All Forum Posts by: Ray Johnson

@Carlos C. Where are the underwriters saying the problem sits? Are all the underwriters denying for the same reason?

When you back out "paper losses" like depreciation, interest expenses, etc. How much income are you bringing in? The underwriter should be counting 75% of that income as your annual income towards a loan.

They will look at how much money is in the bank that is generated from the properties every month, it's okay to have a paper loss, but if the bank accounts aren't increasing at the end of every bank statement, you aren't making any money in the eyes of the underwriter.

Are you paying yourself from the income/cashflow? If so, the underwriter does not view this as a part of your "paper loss", unless you get a W2 to replace that income usage, it counts against you in underwriting.

@A. Maldonado I was not aware that tenants are still paying rent by check. Make life easier for yourself and have all tenants pay rent electronically from that same checking account they would be using to write you a check. There are many different options to use that are free.

@Crystal An I looked at Cleveland, Indianapolis, Canton, and Columbus.

For the better neighborhoods B+ to C+, the prices and competition were too strong to get any good deals and get a good cashflow margin. The specialty class properties C- and below, I don't invest in since that's not my in my investment criteria.

when I looked at the number of vacant 3/1 or more rentals that were on the market in the zip codes I was interested in, the vacant property numbers were higher than I like to see, and vacant for longer than I like to see. In areas where there are close to or more rentals than Owner Occupied properties that's not a good metric for me.

I'm not sure what property class in these areas you're looking at but that will be a determining factor on competition, pricing, and profit margins.

@Todd Powell dome parts of the West Coast are more than difficult. In CA we are in an environment where a 5-Unit Townhome style building, has been on the market 192 days and the owner just dropped the price a measly 55k, down from $2,125,000. While this deal makes no sense for most investors, I have a feeling the owner will wait this out until someone with a need for long-term capital placement comes along and pays close to what they want for the property.

You're finding off market deals in the Northwest, Have you tried your strategy in Southern California with success?

@Jessica M. Is this a Class A property? It sounds like she is expecting all-around perfection with the property and almost concierge service.

@Erin O'Connor Never ever sell that Unicorn! That property should remain in your family line forever.

A couple of car parking spaces in Santa Monica near the beach cost today what you paid for that property

@James M. Just so I'm clear on what's going on, $1.1 million and you haven't been able to see the interior yet? The owner wants an offer before disturbing the tenants?

You mentioned the $930k off marhet deal, What was the condition of that property?

What does the most recent 4 to 6 Comps come in at?

@Jake Rhodes Is this with the same bank that currently holds the loan? I can see the current bank you're using telling you that, however if it's a different bank, typically you're getting a new loan and the new loan with a new bank requires an appraisal to establish the value of the property. If it's the same bank you currently use, just go to a new bank and problem will be solved.

@Barry Je I'm seeing deals in Washington, DC where the cashflow is smaller, below $180 in my price range that I purchase but the appreciation is available. I have a property in DC that only generates $147 a month but it has appreciated $126,000 in 14 months. I will note that I'm starting to see a slowdown in DC on the appreciation so and it also depends on where you buy in DC, some areas do much better than others. I would recommend checking with the @Russell Brazil of the DC/MD/VA area, he's very dialed in to the various neighborhoods.

@Edwin Martinez There's a reason why it's boarded-up. I would consider a property in most parts of Pico Rivera a Specialty Property class. Meaning this isn't your typical investment property that any investor can acquire and profit smooth sailing. This area will require someone with experience in the C- and D class property space. If it's in the better area of Pico, it's probably worth taking a look into why it's now boarded-up. Could have just been a bad owner/management team. 

When you says it's near a shopping center, Are you saying near a center like the Pico Rivera Towne Center or more like one of the many old small strip centers in Pico Rivera? If it's near the Towne Center, there may have been an owner/management issue and there's an opportunity. 

I currently do not invest in LA, I haven't been able to find any good deals and all the deals that are brought to me don't fit my investment criteria.

How many  Units is this complex?