All Forum Posts by: Sam M.

I wanted to post this photo and share my experience. It's pretty funny now that I look at it. The area is Rubidoux (a small low income area in Riverside CA). This tenant paid rent every month on time. However she was putting things in the back yard. I let it go for a while but it slowly grew. The photo shows what she had when I finally got rid of her. The weird thing is that I didn't have something specific in the lease that would allow me to evict based on the rubbage in the yard. I evicted her on the basis of her dog being tied up. None of this stuff was there when she moved in.

Later it looked like this... 

When you look at the pile she created, it's actually a home. It has a patio and bedroom, garage, off street parking places and even a pool!

I call it "Barbie's Palace". I can laugh about it now. Lesson learned: Never allow tenants to accumulate things in common areas. Cover that in your leases.

@Tajh Walker, I would seek advice from So-Cal investors/landlords. I am far from being an expert... maybe seek the advice of Aaron Mazzrillo since he works out of Riverside.He was on one of the podcasts. 

Think of the 2% rule as something similar to the PE ratio in the stock market. PE ratios are different for different markets. In metropolitan areas of So-Cal you will be hard pressed to find a 2% deal in 2014. 

If your duplex is listed in on the MLS or if a Wholesaler is marketing it, I think it would sell within 24 hours. Personally I wouldn't mind losing a little bit of money for the first year for a property that will make 1.5% for the following ten years. I know you can make more in other states, but if you want properties in Riverside then the deals aren't as good.

If you do your own marketing and buy direct from distressed sellers, maybe the story is different. A property that's listed on MLS or under contract to an investor will probably not sell with 2% income anywhere in the Inland Empire.

I hope I am wrong. Is anyone buying deals today in the Inland Empire / Riverside that make 2% rent? 

Found a large multi near Victorville, CA. Price is around $500k. Financials look good... Potential rent around $8K per month. However 12 of the 18 units are studios and 6 are 1-bed. Studios make me nervous - what do you think?

Will,

I would love to attend... Is there still space available? Do we need to preregister on the meetup site?

Sam

@J Scott,
I read the book that Josh published recently - that was a really cool document. It's convenient to digest a year long experience in one day. I was recently considering building a house and the book was really helpful for me to understand the budget and timeline. I was wondering about hookups - that an area that I still don't know how to guess in terms of budget. In your situation there was a previous house on the lot so you probably already had a water meter, gas and sewer line, correct? Any idea how to estimate those costs when you are building on a new lot, assuming it's on a street that has power, gas, water and sewer at the street or alley?

I should have specified - it's in Lancaster California.

Hi all, I have a vacant property in Lancaster and I was wondering if anyone could recommend a property manager?

I purchased the house with a 50/50 partner - it's a 4-bedroom just north of Ave J and just east of Challenger Way. We will need to do some repairs before we rent it out - I think we will try to make it available for April 1st.

Your help is much appreciated. Thanks.

Dear @Roslyn A.,

$6,000 per year is ~4.6% annual return on your money. Generally, the benefit of real estate investing is that you leverage other people's money - maybe you could pull cash out of that property and buy another one. Let's say you pull out $50K, your net out of pocket for the condo would be $80K. Let's say your loan payment is $250 per month... then your annual rate of return is only ~3.7%. I see the problem now... It seems like you would be better off selling the property and taking the $100K gain (minus taxes and fees) and buying a property with better margins. Consider using a 1031 exchange to avoid taxes.

I have rental properties in So Cal... All purchased since 2008. One is a 3-unit in Rubidoux purchased in 2010. It has a 1.2% ratio including renovation costs.

Rubidoux can be a rough area. After we removed the hoard and evicted the drug dealers, I found three awesome families with good credit and jobs. The drug dealers were paying rent every month but I wanted to create a safe environment so I could attract and retain good tenants. Success! The current tenants (and the neighbors) are hard working, really good people.

@Lena Chen Evictions do take some time in CA. My approach is to get good tenants in the first place. But if you have to evict, budget $1000 and 60 days or offer $500-1000 cash for keys. Be 100% relentless about late payments. Have the 3-day notice on their door on the 6th of the month if they do not pay. Begin the eviction process (or offer cash for keys) on the 9th if they don't pay 100% of rent and late fees. If they really want to stay, you can be nice and offer to let them stay if they pay all rent, late fees and incurred legal fees in cash within 24 hours. Otherwise, bite the bullet and get paying tenants with jobs and good credit. Do not listen to any excuses and don't do any favors. I have heard some doozies and have been burnt bad. I prefer to let a unit stay vacant for an extra month to find the right tenants because it's cheaper in the end.

Please include me too. I have done a few flips this year in So Cal but I work full time. I am not sure if I can make it but I will try to get away.

Sam