All Forum Posts by: Roman S.

Yes, the numbers looks good, but there is another problem. The property is pretty old, so it would likely have lots of issues down the road... just finding this out now. 

@Paul Choi thanks for the advice. I will have to check with the city to see if its possible to make them separate properties, probably not easy or not possible, as the current seller would have done it :). Definitely a good idea to make sure all permits are up to date, I will be sure to ask about that. 

@Antoine Martel Thanks for a reply Antonine. Yes, I looked into investing out of state, but I feel like its too far away for me to have any real control of the property... its so hard to find a good PM that you can trust, and I also have no clue about any of those markets. I looked into turn keys in TX and pulled out last minute, when the property didn't upraise, and I was faced with making up the difference in extra downpayment. My hope for Vallejo is a) steady cash flow that can grow as the area develops and the rents grow and b) some appreciation in time as the Vallejo prices are still pretty low for SF Bay area. 

Hello REI gurus! I am looking at my first property that I would be buying as an actual investment, and need some help evaluating it, as the price point is way higher than what I was hoping for. Still, I feel that this is good investment for Vallejo, which is one of the hottest markets currently. It is still recovering from the bankruptcy, but many are moving there from the SF Bay Area for cheaper rents. There are 2 properties on a lot: duplex with 3 bedrooms (1 bath), and another property is also 3 bedrooms (1 bath). They are listing it for $635k, and are collecting about $4500 rent currently (monthly). So not close to the 1% rule, but it can still can flow in my calculations. Plus, I might be able to increase the rents in the future. Sounds like the current owner did some remodeling including new roofs, which is pretty major from what I understand as most houses in Vallejo are over 100 years old. The prop management companies around here charge 8%-10%. If I put down 25%, it would still cash flow, assuming the price doesn't grow due to other offers, which is common in Vallejo currently. I am planning to go see it this weekend, but I am a bit worried about buying this size of a property for this high of a price point as my first investment. I also have a 1 bedroom condo that I have been self managing, which is way different since I have amazing tenants. I live 1 hour away from Vallejo, so this is one of the reasons why I am looking in that area. Also, most areas here don't cash flow:). Any general thoughts? Things to watch out for?

Hope the moderator allows this link, since its just zillow:

https://www.zillow.com/homes/for_sale/2092902148_zpid/38.099929,-122.248368,38.09738,-122.252231_rect/17_zm/  

Thanks for a thorough reply guys. I since met a person who has been working with them to buy 3 houses that they helped rehab, and rent. Its my understanding that for a fee, they introduce you to their network of agents, GCs, PM, even CPAs, which are suppose to be all vetted, though you still have to do your own due diligence to make sure. They also provide some guidance and advice if needed. I think they are giving a class in SF and Santa Clara next week, so I might check it out. Thanks again. 

I guess one upside with owning a property in SF Bay Area is appreciation, even if its barely cash flowing, so may be REFI is not such a bad idea. Also, I can save some money on self managing it as I have been for the past few years. My plan is to try and make it cash flow via REFI, and if not, consider 1031. Thanks for everyone's thoughts!

Thanks everyone for taking the time to respond I will definitely research the 1031 approach and also get a quote for a refinance just so I know exactly what that would cost me. 

Hello real estate gurus. I have a 1 bedroom condo in Daly City, CA that I have been renting out for about 7 years and as my leasing contract is about to expire, I am trying to decide, whether to keep renting it out or sell it, or try to do a 1031 exchange to a property in CA (if I can find something cash flowing:) or even out of state. I was looking at Sacramento multi-units as an example. 

The place is worth about $410k today, though I would need to do a bit of a rehub (~$6k), as it had a family of 4 living there for the past 7 years. I purchased it 12 years ago for $325k (no downpayment) and still have $231k balance on the loan. I have an adjustable loan and my mortgage payments will probably slightly increase to about $1500 a month. I can realistically increase the rent to about $2075. Taking into the account property taxes, insurance and HOA I will be about $250 negative every month (I know that there could also be repairs and vacancy).

I don't necessarily "need" the money now and I could continue leasing it out and paying the monthly difference, but I could also 1031 exchange it for another property that actually cashflows and is a better investment. But, 1031 is a bit tricky and I am a beginner at all this. I could also just sell it, and pay the tax, given some of the dire economic predictions under Trumps administration.

I am leaning toward 1031 exchange, but not sure if this is the best option, any advice is greatly appreciated.  

@Damien C. ^

I guess much depends on your personal situation, the market(s) you are considering and how long you are planning to hold your place. Personally, I feel like its a tricky time with the vast majority of economists predicting economic armageddon if our new president will actually follow through on all his promises. Still, you can always buy in more stable markets (Dallas, Memphis, etc) and there is always a chance that everyone is wrong about their predictions. I think if you are planning to buy and hold for 10+ years, you should be fine.

However, most seasoned investors will probably tell you that you can make money in any market (up/down) and whether you are flipping, or planning to buy and hold. Still, its does get tricky in a more competitive markets like now, especially in volatile real estate markets like San Francisco. I keep hearing that even in other markets you really have to get creative nowadays, unless you get super luck with a killer deal. 

Living in SF, I am also contemplating, whether to buy now or wait, and whether to buy locally (like Sacramento) or out of state like TX. From what I see, its now quite hard to find something cash flowing in CA (B neighborhoods), but there are still opportunities in other markets. For me, I am thinking that I will probably wait another couple of months and see how the political turmoil develops farther and how it effects the economy and real estate. Now sure if I helped, but these are my thoughts.