All Forum Posts by: Peter Eberhardt

@Taylor L. thank you for your opinion! I can see where you are coming from. Is it right for me to assume that the skills to syndicate and operate a business plan for the asset is the same as it would be for say, a SFH? Because I have specific skills that I know I excel in that I discovered during my 4plex journey, I am very good with excel, I am really good with getting tasks done and finding the people, making the calls needed to get something done that I can't do.

As an example I would be a little hesitate to say "I can help underwrite" because I am still learning how to calculate IRR and EM correctly as those figures you do not deal with in the 1-4 unit space, even though I know I am good at underwriting and factoring in your safety nets in all parts of the deal.

Maybe approach it by saying "I can help with ______" and add what I do and don't know of that topic but can learn quickly? What are your thoughts on that? 

Hey BP community, 

After reflecting on the process of my last 4plex purchase and rehab, I am really eager to do more.  I want to learn more and work towards syndicating my first apartment building deal.  

I’ve been learning a lot with books and podcasts on the subject but, I learn the most by doing hands on.

Would it be best to find and join a mentor group? I have no problem in doing that, and will easily find a good one and join if this is the next best step. 

Or would it be best to find a GP that I can help, bring value to, and continue my growth that way? If you are a GP, how would you view someone like myself with my limited investing experience in the small multi family space and how could I bring any value to you?

Or maybe a combination of both? 

I have all the time, high drive, and dedication, and want to channel it so I can syndicate my first deal in 2023. I appreciate your input! 

These threads about “to invest or not invest in SoCal” are going to have two types of responses: those from investors that invest in CA and those that do not. I disagree with pretty much everything above, and yes I invest in CA, and hope to have everything in CA. Why? Because I live here, self managing for me is a big plus. I hear CA is more tenant friendly. Cool, if you do your job as a responsible landlord (follow the tenant laws), choose your tenants responsibly, and not be a slum lord, there is no more risk then there is anywhere else. Yeah it’s expensive “on paper”. But guess what, you can also make more money. I cash flow $3k on my 4plex after doing slight renovations. I would have to buy like 15 doors in the Midwest to get those same numbers and I wouldn’t get the appreciation. 

Don’t get me started on the tremendous opportunity for developers and the more creative minded investors that CA gives us with all these new laws on zoning and ADUs..

That’s my answer, I’m from CA and I invest in CA. If it was so bad then nobody would he doing it?  

I think a lot of the criticism in this thread comes from the OP use of the term "BRRR" and "exit strategy". If you were looking for feedback on your purchase based on those goals, no it was not a good buy.

However, what I see is you literally bought a residence, in San Diego, with the potential to live for free, for $0.  Period. That in and of itself is a big win in my book. Even if you are negative $300 a month, good luck finding a place to live in San Diego for triple that. You are already ahead by not throwing your money away in rent every month.  Then, the benefits of other people paying down your equity kick in that yes, it will take years to tap into, but again, $0 down so you’re not out anything with a whole lot to gain. Hello! 

No you’re not going to be able to sell this for a profit, no you’re not going to be able to leverage it for many years, no you will not cash flow for many years. Yes, you gained some valuable property that did not set you back at all financially, and you will start to see the power of appreciation and house hacking. Big win in my book on those topics! 

Nice work!! What was your timeframe? 

@Tyler Richmond my first mentor once told me "if you can afford it, never sell". Without knowing your actual numbers and situation, and what you value as a person and as a family, I can't give the best advice. From what you wrote, and what I read, I would exhaust every option to try and keep your San Diego home. Your DtI would be thrown out of wack even with a IO HELOC?

My opinion would be to leverage your home to buy another home. Keep it as a rental, even if you break even (cash flow covers all expenses including new note payments or property management) you are still going to benefit from appreciation that you can leverage later on.  Your end goal is to buy a house whereever you end up moving too. Weather you use your SD home to buy that house or not, the end goal is the same of you bought another house. It is just that one route you end up with two houses, the other route you end up with one. 

Shoot, I would almost offer to manage the property for you for cheaper then a PM company would, just so you can make it work. From the face value of you post and not knowing more, I would hate to see you short yourself in the future from selling arguably the most valuable real estate in CA. 

Yes, it wouldn't be in your best interest to keep people around that drain you. It would be in your best interest to be aware of your thoughts, feelings, and mindset as you shift away from these people. 

I don't recommend "cutting people off" like cold turkey. I recommend follow what feels good to you and what you naturally away towards. If it doesn't feel good to be blown off or making jokes that you are sensitive too, then naturally your desire to continue to talk with them as frequently will decrease. Check in with yourself when you want to reach out to someone and ask yourself "why exactly do I want to reach out to this person". 

 Over time, life will phase out the wrong people for you and phase in the right people. 

I excerpted two parts of your post here. 

Yes, it would be crappy to start cutting ties with your friends because they don't share one common interest with you. It would not be crappy to start cutting ties with your friends that generally do not support or care about you as an individual, or hold you back from life in general. Be very careful to not put yourself on a pedestal and think that you have an upper edge on your friends or on life because you have the drive and a goal to get there. Be very careful to see the difference between "judgement" and "different". It can be easy to start to feel that you are better then others because you have the drive, you have the goal, you are going to make it. That doesn't make you better. It makes you different.  It is possible to surround yourself with like-minded people who can feed that part of you in RE that is driven, but you also need your friends that are your friends to enjoy life with and check the boxes of friends - fun, supportive, caring, etc. 

I struggled with the same thing for a long time. I packed everything I had into my Honda and moved myself 700 miles away to San Diego at 18. Some of my friends do not really care to better themselves or their situation. I come from a place of understanding this and unconditionally accepting it. Just because you accept it, does not mean that you have to agree with it. For me the hardest part is seeing these people I care about, sitting on money or sitting on opportunity that they could help themselves with live a better life but because of 'x' 'y' or 'z' they do not. But they check the boxes in everything else and we are friends. Then, I also have my circle of like minded individuals that I have met along the way on my investing journey, and those people share the same mindset and lift me up in this category.  

Feel free to reach out anytime to talk, and congratulations on taking the step for yourself. That takes courage and it takes heart! It will all make sense for you one day.  

As everyone has said, you will be hard pressed to find a deal deep enough to BRRR on market, especially if you are using HM. However, you do have the upper advantage locally as a agent to quickly access owner records of distressed looking places. I uber for hours on end in San Diego and am always sending addresses to my wholesaler just incase something falls into place.