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All Forum Posts by: Ryan D.

Ryan D. has started 11 posts and replied 183 times.

Post: Turnkey Frat House - Partnership options?

Ryan D.Posted
  • Rental Property Investor
  • San Jose, CA
  • Posts 188
  • Votes 228

I'm a successful (or reasonably so) investor...I was also in a fraternity in college.....this is a pass, hard pass. 

These are college kids, who will be VERY HARD on your property. There is also additional liability. You will also have little-no control at all over who lives in the building, or what type of "fun" they are having there (trust me). Unless this is gold-mine-money, you're looking at a lot of headaches that are probably not worth it. Go watch "Animal House", this is a reasonably accurate depiction of what happens in a fraternity house (from my experience at any rate).

Now, if you have the chance to own a sorority house, maybe (women, in general, will put a lot less wear & tear on the building), but you still have the same issues of lack of control over who lives in the building.

Post: California to make "Solar "mandatory for new Homes!!!!!!

Ryan D.Posted
  • Rental Property Investor
  • San Jose, CA
  • Posts 188
  • Votes 228

Again, Ideas so good, they have to be mandatory. I am a proponent of solar power, but not a fan of the government compelling individual homeowners to have them on their homes. Distributing out the production of power to home owners forces them, and developers, to assume the burden of installation, maintenance, replacement, and financing, causing massive inefficiencies in all of these, (including the installation in many poorly-placed locations) rather than having the power company responsible for this. This law FORCIBLY takes money out of the pocket of home owners, & puts it into the hands of developers, installers, and financing companies, rather than finding ways to INCENTIVIZE investors & homeowners to adopt the technology (tax credits, easing of other environmental constraints to building, etc). This makes an already expensive place to live, even more expensive. 

California wants to reduce dependence upon fossil fuels, and foreign sources of energy - both good ideas - though how we are going about it is poor execution, and largely inefficient. If the state were serious about it, the legislature would work to get PG&E to install large scale solar energy production facilities, taking advantage of economies of scale, centralized locations (land is dirt cheap in the central valley, Mojave desert, etc), and the existing grid, making the entire enterprise much more efficient, and less expensive for everyone.

Steve (& others) who are involved professionally in the industry - I do appreciate the information & experience you are sharing on this thread, & I agree there is a lot of miss-information about solar. I am a proponent of solar power, just not of home owners & investors being compelled to adopt it whether they want to or not. I recall back in graduate school having an discussion on plausibility of solar power, &  calculating that the entire needs of the US power grid could be satisfied by installing PV cells on just the Nevada triangle (which is already largely owned by the federal government).  

Post: California to make "Solar "mandatory for new Homes!!!!!!

Ryan D.Posted
  • Rental Property Investor
  • San Jose, CA
  • Posts 188
  • Votes 228

Ideas so good, they have to be mandatory ;)

Post: Seller lied about completing repairs...what are my options???

Ryan D.Posted
  • Rental Property Investor
  • San Jose, CA
  • Posts 188
  • Votes 228

@Chanieta Bradley

It’s almost always a bad idea to allow the seller to correct issues before closing. Their motivation is to do the cheapest job possible to just “check the box”, & you (generally) have no control over the quality of work done, who does it, etc.

Your best bet is to negotiate a price reduction equal to the amount of work that is required, then have it done yourself by contractors you trust.

Post: negotiations on a 4 unit multifamily in Jacksonville, fl

Ryan D.Posted
  • Rental Property Investor
  • San Jose, CA
  • Posts 188
  • Votes 228

@Don Konipol

“Buy for what the income can be, but only pay for what the income is”.

Great statement Don - there’s a wealth of wisdom condensed into a single sentence!

I’m gonna have to steal that one.

Post: Investment Gone Bad - Need Exit Strategy

Ryan D.Posted
  • Rental Property Investor
  • San Jose, CA
  • Posts 188
  • Votes 228

I'm confused here - if the property was purchased for $40k cash, how are you "under water around 70k"?

You paid $40k, can put $60k of work into it, and sell for $120k. This is $20k profit, (minus holding costs & taxes). What am I missing here?

Post: Tenant Turned Rental House to Grow House

Ryan D.Posted
  • Rental Property Investor
  • San Jose, CA
  • Posts 188
  • Votes 228

Why would this be treated differently than any other "abandoned property" situation - cant you just remove the abandoned property & go about your business? 

Given that marijuana is now legal in Ca, I'm not sure what the cops would even do about this....sounds like the worst you could get the tenant for is operating a commercial business out of your house without a license (likely a lease violation, but you already have them out, so...) 

I would say just go through the normal procedures of what you have to do with abandoned property - don't treat this any differently than if the tenant had left behind couches & trash, etc. Its certainly not worth your time & money to let the home sit vacant. 

Post: Rental rates not catching up with appreciation/property taxes

Ryan D.Posted
  • Rental Property Investor
  • San Jose, CA
  • Posts 188
  • Votes 228

'I have too much equity in my property' is a good problem to have :)

Where do you get your 5-7% return number from? I suspect this is in error if you are thinking about CCR (cash on equity, really) - cash-on-equity return generally DECREASES every year, as your equity increases faster than your rents (your net annual cash profit divided by the equity in the property - calculate this, its likely very small if what you say is correct). Your IRR is likely strong, but that's of little solace if you have to pull cash out of your pocket each month to carry it.

You can pull equity out (HELOC, refi, etc) & move it to a stronger cash-flowing asset to offset your cash-negative position on the current property.

Additionally, you can also challenge the tax assessment - ask some locals what the likelihood of success is with this tactic, as it varies quite a bit from county to county/state to state. 

BTW apple HQ is in Silicon Valley (Cupertino), not Austin, so you should look into what type of presence they will actually have there (make sure its not admin, warehousing, etc). If it brings the potential for high paying jobs, this would put upward pressure on rents, potentially allowing you to carry the property longer while keeping you in the black. You could try to specifically target apple employees - if they are folks relocating from the Bay Area, they will probably think anything is a steal compared to the COL here. 

Congrats on the nice appreciation btw! 

Post: I dropped out of college last week.

Ryan D.Posted
  • Rental Property Investor
  • San Jose, CA
  • Posts 188
  • Votes 228

Transfer to a less expensive school if you feel your current one is too expensive. Figure out a way to take advantage of your situation to apply your interest in real estate (buy and/or manage MF student housing in the college town). You can pursue RE while still being a student, but you will likely regret not finishing school, particularly if your RE career doesn't pan out like you expect. 

DONT listen to the hype - the vast majority of folks who try to become RE investors do NOT find success. 

Post: Smelling the Roses and Laughing

Ryan D.Posted
  • Rental Property Investor
  • San Jose, CA
  • Posts 188
  • Votes 228

@Jonathan R.

Just remember to be present for your kids you’re building that legacy for. Kids don’t care how much money you make, or how much property the family owns - what they care about it time with mom & dad. It can be difficult to switch gears sometimes, & be “unproductive” playing with the kids....I try to keep in mind the quote (which I’m paraphrasing) “don’t be so busy making a living that you forget to make a life”.