All Forum Posts by: Account Closed

If your investment property is doing well, this shouldn't be an issue. Lenders will typically count your rental income as part of the D/I/. The portfolio lender I have been working with counts 75% of my current rental income as regular income. 75% because the assumption is that it can't possibly be occupied 100% of the time, and there's maintenance and repairs etc.. 

So as long as your investment property is bringing in in at least 25% (ish) more than the mortgage + taxes, it should have no impact on your D/I and you should have no problem getting approved for another loan 

Moving? Well, although I maintain a home in LA, pay California taxes and all that, I actually work in China. Kinda blocked me from managing an owner/occupy purchase. Very annoying. 

Actually, I would love to invest in some other market but as I am essentially doing this remotely, I don't really see how I could do this without the help of my family members on the ground. 

I just took a look at apartments.com. It looks like it just helps you find a place to rent. I don't see where it shows homes for sale at all. What would be super useful would be if, on Trulia or whatver, I could search "90033" and add the filter "< $350/square foot". Boyle Heights (90033) tends to be around $300-400/sq ft. If you see a duplex or triplex at $275, it is almost always either really spacious or kinda run down. If you see something at $400, it's probably "done". It's been fully remodeled and there's not much room for improvement. In Silverlake over at 90039, the range is more like $650-$850. I don't have as much of a feel for lot sizes, but it seems like understanding what size lot typically corresponds to what number of bedrooms would let you know pretty quickly if there was room for an addition. 

So instead of searching for X bedrooms in X zip code within X price range, I sort of wish I could eliminate the price variable and just search for "xxx price per square foot" in zip code yyy.

p.s.

fwiw, I am technically "in". I bought a triplex in April. No cash flow but it's breaking even. I'm basically banking on any of the 3 units to move at some point and then I'll be solidly in the red. Appreciation is nice but the main obstacle seems to be rent control. Which brings me to another thing I seriously wish I could filter by...."delivered vacant". *sigh*

Pretty new at this but as I go through listings in Los Angeles, I've started to really pay attention to the price per square foot (and the lot size too). Sadly, none of the mainstream platforms (Redfin, Zillo, etc) seem to offer this as a search filter. Anyone got any tips on how to search for properties based on these two aspects? I totally ignored them at first, but more and more they are showing themselves to be a surprisingly (to me anyways) good indicator of how much room for improvement a property has.

@George Pauley Well, what if your negative cash flow is because of rent control? Then when for renter moves out it's your lucky day!

I'm so new to this you should probably ignore anything I have to say but as I tried to figure out this question with my brother, what I came up with was basically, buy and hold if it's a place I really love and sort of wish I could live there. If it's just a numbers thing, where I can see the cash but am not really interested in owning the property, then look at it as a flip.

Of course, those are still champagne problems. Over the past few months, we are still figuring out our tastes. Love Boyle Heights, Lincoln Heights, Silverlake...hate stucco. Love craftsman homes. 

And so far, a lot of it is just coming down to what we can actually get a bid accepted on. It's not like buying a shirt of the rack. Just because you want to buy it, doesn't mean they will sell it to you...even when it's for sale. Not sure what the rest of CA is like but LA is crazy.

Well I figure even if it crashe...er..corrects...as long as you property has cash flow, it shouldn't matter right? It's only an issue if you somehow got caught in the middle of a rehab or something or if your plan for the next year was absolutely counting on being able to re-fi. Otherwise, I don't see what the big deal is. Aren't you supposed to be able to make money in both up or down markets? Just different strategies no?Or have I been listening to the wrong podcasts by mistake.. ;)

@Caleb Heimsoth I never saw the movie but I did get the book..Well I listened to it on Audible. Maybe they didn't make it clear inn the movie, but in the book it's pretty clear that the preconditions didn't really change. Lender's are more cautious (for now) but credit default swaps are still with us, there's been no real change I've at Moody's, Dodd-Frank wasn't quite repealed, but it was seriously weakened last year, and Trump has been busy with deregulation. So I wouldn't be so quick to write it off as a once in lifetime event. You must be too young to remember the savings and loan crises of the 80's. This stuff just keeps rolling around.

@Manalo D.

Oh no, I have a salary too. I just mean that it's the 1099's that are preventing me from filing. Otherwise I would have filed for 2017 already. It's a big deal because I made significantly more at my day job in 2017 compared to the  2016. So my actual debt/income is quite a bit better than what my lender is using, but without that 2017 return, I can't prove it to their satisfaction.

@Steve Vaughan

I'll have to search for the thread then. I'm a little confused. Current rent is only about half a percent, but market rent for that is about double what it's getting. And I wouldn't worry too much about a partner from "out of country". But I will definitely find that thread when I get a chance later today.

I am back in LA now and then, maintain a legal presence there. I still have my CA DL, my checking and other stuff is all in LA and I have no legal permanent residence in China. If this 3 unit deal goes through I'll be flying back to close it. I grew up in LA and all my family is still there. I created an LLC with my brother and sister (both in LA) as partners. The whole point, for me anyways, is to see if I can create a job that will let me move back to LA full time. I went to middle school in Glendale, high school in Torrance for college only went as far as San Francisco. LA is my home.

edit:

I just realized you thought I was referring to the 3 unit as "tantalizing". Nah, I mean the larger 10 bedroom that is out of my reach. The 3 unit is more like, meets the 1%, we can make it work, should appreciate nicely, jeez man we've been looking for 3 months let's get something done already...

*sigh*...might have to pass on the second one I guess.

fwiw, I left some of those numbers out of the post but I did run them. We could do either one individually no problem. It's just starting too look like the second one, which is actually the better deal IMO, will have to go to someone else. We're putting such a big down payment on the first that I think it won't leave enough of a cushion for  the second.

The saddest part, for me anyways, is if it was just another month later we probably could. I'm doing at lot better at my day job this year compared to last year and once I get my 1099's in and file taxes for 2017, my debt/earning will be good enough we could swing a significantly lower down on the first and/or get portfolio lending on the second.

So tantalizing... :/

Maybe next year I guess

First of all, thanks a ton for teh feedback.

...I was thinking 6 months. Hadn't tried to run the numbers for a full year. 

I'll go back an take a look. Probably need a family meeting too. I'm pretty sure we could cover it for a year but it would probably be pretty stressful. My brother has a potential partner too. A friend, and roommate, who did the foundation work on his current home. I know he wants to do an actual deal with us, so there's some more money there. And I have personal money that I did not include as this deal is mainly done with family money. 

Well, a year with no rental income would be pretty terrible. But the listing says it's getting $1500 on the rear unit already. It say "actual rent“ for the front unit is $3500, but then says it's vacant so I guess that's just a lazy listing on Redfin (the number of bathrooms also don't add up). But my brother, in a slightly cheaper neighborhood, is renting out his upstairs 1 bedroom for $1,500, so I figure the listing estimate of $5,000 in rent is actually pretty cheap for the size. If we got half of that, then yes. I could cover it for a year. And the inside looks pretty nice afaik. Not "gorgeous" but totally rentable as is. It's mainly the exterior that needs work (perfect right?).

So instead of 6 months I should imaging not being able to refinance for a whole year.

What is a good "terrible" scenario I should imagine as far as renting it?