All Forum Posts by: Osazee Edebiri

Get out now the market is turning. Reduce asking and break even.better than losing more if you wait.

@Taylor L.

Thanks for the reply. I don't believe the HOA has rental restrictions but I will double check. About 30% of the units are rentals. The Bay Area has been in a seller's market since 2018 (when I moved here) with the market peaking in 2019 for condos. I had to bid over another buyer for that unit. Homes would get multiple offers with sometimes the first day they hit the market with buyers waiving inspections and appraisals. It's not uncommon for all cash offers. A 3 bedroom 2 bath single family home is around $800,000. So condos were in the $750,000 (for a 3 bedroom) and under range.Condos were getting offers within 2 weeks if it was in a highly desired area or renovated condition up until late March/early April 2022. It slowed down considerably when the interest rates increased and condos seem the hardest hit, although home prices are still high even with the price reductions. Many condos are on market for 30 days or longer now. People who have lived in their homes for a long time, prior to 2008-2010 saw their homes appreciate a lot so they do well financially when selling or renting it out at market rate.

My goal is not to keep losing money every month. $2300 is a large amount of money to be out each month and now I'm making double mortgage payments (my current home and this condo) in addition to my rental property in the Midwest (which is cash flowing so renters are paying my mortgage payment) and a HELOC payment (HELOC used for a renovation on a California rental). If I leave the condo vacant the city of Oakland has a $3000 vacancy tax a year. I need sales proceeds in the short term and could probably do 6 months more of monthly payments but that will sting financially.

 @Becca F. seems like you really are not going to take as much away from these programs since you are already in the REI game. I agree with @Osazee Edebiri if I am catching his point correctly, that you need to worry less about the next best step and just focus on taking it one step at a time. Anything you have questions about that you have listed above can be found on BP using the search feature. I once closed a deal that "Ace" could not close because it was in my target area (knowledge) and I listened to what the sellers wanted. I didn't lowball them in a wholesalers shotgun approach and scored a great deal. Doesn't make these "gurus" bad necessarily but I would just take it with a grain of salt as they say. I also talked to him once on the phone and he seemed to want to boast more about his REI ego than about a deal and listening. Seems like a red flag to me.

Hi Osazee,

Ace's course program is $495 and he offers products a carte such as a spreadsheet to analyze potential rentals for $40. Sam's program is $6000 and has lifetime access to his video courses. That's very pricey and I could use $6000 towards a downpayment on a property. Both of them have a lot of free videos on Instagram and Sam has many videos on YouTube. I'm still getting used to all the terminology: CAP rate, cash on cash return, DSCR (debt service coverage ratio) and how to analyze properties.

I pulled out money from a cash flowing rental (did a cash out refinance) to help me pay for a major renovation for a single family home. I also did a HELOC against this property owned free and clear. I didn't want to finance it but if I didn't my savings account would have taken a bit hit - the renovation cost a lot more than the original estimate since all the electrical wiring was old. I will have one tenant in soon and will need to get some roommates for my tenant in order to start cash flowing paying off the HELOC. I'm looking to possibly do future purchases in Indiana since I already have a property manage there. I've also heard Ohio, Kentucky and Tennessee are also good markets. With California I'm thinking Central Valley past Tracy into Modesto or Fresno (I don't know anything about those areas and if they are good rental markets, just brainstorming).

I'm seeing a lot of investors say they use Other People's Money, which is usually private lenders or hard money loans. The private lenders gives them a loan, do the rehab, rent it out then refinance at the appraised value of the home (mortgage would be about 75% to 85% of appraised value). This seems to work well with lower priced properties like in the Midwest or the South in the below $200,000 range so pretty much nothing in the Bay Area. I was messaging a realtor and he had a motivated seller in the East Bay (San Pablo) but the house was $649,000 - I saw the pictures but didn't see the house in person but it look like a house with a lot of potential. That would be a lot of money to finance. I'm also concerned with being over leveraged. If I have too many loans, won't a bank say no? How are investors financing 20 properties? If the tenants don't pay the rent or major repair costs come up, isn't that risky? 

Thanks for your help.