All Forum Posts by: Sam Magi

Andrew, thank you for the welcome note. I can actually educated folks on matters related to credit and debt. Just helped a client who had just put an offer on a home and had a 560 FICO. In 30 days they were able to improve their score to 600 and get a better rate on their loan. They used the extra cash to pull out a tree from the front yard:)
I am exited to put some money to work for myself after years of self discipline of saving. Dont like the low returns but better than investing in some other asset class.

Amit, Thank you for your advice. I feel much better knowing that in CA it is okay with the low returns on cash. I feel good about 1) the tenants. Concord has a strong hispanic population and most commute. Tenants are good.
2) appreciation: the value of the property was $700k in 2005 and $284k in 1994 as per zillow. looking 20yr history it has appreciated. JMartin another BP collegue also thinks that the Concord area will appreciate better than some other inland areas although the returns are lower than those areas currently.

I will take your advice on not raising rents right away. I still have a lot of learning to do knowing this is my first investment. Eliminating some of the stress is def worth it while i gain confidence and learn the ropes.
Thank you very much for your advice once again.

Thanks Minh, I looked at SanJose but could not find anything in my price range with positive cash flow. I am glad I came on BP. The knowledge you get on this site is just invaluable. I am now trying to think if this is a good investment for me knowing the cash flow is so low.

I have done all the research on rents in the area. Did the whole craigslist thing and visited open houses. The current owner just increased the prices to put the property on the market. If I increase too much right away I might have to find new tenants. I do plan to raise the rents by $50 anyways. I am already calculating that in my income.
thanks for you thoughts I might start looking at other properties.

Thanks J. I cannot get property management with this low returns. I have to manage myself. It is the monument blvd property. The cash on cash return is very low compared to other properties. I have checked comps and don't think I can drive the price down. I have also researched the area and don't think I can charge higher rents. Please advise if you think this is a good investment for long term hold

thank you once again for your input

Hi J,
Thanks for all the input on the property. The building looks in decent shape. Planning to increase rents to $1200/month. Should give me $4800 monthly. If I apply the 50% rule ($2400) should be left for mortgage. In Richmond or walnut creek is it possible to get this?

thanks

Sam

Thank you Brandon, Will and Chris. I have read the step by step case study and I am nowhere close to the 50% rule. Is it possible to have a property in CA with the 50% rule?
I am now concerned about the emphasis on the 50% rule. Everyone talks about it. Here are my property details. I would appreciate any feedback.

Purchase price $700,000
DownPayment $175,000
Loan Amount $525,000
Closing costs and some repairs will be taken care of by the seller and realtor
Gross Annual Rent (4 units) $ 57,600
Gross Annual Expenses $17,665 (maintenance, taxes, utilities, insurance

Debt Service: $2660/ month $31920 annual

Mary! thank you for the warm wishes. I already feel part of the BP family

Hi J,

thank you for the welcome note. so good to hear from someone close by. I am not planning to stay in the 4 plex. All 4 units are currently rented. Cash on cash return is only 5% once I increase the rents. Finished with the inspections and did not find anything on the termite report. Don't know how that happened. the blgd is 45 yrs old. I had termites in my house that is less than 20 yrs old. Bldg is on slab so no crawl space. Thanks for the tips on handyman. It looks like one of the tenants has been doing all the work on the property. I am hoping he will continue once I increase rent. Do you think 5% cash on cash is okay for Concord area?

Hi everyone!!!

My name is Sam and I am so glad to have found this forum. I am in contract to buy a 4 plex unit in California. This is my first investment property and want to learn more about investing and managing 4 plex units. I am 37 yrs old and live an hour east of San Francisco. I work as a credit counselor in the bay area and help folks with credit/debt issues.
thank you to all for the valuable tips and to the moderator of this site