All Forum Posts by: Ryan R.

So assuming you do not have a BA degree or higher, get your salesperson license and hang with a broker that specializes in investment RE or property management until you get the experience, if that is the route you wish to go. 

But, if you do not have a specific goal that would require a Brokers license (Brokerage, Mortgage Company, Property Management) why do you want to get it? 

You can manage the deal and do not have to have an agent represent you to purchase a home from a seller and the savings in acquisition/disposition price really doesn't pay that much and takes the important liability off of your shoulders somewhat, if you don't have a license, additionally you do not have to disclose to sellers that you are a licensed person and do not have to worry about being considered a fiduciary to the seller, carrying liability or E&O and MLS dues, ect. It's not that big a deal if you are licensed, having to disclose to sellers, but, why take on the extra potential liability and cost, if you do not wish to have a business that requires it? I am licensed and if I didn't have plan that required the license I would drop it.

If you are considering an prefab ADU, take a look at the prefab options with Back Porch Homes, they are prefab stick built homes and all materials used can be replaced/repaired with products you can find at your favorite hardware store instead of specialty stores like more manufactured homes. They are built with the recent CA ADU laws in mind and several cities have already adopted regulations that these guys exceed. They are built locally as well, in San Bernardino and you can take a tour of the plant and see how they are made. Just run a search and you will find them, they are local investors that were looking to solve a problem with building a granny flat for an elderly relative and it turned into a great idea.

I also know they have talked to Riverside City officials and they were very supportive of the units and were looking at similar city code for ADU's as other cities have adopted that would make the approval process pretty quick and easy for these units, since they are prefab the plans don't change on the design it's only a matter of approving the location of the site you wish to place the unit on.

It was a much faster permitting process and build, I am in the middle of a rehab for a property in Bloomington (SB County) and got the permit pretty quickly (a few weeks, best of my knowledge I think the CA law requires less than 30 days for approval/corrections of ADU once submitted or it defaults to approved as is submitted). Approval was for an "as built" ADU which adds to my total sqft and bed/bath count for resale, now, the biggest obstacle with ADU's is, like mentioned, the comps are lacking for properties with ADU's in this area at this time, but, I hear more and more investors doing it, so hopefully over the next few years we will have easier access to these comps.

I think Riverside is a good market for rentals, I am a little bias as I have lived here for over 40 years and really do love Riverside. Riverside is a centrally located area of So Cal and is an area that is mostly made up of Blue Collar workers that can't quite afford to live in OC or LA and come to this area for lower cost housing. It has a fairly robust economy, with the exception of high tech and medical jobs, with a large shift in the last decade to being a logistics hub for So Cal due to it's central location (the major HWY arteries to the rest of the county run right through the IE) and has some of the largest concentrations of large warehouses rivaled only by New Jersey, the median income is a little below the Cal average by about $10K and about $5K higher than the national average, but, it has been growing. Prices are rising, but, for So Cal it is still one of the last "affordable" areas for residents, rents have been strong and demand is high. Riverside has historically been hit hard when RE markets turn down, but, this was due to the fact that the job market was not as robust for the blue collar workers and a large segment commuted to OC and LA and moved back to were the jobs were, this has changed over the years and with more blue collar jobs offered locally we should (cross your fingers) not be quite as bad during future down turns. Another thing Riverside/San Bernardino has that OC and LA do not have is LAND, we have plenty of room to grow our residential and commercial sectors and is one of the reasons prices have remained 'affordable' over the years. 

As I mentioned, we have a lot of colleges and higher education opportunities, this is a good rental market to tap into, with areas like La Sierra (La Sierra University), Ramona area (Cal Baptist), Magnolia Center/Wood Streets area (RCC and University of Redlands Riv campus) and University area (UCR) all being good locations for rentals if you are looking for a rental for student housing, some of the Universities will even contract with you directly. 

If your demographic is white collar rentals La Sierra Hills, some parts of La Sierra South, Wood Streets, Woodcrest, Orangecrest, Canyon Crest, Alleandro Heights, Sycamore Canyon area, Mission Grove, some parts of Downtown area as well.

If your demographic is blue collar, Downtown Riverside, Wood Streets, Arlington area, Ramona, Magnolia Center area, Sycamore Canyon, Orangecrest, Woodcrest, some parts of Downtown area, La Sierra (Hills and South).  

If you are looking for units, Downtown Riverside area, Eastside (but it is hit and miss), University area (also hit and miss), Canyon Crest (hard to find), Ramona area, La Sierra, Arlanza (hit and miss).

If you are looking to go outside of Riverside city, I would look at Perris, Perris is rapidly becoming a logistics hub with a large Amazon distribution center with several large name companies having the same in the area (Lowes, SEKO, Walgreens, Deckers, Ross, General Mills, Hanes, Wayfair, Starcrest, Home Depot, Clayton Homes. Whirlpool, ect). Prices are on the rise and still in the affordable range and it has been a growing area. Also Murrieta and surrounding areas are also a very desirable area and will have a good demand for rentals for blue collar workers. 

For those interested the "Inland Empire Real Estate Investment Club" can be found on MeetUp.com and meets the 4th Wed every month from 6-9pm on Zoom and will be in-person soon from what I have heard, they also have other meetings throughout the month: Mentor Q&A Meeting (Zoom), RK Cashflow game night(San Bernardino) and Coffee meeting in person in Riverside by the Auto Mall. 

Also there is another one that is a sister club called the "Black Inland Empire Real Estate Investment Club" meets on zoom for now, on the 3rd Wed of the month 6-9PM, this month the speaker is Bill Tan, there are some heavy hitters booked for guest speaking lined up through the rest of the year, you can find it on MeetUp.com as well. 

Probably not, however, with private money anything is possible. I just helped a client without consideration of personal credit, based solely on the numbers for the deal and it was structured as a combination of JV and loan. This is unusual and the purchase price was well below the market price for property in similar condition (total gut). The client gave up equity to get the deal done, but, it was done.

This could be part of a cross collateralization type loan, were several properties are part of the collateral for one large loan. For example each property may only be worth $200,000 and 10 of these properties are collateral for one $800,000 loan, while each property would be upside down and seem to be over encumbered but combined they are only at 40% LTV.... The loan recorded on each property will still show as $800,000 not a fraction of the total loan amount.

The property is located in CA (Riverside, County), Purchased a SFR property with a large lot in poor condition that have several tenants in place, was given a seller credit to be used to help me with eviction or cash for keys. Now here is issue, none of the tenants have a lease or anything in writing.

First set of tenants is a family Mom, Dad and two kids, they negotiated free rent to fix up the house and this was a verbal agreement (it doesn't appear they have done any repairs, at least not properly, for example the shower doesn't have a faucet and they hooked up a garden hose to the bathroom sink and ran it to the shower and put a shower head on the other end of the garden hose). I have been told these guys have a prior eviction on their record.   

Next is about 5 tenants living in different older motor homes parked in the back yard with a gate they access for in and out (kinda like a make shift free mobile home park! LOL), not sure the motor homes are working or able to be driven. None of these guys have a lease and they do not pay rent and they "borrow" electricity from the tenant in the front house, told the tenant in the front house has removed this access. 

We are trying to use Cash for Keys and have started a dialog, however, the tenant upfront is saying they have nothing to do with the ones in the back and they are not going to cooperate. The tenants upfront might take cash for keys but they are being difficult and unreasonable at the moment, so we are anticipating eviction. 

My question is since the tenants in the back yard are very aggressive and uncooperative, is there a faster easier option to eviction for these guys? The story I have and it may not be the truth, is that they are squatters and they did not have permission from anyone to live there, but the previous landlord was elderly and he never pursued getting them out. Can I pursue a trespassing issue with them and get the local sheriff to help remove them before getting a court order to remove them?  

Most conventional lenders will use the LOWER of the purchase price plus actual cost of improvements (with receipts usually) OR appraised value during the first 12 months of ownership. Alt A lenders can sometimes use the higher value at 6 months, but, you will be paying for this in rate. Also keep in mind cash out on a conventional loan will be capped at 75% usually, so if you waited 12 months and the value came in at $130,000 you could get a refi loan amount of approx $97,500.

There are many situations that it can be helpful, however, HML's should be viewed as short term solutions and short term money. For example, like mentioned buy/rehab/rent/refi (good luck trying to get a FNMA approval on an investment property that has some major defects), or if you can't provide document-able income, have to close very quickly or generally can't qualify for traditional lending.

Today's HML is the "new sub-prime" money and combined with Alt A products it is getting very competitive in the space and nothing like it was 30 years ago when I started doing loans and it was 18% and 18 points, these days the money is more institutional money (hedge funds and VC money) than private money (true hard money) like the old days and they want a larger share of the market and you can find rates that are not that much higher than the traditional lenders, also take into account that the rates offered by most of these type of lenders are about where the conventional rates were a decade ago it is still relatively inexpensive money. But having said that, we are talking about an investment and if the numbers work at a higher rate/fee structure, then would you rather take a temporary loan to make the deal happen and make a return on your money or pass and have your money sitting in an account not making money?

PS. Today's average 30 year Conventional O/O rates for borrower's is around the 4.500% +/- range and for a N/O/O you can expect to pay 0.500% to 1.500% higher in rate, with Alt A & HML you can avoid income docs altogether (other than a rental contract if the property is currently rented) and pay 1.250% to 4.000% higher in rate. (I looked at a recent rate sheet for a conventional lender that on a NOO FNMA 30 year fixed 700 fico 80% LTV rate was 6.000% vs one of the HML that I use same criteria rate was 7.750% and at 8.000% you could get an I/O payment)

There are some prefab options that would reduce cost like this https://backporchhomes.lpages.co/back-porch-homes-...

$50K with $3500 down and $439 month is pretty reasonable, not sure if this is something that would work in all areas, or if they are available in your area, but, the idea behind these are that they can be an affordable option with minimal city/county regs to restrict.