All Forum Posts by: Randall Peterson

The friend @Scott Gaspar mentioned is me.  I will readily admit I was lucky to find my triplex and used a VA loan to purchase it 0% down and put in some sweat equity to make the 86 year old property rent ready. It has been a blessing and even the problems and obstacles are lessons I am grateful to experience.

 SoCal seems to have so many different types of areas and even within the IE area that require different strategies.  A duplex in the right area could cash flow smoothly while a Quad in the wrong area will crush your dreams.  Rent rates vary from area to area and it helps to know the realistic data in the area and that takes research.  Good research reduces the speculation side of investment otherwise you will suffer "Garbage in, Garbage out".  

Answering your initial issue is difficult given the current market and particularly in our local market. Sourcing potential duplexes within a 10-15 mile area of Riverside might be rough. Just an initial MLS search for Riverside shows 26 of 878 listings as "Multifamily". Thin pickings but if you comb through them there could be a hidden gem. You just have to put in the work and run numbers over and over again. Use the BP Insight feature, rentometer, apartment.com to figure out rent rates and crunch crunch crunch like PAC-MAN on data. Unit number should just be a component of your "equation" while you crunch.

Your personal comfort level of risk is important as well as how hands on you are with tenant issues.  I use a property manager and love it.  Worth every dollar.

@Lin Pan That is fantastic I am glad it worked out.  It's funny that you used the phrase "Split the difference" because one of my favorite books is "Never Split the Difference" by Chris Voss who was guest on BP podcast #260.  Another great book on discussion/debate/negotiations is "Crucial Conversation".  

@Ken Minard

I definitely see you went into the weeds but that's not bad. Good recap of what's going down but I was curious of how actual lending practices may be changing. The commentary I see is that the market will just keep steaming along.

I am not a lawyer or have experienced anything like this myself but it comes down to how badly you want the property and your overall goal.  Maybe ask them to waive another fee or try and negotiate an alternate price. You will have to flex your communication muscles and your problem solving skills.  Retaining a lawyer to try and fight might be pretty expensive but you can always do a consult.  

Try reading through the original contract to see if they can void your contract based on errors.  If so you may be stuck.  I would still try to reach out nicely and see what they can do.  Honestly housing is so short right now they don't need you they can probably find 10 more buyers.

Has anyone seen any interesting loan requirements or restrictions that are reminiscent of 2008-09 pre-crash and full crash timeframe? Stuff like strange down payment or LTV guideline?

@Craig Dieterich

You should keep buying properties.  Throw them together into a portfolio loan if you really want the interest deduction.  The entity, or lack thereof, would probably have an impact on how you are taxed.  

Find a CPA, then an attorney.  Pay for both to get the piece of mind.  Plus I'm fairly certain some of their fees are deductible.  If you are a reader I would recommend Rich Dad Advisors: Tax-Free Wealth by Tom Wheelwright.

Investment Info:

Small multi-family (2-4 units) buy & hold investment in California.

Purchase price: $210,000
Cash invested: $20,000

VA Loan on Triplex -Househack for 2 years
Refinance to conventional loan after 2 years
Net - $900mo

What made you interested in investing in this type of deal?

VA Loan made 0 down the easiest part!

How did you find this deal and how did you negotiate it?

Original offer was rejected, three months later the owner's agent reach out and after an appraisal saved me $15k it eventually closed at $210k

How did you finance this deal?

VA Loan initially and eventually refinanced with conventional loan.

How did you add value to the deal?

1 unit was unfinished & another kitchen was remodeled
Outdoor living space was expanded and roof replaced

Lessons learned? Challenges?

Personal injury delayed projects by a year but having a tenant made the househack time worth it. I love using property managers!

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Lender- Steve Campbell, Mountain West Financial (message for #)

@Allan R.

You aren't going to like this answer. But it hopefully will make sense and you resolve it quickly.

I am a cop and I would have done the exact same thing. The call for service is a civil matter because it relies on a contract. You need a court order evicting individuals who have established even the most rudimentary residency. Go get an eviction ASAP. Don't waste time.

As for the warrants you state exist. They are probably misdemeanor warrants (Which in CA require the subject to be in public, not inside their residence) or low level offense like traffic violation. They can easily receive a new citation and court date to appear. Be grateful the local PD is prioritizing active crime. Your tenants will get their turn in the system (PS that also costs you more in taxes to cycle half the population into the criminal justice system).

Mind YOUR business - Rich Dad Poor Dad

@Brendan F. Nagle

I also learned to rip the band aid off with a whole roof versus attempting repairs.  During the four months you waited for an answer on the offer were you still searching for local deals?

@Nicole Hoss

You bring up a great point here regarding how different investors perceive value. Value add for SFR and small MF seems to be about changing market value (add rooms) . While larger MF and commercial focuses on increasing rent and lower expenses. We all use a different lense to look through.

Randy