All Forum Posts by: Ricardo Paredes

@Nick Larsson I would tend to agree with posters above that an ADU might not be as popular in PV, Rancho PV as a value add if you're selling the property, but it might make sense for you as the landlord. We just finished an ADU on a detached garage in southbay and are happy with the results. Feel free to message me if you have questions about process or want a contractor recommendation.

@Nick McDonald I don't own anything in oildale, but I did spend a lot of time looking for a small multi-family there in 2019 and helped a friend buy a SFH rental in the area in early 2020. There has always been a mix of respectable and less respectable tenants in the area. There's been a lot of commercial development (new chain restaurants and strip mall improvements), but it still has some rough blocks. My friend inherited a tenant who was constantly behind on rent and was eventually evicted for violating other lease terms, but next tenant has been better. If your rental is reasonably nice you'll have no shortage of potential renters. Screening them will be the hard part.

@Alfredo Castro How does the amount paid by the housing authority compare to the fair market value? If for example the voucher payment for a 1 bedroom is $1765, does that mean if your unit meets the housing authority requirements they'll pay a portion of the $1765 with tenant paying the rest? How did you decide on the right rent for your condo?

@David Sequeira Congrats on finishing your ADU. Is it in the city of Gardena? I've got a Gardena address, but fall within the City of LA (Harbor Gateway). What was your experience with finding contractors and would you recommend yours? We've submitted plans for a detached ADU and are starting to work on finding a contractor(s).

Hey Patrick, congrats on your creative strategy paying off. The rent is very strong for a house that you could buy for $570k. What city is it in and are you using a rent by the room arrangment or is it being used as a halfway house?

@Vivian Brady I own a few and self manage a few rental properties in Taft and while there's definitely demand for rentals right now, it's very tough to find anything that will make more than 5-6% cash on cash return if you're paying a property manager. Most of the smaller homes in Taft (<$150k) were built during the 1920's and 30's so cheaper homes may have a lot of deferred maintenance. Watch out for high property taxes on properties that are in Taft, but do not fall within city limits. I'm currently selling a 3/1 we finished renovating last month (it's listed on the Golden Empire MLS). PM me for details if you're interested.

@Justin Seaverns Are the homes on their own land or in mobile home community? I've yet to find a mobile home in a park that made sense as a rental, but I do own a mobile home in a rural area on it's own small lot that has been my best rental in terms of ROI. As Mark mentioned, mobile homes lose value over time and i've found it can be harder to find good contractors who are willing to work on mobile homes. Financing is also not as advantageous and may not even be an option depending on the age of the home. Depending on the area, your tenant base may be significantly different for a mobile home than for an apartment or single family home, but if the home is in good condition and the numbers make sense it's worth doing additional research. There are several good podcasts and websites that deal exclusively with mobile home investing.

@Meredith Mihm are there separate meters in place or would you just be charging a flare rate for utilities? Insurance may be closer to $200 and with slightly higher vacancy (maybe more realistic) vacancy your ROI starts to look minimal. If youre confident you can bill back utilities or raise rents by $50-$100 do your analysis with those numbers. The extra $300 month and attic conversion are the difference between an okay return and a very good one.

Congrats on a successful first investment Stuart. Was it hard to find good tenants ?

@Dale K Poyser

Good point about there being a number of small cities in California with the potential to cashflow. I own a couple of rentals in Taft and would caution that there's currently very little inventory and it's it's tough to find properties that will help your DTI even if you have positive cash flow on paper. It's been my experience that for the purpose of calculating DTI the bank is going to take 70-75% of your gross rent and subtract PITI from that when calculating your net rental income. A 3 bedroom renting for around $900 with PITI in the $500-600 range is going to improve your DITI, but not by as much as you might think. It can also be challenging getting contractors out to smaller cities if they're more than 15-20 miles away from where they live. Even getting quotes for work has been challenging.