All Forum Posts by: Rory Kinnear

 I get your frustration, my first property was paid for with an inheritance, and I had to put way more down than I needed to because despite more than ample funds I had low and uneven income and they seemed uber-focused on those monthly payments, not whether or not they could seize assets to recoup the loss. Banks are not in the business of seizing properties, that has costs and risk associated with it. These loans are often packaged and sold off so the underlying numbers to be solid in their eyes, and the formulas they use are all about monthly payments.

I house hack a condo and was in the same boat some years ago. Congratulations,

Don't rent to friends! You don't want to be a situation where your relationship with them gets in the way of the rent coming in on time. I would do the same due diligence as any regular tenant: income and credit check, and if your area is a competitive rental market I would check references from previous landlords.

I used a lot of roommate finder websites like craigslist, roomster, spare room, just to get a sense of prices with relationship to amenities (parking etc, shared or private bath, etc). I only charged two months up front, the first and a security deposit, but some ask for first and last and security. Also check your local laws regarding tenants v. lodgers, and make sure you lease is legally sound, getting stuck with a bad tenant is even worse when you are living with them!

The above advice is important, I'm not sure if Minnesota requires HOAs to have reserve studies or not. But also look out for potential rental restrictions, I'm in Los Angeles, and a lot of condo HOAs have limits on rentals so the overall % of rented units doesn't go over a certain threshold. That can negatively affect FHA loan qualifications. That said, my building did not have restrictions and it's been a solid investment in an area where a SFR would not have worked. If you can afford it however, I'd say SFR is a better investment. I prefer to own the land under my feet, even if it means more long term planning for capex (roof/plumbing etc).

I don't view it in terms of charity or whether or not it is "our job." It's a disaster and the government has a strong interest in spreading the pain out in a manner that is best for the broader society. My investments are going to perform very poorly the second half of this year and into next year, but over a 10+ year time line that evens out, which is why I disagree with the OP. Over a long term timeline my investments remain solid. This is exactly what it means when we talk about 'risk.' With disasters like this, (or earthquakes, war, etc) there are no solutions that are perfect for all involved. I also, quite strongly I should add, disagree that those who end up homeless in a situation like this are to blame for "failing to prepare." Broader economic realities cannot be laid at the feet of individual decisions like that. There are always exceptions, but I believe the broader data regarding the poor economic resilience of a large portion of society supports that perspective. At the end of the day, there isn't much benefit to arguing over the ethics of social Darwinism however, and I thank you for engaging.

Real Estate is a long term prospect and one with risks, and you cannot expect the government to allow the homelessness crisis to spiral further out of control just to mitigate the risks of your investment portfolio. This is a once in a lifetime (hopefully) crisis. I don't think it's rational to expect your investments to perform as they always have during a time like this while folks are evicted onto the streets. Obviously there will be tenants who take advantage of these protections who don't need it, and there are aspects of these laws that go too far. A failed investment is not quite so bad as homelessness, and the homeless crisis that is looming absent some form of protection will be bad for everyone, including investors.

I am currently struggling with my lodger as he was laid off and cannot find work of any kind in his industry, and my work has been cut in half too. I chose that risk when I bought my property, and selected my tenant well, and saved for contingencies. 

LA is a wonderful place to invest, with high appreciation and low supply. It does not come without strings attached however.

Hi Faris, I did the same thing! I'm in Los Angeles as well (city) and have a roommate to help offset the mortgage. One thing I found is that California does categorize my 'roommate' as a lodger not a tenant, and more specifically a single family lodger. So I did not register it as a rental property because it is still both owner occupied and my primary residence. I do report the rental income. I have a lodger agreement, which differs from a lease in some ways. Obviously you have the right of access to the unit without 24hrs notice because you live here. 

Now lodgers have a lot of the same rights and protections as tenants, even rent control, but from my researc eviction seems to be the big exception. From my understanding if you have a 'single family lodger' and they violate the lease or stop paying rent (or even at the end of a lease) you can serve 30 days notice and then change the locks, no courts needed. That was one of the things that convinced me to go ahead with it as I figured if I was living with the tenant I wouldn't want to be in a situation where I would have to go through the court's unlawful detainer process.

https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CIV§ionNum=1946.5


http://www.lapublichealth.org/eh/docs/housing/brochure/tenright.pdf   (search for lodger)

Hope this helps, if it's just you and a single lodger than the rules are streamlined.

The tax rate is standard, but the appraisal of your property can increase over time, but at a 2% per year cap I believe. The property tax rate depends on which city you are in b/c of additional local property taxes and levies. Once you buy, the rate itself won't change but the assessor can re-evaluate your property value. I am in the city of LA and pay 1.25% and my property value hasn't changed according to the taxman in the past three years.

Thank you very much, you're the second or third person I've heard that from so I'll definitely look into it. Much appreciated.

@John Duston 

We're in Los Feliz, so the greater Hollywood, Pasadena, Burbank region.

Hi folks, was wondering if anyone had any current 2020 referrals for a property management company that serves Condo HOAs. We've had very poor experience with LBPM, which a bit of googling shows is not unusual (downright criminally negligent at this point) and would love to find a smaller local firm to work with our 29 unit building. Thanks for any suggestions!