All Forum Posts by: Phil Gearhart

insurance companies are cash cows and make a lot of money, just ask warren buffett.  we may not know what the odds of what your loss might be, but they do.  they will charge premiums that make them lots of money over the long term.  

most long term financial advisers will tell you, over the long term, to not insure things you can afford to lose.  of course we insure our houses, cars, lives etc, but the extra coverage that they try to sell you on your tv is (from a financial view) a bad investment.  the odds are against you.  

everyone's idea of what they can afford to lose is different.  if the loss of 12 months income would cause someone to lose their property to the bank,  that is a serious risk that should be hedged.  your case seems to be at the other end of the spectrum.  if the coverage helps you sleep at night, that is a plus that can't be quantified, otherwise, it's not a good investment.

jon,

it will be a lot of driving, but worth it and maybe necessary for you to get into your first property. i bought my first two properties there (commercial.) palmdale is better than lancaster. northrop grummond was just awarded a $60B stealth bomber contract, so i would look at SFR's that would appeal to middle income tenants that will be coming to the area. 6000+ new jobs will be a nice boost to the area, especially to SFR rentals. plus, who knows, someday they may actually build the train.

phil

@Account Closed i kind of agree with manolo d, you appear to be giving advice to a poster from oregon.  calling someone an @ss on BP...never appropriate.  also, using all caps is the online equivalent of yelling...also never appropriate.

@Gagandeep Singh

welcome!  don't know if you have a PM, but you probably know by now how the commute works for you.  owning rental property is a pain and adding commuting time managing it yourself only adds to that.  you have to balance that with the loss of income from having a PM.  it's tough to afford giving up that money early in this business.

  continuing to buy in BF allows you economies of scale in managing them.  also, leveraging BF properties to buy BF properties gives you much more opportunity to add to your portfolio.  leveraging your BF property to buy in LA doesn't get you far.

spending a few years buying in BF gets you a lot of experience as well as equity.  selling several BF properties gets you money to work with in LA. holding your BF property and saving towards a LA property will probably take longer.

my first two properties were 85 mins away and were a lot of work, but it's worked out for me.

good luck!

phil

@David Tipton

hi david,

here's a couple links to city info.

http://planning.lacity.org/PolicyInitiatives/Housi...

http://urbandesignla.com/resources/SmallLotDesignG...

@Joseph M

I have heard about the small lot developments that are being built..and since there is a lot of old housing stock in the area , and a big demand for newer housing in areas like Echo Park it does seem there is an opportunity there...but I think those types of projects are probably pretty complex versus just rehabbing a single family home since it would be new construction.

i'm doing a small lot project down by USC.  it's 18-24 months easy for the project as building & safety are backed up and scrambling after the fire downtown next to their building.  

the small lot concept can be pretty good as it allows you to divide the one property into separately sellable  properties.

p

thanks linval and james for the welcome!

juan carlos, sounds good, i'll be definitely getting in touch with you at the beginning of the year.

phil

hi,

love the website and the quality of the post!

i have some buy and hold properties.  on one of these properties i have partnered with a developer to build some student housing down by USC.  the construction loan is 3 to 4 months away, at which time i will be bought out of my property by the partnership we are forming.  i'll be looking for some 1031 properties at that time to put some of the gains.

having always liked the reno process as the owner/builder, i'd like to get into flipping in the western inland empire (i live in culver city.)  i chose the IE because i want to start with $250K-$350K homes. right now i'm researching the various avenues to focus on for finding deals that fit me personally (can't see myself knocking on doors.)

any help with meetings or groups in the westside and IE area  that might fit my situation would be great (i've used meetup already.)

also,  i've only done roof repairs before, so i'm looking for some good roofing contractors for bids to do a torch down.

thanks,

phil

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great post chris!  lots of quality responses!

 you will still pay individual income tax on any money that the corp distributes to you.  many advantages to a corp structure, but avoiding personal income tax is not one of them.