All Forum Posts by: Justin McWilliams

Hello, long-time lurker here- I am an LA-based investor with several long-term rentals in Tempe; those have done fine, but I am now interested in the vacation rental market in Coachella valley. Specifically Desert Hot Springs, as it seems that you can get a nice 3BR/2BA with a pool for under $250k, and based on AirBnB searches, there is a fairly strong vacation rental demand in this area. I'm aware of some crime problems there but overall it seems that the area is improving. The lack of restaurants and nightlife are a bit concerning, but it seems many come here to relax and enjoy the spas, not to go out and party.

We would obviously have to hire a regular housekeeper, handyman, and pool guy. Aside from these considerations, would managing a vacation rental from 120 miles down the road be exceedingly difficult?

Any other thoughts or advice on vacation rentals in this particular area? I searched the forums but not much discussion on this city...

Thanks!!

Decided to go with the place in Little Osaka. No more HOAs! Thanks for your input!

Thanks for the input Matt! 

We don't mind doing a lot of work to make a place nice. However, we do have to worry about carrying costs (close to $20k for 3 months) plus the opportunity cost of not being able to rent the place I am in now for those 3 months (another $10k). So the total "cost" of the rehab is probably $130k. It is 11 units in the complex. HOA president seems nice and reasonable, but who knows...

We like both neighborhoods but that Montana area just feels a bit nicer...

Hi BP, I'm hoping to get the input of the forum on which would be the best investment. I have had offers accepted on both and have one week to decide. My plan is to live in one of these properties for now but eventually to sell or rent (whichever makes the most sense based on the market). Which do you think makes the better investment?

Option 1: 3BR/2.5BA townhome in Santa Monica, about 1400 sq ft, just S of Montana and about 2 miles inland from the beach. The place was built in the 70s and never had anything done to it. It is a full gut job. There is carpet in the bathrooms, a tiny kitchen that needs to be completely opened up, master bath needs to be completely re-done, probably $100k of work needed (which we will do prior to moving in). it's a middle unit so not super light and bright, but it has a 2-car attached garage and a private entrance. Schools are rated a 10 and it is walking distance to Montana restaurants and shops. Price is $955k and HOA is about $400/month.

Option 2: 3BR/3.5BA detached home in West LA/Sawtelle between Santa Monica and Olympic, 1950 sq ft. Built 10 years ago and no expense spared, it's a beautiful place with lots of amazing design features. It is one of two homes on an R2 lot so no real yard, but it has a beautiful spacious roof deck. Expansive master suite with lots of light and breezes. High-end everywhere. It is walkable to the Sawtelle Japantown neighborhood. Schools though are about a 4 (LAUSD) and it is by far the nicest house on the block, though that is changing as developers swoop in and tear down. Price is $1.35mil and no HOA.

Appreciate any input- really torn on what to do here. Thanks!

Justin

Wow. Thanks so much for the replies. What a great community!

I will definitely go with a property manager now that I've read those experiences. For those of you in Tempe, do you have one you recommend?

Will definitely ask the inspector to have a good luck at the plumbing. The house is from the early 1960s so there is certainly reason for concern.

Any other advice/comments welcomed!

Justin

Hi all! Enjoying the forum and learning a lot as I'm just starting out.

Two friends and I formed an LLC to buy and rent single family homes near college campuses. We live in LA but the price-to-rent ratios suck pretty horribly here so we started a quest to find an area with decent price-to-rent ratio in the Western US. This was way harder than I thought in today's market - I was shooting for the 1% rule, and had trouble finding even that - I can't imagine finding one that fulfills the 2% rule.

Anyways, decided on Tempe, AZ, around ASU. My parents lived in Phoenix for a long time so I know a bit about the area, and real estate here hasn't fully recovered from the last housing bubble (though it has appreciated greatly in the last 2 years, unfortunately). Any advice from other REIs in the Tempe area would be greatly appreciated- we drove around a lot but couldn't get a great feel for where exactly was the most desirable area to invest.

My 2 friends and I took a flight out to Tempe a few weekends ago and looked at several dozen properties with an agent. Our #1 property was bought before we could place an offer, our #2 property was slightly overpriced and not willing to deal, and we ended up with our #3 property, a 3BR/2BA 1300 SF home about a mile from campus for $180k. Not a killer deal since it will probably rent for $1400-1450, but damn, I don't know how anyone does much better in college areas in Western USA. We are buying with 20% down.

Now it's getting to the nitty gritty, we have inspection on Monday and then a few days after that we are locked in. Hopefully there's nothing deal-killing on inspection, now we have to decide whether to use a property manager or not. I feel like in the internet age I could do as good a job marketing the rental as any PM company, so it comes down to just how many midnight phone calls and other hassles we will have to deal with if we do the PM ourselves. Any advice on that?

Well, I've rambled on enough. Any advice or comments appreciated. Thanks all-