482 might still apply.

Does anyone know if the rent freezes apply to SFRs? I have not seen anything stating that they do.

Here is the order stating the rent freeze applies to RSO units: https://www.lamayor.org/sites/...

Hi @Rachel Schroeder - Do you have a neighborhood or more specific area that you are thinking? Los Angeles is a large place and an agent that does business in the neighborhoods you are considering would be the best fit.

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $765,000
Cash invested: $250,000
Sale price: $1,300,000

House hack I am currently working on. We rehabbed the property and are currently (2022) adding an addition and ADU.

What made you interested in investing in this type of deal?

5% down payment and high ROI. Plus once the ADU is complete we will have rental income off setting our mortgage and a place for family/friends to stay.

How did you find this deal and how did you negotiate it?

Property was on the MLS. We were able to beat several investors with higher cash offers through persistence and staying on top of the agent.

How did you finance this deal?

Bank financing.

How did you add value to the deal?

Rehab, addition and ADU.

What was the outcome?

We expect to clear $200k+ when we sell or do a cashout + HELOC.

Lessons learned? Challenges?

Don't get cheap hardwood floors and stay on top of your contractor. We went by the property every week and always found things that needed to be communicated.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Myself. :-D

@Jose Valdez - I 2nd Robert Hall. They are great and I specifically use Tony Watson. Very knowledgeable. 

Hi @Jack Day, I'm planning on doing a BRRR with my contractor this year. Let's grab a cup of coffee. I'll send you a PM. My office is in the Marina.

AirDNA is your best bet. I would try it as a 30 day rental if their is a decent premium and you have the time. That's what I'm planning on doing with my ADU. Plus is easier for friends and family to visit.

@Mel Hayes As others have said, it really depends on the area. Where is the property? Adding an ADU is a great way to add square footage, but you might run into appraisal issues and it adds complications. I'm adding an ADU to my personal residence this year and there are comps to support the appraisal. With many of the buyers I have worked with, having a guest unit has been a huge plus.

I would talk to talk to the city and see what you need to do to include it as living space. I think you have a good idea to turn it into a rec room or living space. The key is make sure it add square footage on title.