All Forum Posts by: Osazee Edebiri

Quote from @Erick De casas:

Hey everyone! My name is Erick De Casas and like a lot of you (or all of you) i plan on investing in Real Estate in the future. Im in the California Bay Area but will most likely buy out of state to start. My goal is to do a few BRRRR's and a few short term rentals. Ive set a goal of spending 5 hours a week as of now to study different markets and analyze deals. I'm definitely looking to finding a mentor in my area. Im an electrician at the moment with 11 years of experience and I have a lot of friends in different trades, if you ever need help with anything electrical and don't mind showing me how you analyze deals id love to help! Thanks for all the value you all bring.

Erick

 Hey Erick!

Welcome to the community. Hindsight is everything, if I were to start off over, I would focus primarily on getting multiple House Hacks here in California. Then after awhile get multis and still acquire a new house hack every year or two.

The reason why is because our Cali, especially in places like the Bay appreciate extremely well. Out of State is typically better for Cash Flow in the beginning, but even over time a Cali property has the potential to pass out of state because our rents are typically higher (rental appreciation, people don't talk about this as much). 

Also think if you get your first property and it cashflows $500 a month = $6000. If you get a $500,000 Cali property that appreciates say 10% that's $50,000. The out state property will appreciate too, but typically not as much. To me its a matter of what gets you your next deal quicker.

Amongst all the other added benefits - Owner Occupied financing is the cheapest way to finance your property purchase, at as low as 3.5% down. Most investment property loans will require a minimum of 25% down. So think about how your cash outlay looks as well.

Hope this thought process helps.

As far as mentorship, I recommend you attend local meet ups, that's what I starting doing in 2017 and you can meet some people that will really inspire you to action.

Quote from @Henry T.:

Frightening.  If they're over 65, you can't have your unit back.  Must occupy for 3 years. Those poor landlords. Landlords! Get out now while you can! Ohio or bust!

https://www.tobenerlaw.com/oak... 

A landlord performing an owner-move-in or relative move-in eviction in Oakland must pay the following moving allowance for tenants who have resided in their unit for more than two years:

• $6,500 for studios and one-bedroom apartments
• $8,000.00 for two-bedroom apartments
• $9,875 for units with three or more bedrooms

 You can always have your unit back if they agree to move, that's why you want to do it as proper as possible. Don't pay cash for example you want a paper trail. So if they try to take you to court later you can show you provided a legal document that they signed and that they deposited the money.

I haven't had any issues. I did have one family that changed their mind about moving, and they gave me my half back. I couldn't force them to move because the lawyer advised that I didn't pay them enough, which I agreed and since they gave my money back I had no issue with it. 

Many of the difficulties in Oakland are mostly solved with Human conversations. The more report you build with tenants typically they will agree to most things. 

Powell, it is likely at some point Oakland will allow you to do the Owner Occupied move in again. So hopefully you are able to solve it without having to wait but if you do have to wait, if the tenant is over 65 you will probably have to pay a bit more because that's a protected class, but it should be worth it, if that suits your overall needs and goals.

Let us know how it goes.

Quote from @Michael J.:

Cash for keys is definitely a good strategy when trying to get Tenants to leave.  I'd have a conversation with them first and see what their expectations are before you offer anything.   Let them do the talking and see what they say.  You might save some money this way.

Michael is right but since it is Oakland this can be trickier.

I have done a few in the past. 

Yes found if they are interested and what they know. Oakland has minimums that you are supposed to pay tenants to move. Plus all the rules can be found on the Oakland Rent Board website. 

Then you  should talk to an eviction lawyer. I used local The law Offices of Alan J. Horowitz.

You will draft up a contract pay them half up front and half when they leave.

Tenants don’t have to take it, unless you were able to do something like the owner occupied move in, but as you stated moratorium is still in affect.

Quote from @Michael J.:

Cash for keys is definitely a good strategy when trying to get Tenants to leave.  I'd have a conversation with them first and see what their expectations are before you offer anything.   Let them do the talking and see what they say.  You might save some money this way.

Quote from @Teddy Smith:

@Brian Garlington appreciate the input. Do you happen to have a contractor you'd recommend who could do this?

Hey Teddy,

I like your idea on getting more income out of your property. 

Question why a temporary wall, are you planning to convert it back in the future?

Construction cost difference wouldn’t be too much difference and insulation in the walls would provide some noise damping to address some of the concern Brian brought up.

As far as permits that would be an additional cost and time factor so you have to decide risk versus rewards. Tenants usually only complain about problems that aren’t addressed so if you find good tenants that communicate issues especially if address potential issues to begin with.

Hey@Krissi Miramontes,

You got some good responses in here, so what I would add is, some of these will be math and some of this will be what's easier for you to operate at least in the short-term (A home based business or OOS business). On the David Greene Team he always tells us to invest in California first, unless you don't have the funds for California, then go out of state. 

Based on the info you provided it seems you have the funds to build an ADU and JADU, which seemly means you can currently afford to invest in California. While you will typically get more cash flow OOS, a property in California will on average gain more appreciation and rent appreciation over time (hence our higher rents over time should give you better cash flow than out of state).

So when it comes to making a decision what gets you to your goal of becoming a "large investor" faster. Cash Flow now with OOS or appreciation in your current property that you can pull out to put towards acquiring more property. 

When you run the math, you need to take into account what is the ARV of your home when you add two units to it? You put that you are located in Sacramento. So if you if your home is an area like the Fab 40's or near Kaiser or Sutter for traveling nurses that will vote well.

Since Sac adopted to allowed two ADU's to be built on one lot that also votes well, I believe ADU's will be more and more popular as more consumers seek to gain rental income from their primary home or multi-generational living.

Quote from @Calvin Kwan:

Hi, 

Just wondering who everyone is using for their landlord insurance policies.  I got a great rate with Hippo a few years back, but unfortunately, they're no longer issuing landlord policies.  I just got a quote from YoungAlfred.com and they quoted me $175/month for a triplex w/ 500K liability.  My property is a built in 1895, so it's been more difficult to find insurers.  

Thoughts?  
 

Hey Calvin,
 
I am using a Broker.

I used to use one insurance company Safeco for everything under an umbrella to get discounts. They wouldn’t do one of my Oakland properties, so my broker found https://www.foremost.com/

which Covered the property and still gave me the umbrella discount even though I have different insurance companies I am using.

I recommend looking into that kind of situation.

Quote from @Jacob Diaz:

Hello all,

I recently acquired a duplex in South Oakland that was being used by the previous owner as a student rental. I'm looking for a company that can manage it as a student rental and got in contact with Mace Property Management per the advice of my realtor and other threads I've seen on this forum.

However, Mace declined, saying that they're trying to steer away from student rentals. And they said they didn't know of other companies specializing in that either. I'm wondering if anyone has a management company they could recommend for student rentals in Pittsburgh, especially for South Oakland.

Thanks in advance!

I have dealt with many quite a few PM companies in regards to Oakland. 

My guess is they are avoiding student rentals because the moratorium on evictions and rents is still in place. That segment may have been getting away with not paying rent more than other segments of the rental population.

Given that since margins are low on what PM companies make and they have all had plus and minuses.

I like the idea of getting local companies that have been in the area for awhile because they at least know and are fighting the issues on a regular basis.

The tech based PM companies that manage remotely won’t know the market as well. 

Next, assuming your income doesn't change much then you really could go anywhere. So I would research a few cities that are not expensive markets like the Bay Area (Which means mainly avoid cities that are booming because of tech). Pick out those cities based on a few criteria of your interests. Then go visit them, to make sure you like and are compatible with the cities. If your income is remote and if moving is relative easy for you, you could even try living in those few cities a month at a time and determine which is best so you get a legitament feel.

However, seeing as you do love Cali. David Greene always tells us that purchasing a property in Cali should be the first objective (ideally a househack), only go out of state if you exhausted being able to purchase a house in California first. 

Quote from @Joshua Janus:

Quote from @Teddy Smith:

Hi All

I'm writing because I bought a property in Oakland last year with an FHA loan that includes 2 building on one parcel / title: one is a single family 2 bedroom, 1 bath with a huge unfinished garage (essentially 3 cars deep), and one is a triplex, and the 2 buildings are connected by a small back yard.

The triplex is currently fully rented out at $4,250 per month in rents (essentially market rates)

And I'm currently living in the single family.

I write both to seek advice / opinions on what to do with the property, as well as potentially get a reference for a real estate attorney to help.

My goal is to get them cash flowing as much as possible, as well as increase my equity.

My plan would be to get a lawyer to help subdivide the buildings into 2 titles, and then get a conventional loan for the triplex and a fannie mae homestyle loan for the single family, and use it to get additional funds needed to convert the unfinished garage into a 1 bedroom unit and then rent that out, and move out of the top unit and rent it out.

The thinking behind the sub-division being that the 2 buildings separate are worth more than the 2 on one title.

And the thinking behind the fannie mae homestyle loan for the other unit being that I want one more door and I want to use someone else's money to build that additional unit.

Thoughts?

Advice?

 I would get the highest rents out of both properties as possible then put them on the market. In this climate, you can get a pretty penny on properties that bring in income. 

Selling should be lucrative even if he has only had a year, but this is primary home. So if sold he would need to get a property that he can move into and that produces more cashflow than this one currently does.