All Forum Posts by: Rafael Ro

Hello all,

Would really appreciate some advice from experienced investors, particularly in the Coachella Valley area (Palm Springs, Rancho Mirage, Palm Desert, La Quinta, Indio, etc).

This area is going through a bit of a transition - it's very trendy, and it's full of airbnbs, but city laws are getting stricter on these and they're issuing less or no permits in most cities. Still, there are some exceptions.

There are a couple of BIG events that can bring in a lot of money from a few weekend rentals, but this is not necessarily something I'm counting on. I think I would rather have a stable long term tenant. 

I have about 60k cash that I can invest and I would like to buy my first investment property. If that 60k is a 25% downpayment (so I can get good rates) then I'm basically looking for a property that's 240k or less. I would like to buy in a nicer area, particularly South Palm Desert (to attract better tenants but also for some personal reasons). I believe this could potentially get me a condo -- a decent 1 bedroom/studio or a small 2 bedroom in a bad shape, with some luck. 

I can afford to buy this condo, at that price range, and could weather a small storm too, if it came to that. But if we had a covid type situation where tenants could live rent free for over a year, then it would put a decent amount of stress on our finances.

If I wait a year, I believe I'll be able to invest 100k, so could but a 400k property. For 400k, with today's prices, I could get a great 2 or 3 bedroom condo, and possibly a small fixer house. But I'd be tapped out - no money for a remodel. 

As a sidenote, we currently own our primary residence and have a little bit of equity there. 

My question is this - given the above circumstances - what would you recommend for an amateur investor (who's a good researcher)?

1) Hold the cash and wait for the market to drop. I can literally see the same condos selling for 20% less 4-5 months ago. The area is HOT.. but also appreciated a ton very quickly. Maybe it will come down. 

2) Buy a condo as described above.

3) Wait until you have more money to buy something bigger.

4) Whatever else comes to mind. I even considered buying an RV as an investment, but I have 0 interest in RVs so it feels like a silly move. Also considered buying land in the middle of the desert for potential appreciation or to eventually build on.

Would also love to meet anyone that's interested in investing in the area! 

Thank you all!

Thank you! I'm very interested in STRs but it looks like they're making them illegal everywhere, particularly CA. How do you deal with that? Or do you mean 30+ days?

Lol I just assumed that it's near the mountains so it'd get really cold. I guess not. 

Im doing some more digging and questioning my numbers. During the summer it's very expensive but I think the other months are not so bad. Plus, there is a company called IID that offers substantially cheaper electricity and we're sectioned for it. So the new plan is wait a couple of months after we move in and see how things are looking. That way we'll get some real numbers. 

Question -- why would you be concerned about the LTR on this house? It's a nice house, so I would imagine we can get some nice renters to stay there forever. I'd like to keep it. What do you think?

Thanks for that and thank you all again! 

So what's interesting is that a lot of people I ask and that live in these areas with big houses and pool heaters seem to range around these numbers. But I think the best plan is to move in (we're in escrow now, just trying to be proactive), see what our costs would be for the following few months (which would be more average/lower than summer of course) and then see what we can do to increase efficiency and then decide if it makes sense to go solar. 

Thank you so much all!

It sounds pretty straightforward but I can't help but run the numbers and wonder.

I haven't lived in the house yet to know actual numbers but based on what I'm hearing I'd be looking at about 400$/month on average. It's in La Quinta, so the summers are hot and winters cold. So that's 5k/year. 

Solar would cost me roughly 20k. But CA will reimburse me for 26% of that if I do it this year. So we're looking at a cost of about 15k. 

This means that in 3 years I would have made my money back and keep getting free electricity for several more years. 

The tricky part is that I plan to rent this within 2 years. But doesn't a rental with solar become a little more attractive? Or wouldn't it be a little bonus for the renters to stay longer? 

On the flipside, just to make things more confusing, I'm reading that La Quinta is also serviced by something called Imperial Irrigation District which would be about 40-50% cheaper than Edison which is the standard provider for the county. Not sure if it's our choice to be serviced by them or if I have to find out who we're "sectioned" for, but that would make it an easier decision to skip solar. 

Let me know what you think, based on these numbers. The house is about 3k sq ft. 

Thank you again all!!

This is a general question... Do you think solar is worth it, for an area like a desert with plenty of sun and hot summers (AC blasting) raking up big electricity bills? 

But also more specific... Would you think that it would increase the value of a rental?

I'm considering buying them for our house and would likely break even in about 4years. The issue is that I plan to rent this house out in within the next 2 years (ie. before breaking, leaving the tenant reap the rewards). 

Would love to hear your thoughts.

I hear you.. and you're absolutely right. There was a fixer that came up a week ago and we reached out same day only to be told that "there are no more showings available".. clearly someone with local connections would get in. But on the flipside, like you said, a major fixer is going to be picked up all cash from an investor and I cannot do that. A "light" fixer is more along the lines of what we're looking for. 

In the pockets that we're looking for the remodeled houses with our specs sell for 1.2mil. But the granny houses (dated but well maintained, maybe need some light fixes and can update gradually) can go for anywhere between 900k-1mil. That works for us, and we're not in it to flip them so we don't need a big margin. We can afford to pay 950k for a house that the flippers would only pay 900k to keep their margin and I think that's where we may have an edge. 

But I wonder if we could make use the same edge towards wholesalers somehow... For example, say a wholesaler has a fixer but one that's still in OK condition to qualify for financing... They can sell it to flippers for X, or to us for X + 5% premium. That's sort of what I'm trying to get access to. 

Would you say that the only (quick) way to get access to this kind of thing would be a local agent that specializes in it? My issue there is that our cash will be wiped out with this purchase and if my aunt handles the deal she'll give us back roughly 15-20k. So that would be my cost to go with another agent. 

Maybe a different approach would be to offer a finder's fee?? Maybe pay say 5k for someone to get me access to a deal, if I end up closing it? Is there such a thing, and if so, any advice on how to go at it?

Under different circumstances I would have done my research and gone with a top local agent - in this case we're short on cash, so I need anything I can get. 

Hello all,

This is my first post here, after reading and learning a ton from the community. Thank you all so much for sharing! 

I have considered everything from turnkey rentals, flipping, BRRRing, multi unit apartment buildings etc, and I plan to jump in soon and get the ball rolling with my first BRRR. But before that, I would like to buy a house for our family. We're in... CA.

We have set a budget and have been looking at every listing in the areas we're interested in obsessively during the last 3-4 months. I'm finding some that are pretty close, but for the most part we're typically about 10-15% under what the market price is. 

That said, I've also been seeing a lot of flips happening. Houses that were sold at about 25% less a few months ago, showing up back on the market renovated. 

So I decided that I'd like to do the same. I'm not looking for a house with major problems - instead I would like to find something that needs a good amount of work (so many buyers would shy away from it) but that is fine to move in, for now. 

The idea is that I would buy it and then start fixing it up as we go, to bring it up to where we'd want it to be at our pace. The issue is that I do not have that kind of cash laying around.. I can only get it through a mortgage. And that's also why it would need to be at a state where one could move-in (even if very old and worn) -- most of our money would go towards the down payment leaving little room for renovations. 

The question I have for you all is this -- do you think that what I'm looking for is possible and a good way to go at it? If I could pick and choose the exact specs of the property I'm looking for then it would be about 10% over my budget. But if that same property needed work then it would likely be right around my budget. I just haven't found it yet so I'm trying to figure out if going through wholesalers may make sense. 

I really appreciate your help here and any resources you could share!

Thank you in advance!