All Forum Posts by: Nick Hedberg

@Tim Grich - Welcome to BP! Even if you don't charge your tenants, submetering is a great idea. A client just had a $10,000 water bill in her 13 unit complex because a flap was leaking on a vacant unit. Good companies will have alerts for high water usage. I would have a heart attack if I had a $10k water bill! I promise no one factors that into their numbers....

Look at comparable units available for rent and see if they are charging for water. If your unit is in demand, you should be able to get the tenants to cover this cost. It will really add up in the long run. If they aren't paying for water, they will use more.

@Anne Sweens - I would approach the tenant and have a discussion with them. Negotiate reduced rent and have a frank conversation with them. If you are owner occupying, you do have the right to relocate a tenant. This area is more gray since it is not legal living space. You could also call the AOA legal hotline. They should be able to help.

Hi @Ramon Vazquez,

Thanks for asking. I ended up at Keller Williams Silicon Beach. They have fantastic training and tons of investors/developers. Some work out of the office and it's a great place to network.

@Jacob Repreza - Is correct. Most require hard money or cash. With hard money you can't legally owner occupy the property. Also many require you to waive all contingencies after a showing so doing inspections might be tough.

I would still reach out and look at the properties. Just be aware of what many require. 

@Sammie Xiao - Hi Sammie, the costs can vary tremendously, just like any kind of new construction. Below are 3 sites that can provide additional information.

Proto homes: https://www.protohomes.com/ - Popular on the Westside. 

https://connect-homes.com/

https://www.honomobo.com/us/home

 

Like several have mentioned, every HPOZ is different. Some are relatively relaxed while others enjoy the power trip. I think it would be challenging for them to block the ADU, but they can certainly make the design aspect difficult. Make sure the numbers looks great, or I would look outside the HPOZ. The headache might not be worth it.

@Albert Gutierrez - Luxury sales have been hit the hardest. In April we had a 60% drop in pending sales, vs 80% for the $3M+ price point. For the last several years Los Angeles has been struggling with low inventory, we started off this year with even lower inventory. Due to Covid, many sellers have taken their homes off the market, further restricting buyers options.

I've been in 2 bidding wars this month and am about to write an offer on a multiple offer scenario. Attractive and well priced homes are selling fast. Opportunities are increasing for investors that are willing to write offers and have cash.

I think unemployment will be an indicator of how the real estate market does in the next several years. If we have high unemployment that will dampen buyer demand. 40% of the job losses have been in the restaurant & service sector which has it can be difficult to make enough money to purchase a home in LA.

Until Supply and Demand tips for a long period of time, I would start expecting wide spread price declines.

I used CA Realty Training (https://www.carealtytraining.com/) and absolutely loved the program. They kept the classes entertaining and did a great job answering my questions. They currently have online courses. I did Finance but don't have any comments on the electives.

In terms of price, they probably aren't the cheapest but the couple hundreds bucks you spends pales in comparison in terms of the amount of money you can make in real estate. I would prioritize quality over cost.

When I took my test and I breezed through and passed it easily (they don't give you a score). Standing in line there were people that took a crash course and had taken the test multiple times. Do it right the first time.

@Madhav Thaker - Great questions and I think it really depends on the property. Doing it yourself would be much, much cheaper but it takes a lot of time and it's easy to get of your head. If the property needs a large amount of work, there might be economies of scale in having one contractor do most of the work. If you are willing to put in the effort, you can have multiple contractors put in bids on different parts of the job to see who will be a good value. I wouldn't necessarily go for the cheapest contractor either. You get what you pay for. 

In terms of the market bottom, no one knows when we will hit the bottom or if the market will even go down. I know several properties that had to take price haircuts due to COVID. I've also been in several bidding wars in the last 2 weeks. I would focus on a property that works for you, not trying to time the market. Buying a great property is tough enough, trying to time it with a market bottom is even more difficult. If you wait until the market has bottomed, you won't know until it's already passed.

I'll PM you some more info about the areas and properties you are looking for.

@Madhav Thaker - Great question. I think the overall BRRR strategy is a great one, and it depends on your comfort level with fixing a property. I would avoid medium - heavy fixers unless you have extra cash and people that you know and can trust. I think a light fixer or a property that is in livable condition is your best bet. This would allow you to tackle a single project at a time and make the whole process less overwhelming.

I did a live in flip in 2009 when you could receive the tax credit for purchasing a home. The property was livable, but filthy and needed updating. Overall I got it done but it was tough and stress since I did all of the work myself. If you have the budget to hire great contractors it can make the whole process less stressful.

Buying in LA is based on your budget and where you spend your time. Where do you currently live, work and spend most of your time?