All Forum Posts by: Sam Yin

I am going to have to second Jeff and Nathan on this one. Vote NO. 

As it is, the current rent control laws sprinkled across CA create unnecessary challenges for new landlords. It's NOT JUST the rent caps, it all the other conditions that come with it too. Case in point: LA city... and most recently, in the dark of night without warning, Pomona.

I know there will be some on this forum who may disagree and will have their personal stories of how to overcome it and work around it. It is true that one could overcome it. But the way I see it is that, in general, someone who is new to the business and is looking to break in and grow will have barriers that can likely drive them out of REI.

If it were up to me, I would just let the market dictate the rents and it will find equilibrium on its own. It is part of Capitalism. People will pay based on their needs and the supply.

 Generally, if this is an investment property, you should be able to ask the seller to request one for you to review during your due diligence period. This should be made a part of your standard operating procedure as an investor into the future. Not only will if if you a better idea of the condition of the property and the insurance potential, it will also let the seller know you are a serious investor and will understand you better when you negotiate the price down to ensure it is fair and mitigate unknowns.

Request a Loss Run Report on the property. That will give you at least a 5 year history, or more.

@Nina Penuela

I feel courage, humility, and adaptability are some key characteristics.

One must have the courage to act, to engage, and to challenge. At the same time, one must have the humility to know they can make mistakes and learn from others. Above all, you have to be adaptive to the community, changes in policies, AND owner expectations.

Just my 0.02

@James McGovern

I don't mean to sound basic... But all you need to do is ask the agent you will deal with.

I have negotiated down agent commissions about a dozen times. Generally speaking, I negotiated to 4%. How they divide between seller/buyer or keep it all is up to them. On a few occasions I negotiated a flat rate of $4000 because brought the buyer and just wanted them to do the paperwork. On some occasions, I just take a simple contract to a local escrow office and do it myself.

Basically, everything in real estate is negotiable. This applies to all types of real estate. I wouldn't try to negotiate too aggressively if you are not an active investor. Your transaction frequency will help you get better rates.

 Ditto!

 Lots of good responses already from different angles. I think you just need to ask yourself what strategy are you looking to use in your pursuit? What is your end goal? Will this property fit that end goal using the strategy you have in mind?

When I started, my vision was not clear and I did a few charity moves that did not help me. Instead, it really retarded my growth. But I pivoted quickly and treated it as a business and it kicked my growth into high gear. If I stuck with the original mindset, it would have taken me at least 10-15 years of investing and still working W2 to achieve a meaningful return that I could live on. The pivot cut the time down by almost 10 folds.

@Bruce Woodruff you beat me to it! Especially that last sentence.

His is not really an ethics question but more of a business fair practice question... If I spend money to renovate/fix up a place to rent out, can I rent it for more or at market to recoup my cost? Answer: YES. Should I? Answer: YES. Is that fair? Answer: YES.

If I neglect a place, can I increase the rent? Answer: YES. Should I? Answer: NO, unless you want it vacated. Should I give a discount for the lesser living conditions? Answer: that's up to you.

BTW, like others have said, you girl should not have any say in the investment, unless she will be putting in capital. AND IF SHE DID, I would suggest not to go into REI because that charity mentality will lead you to go BK.

@Theresa Hansen you got me reading this based on the way you titled the post. Like @Nathan Gesner said, everyone starts out with ZERO experience, or you've already started and have some experience.

To your post, I started out with zero experience and kind of by accident. However, once I committed to it and viewed it as a business, I was able to achieve FIRE after a couple of years of hustle. I did not start out with a lot of money or information. I learned as I went and made adjustments to overcome hurdles. I discovered BP about 3 years ago and it has definitely given some perspective.

Thus, it can be done. People before me have done it and many more will do it in the future. I think everyone has a little fear going into something new, but just remember, people did it before you. There is no magic formula. You can do it too.

@Randy Vincent

Random squatters are much more rare than local transients or neighbors. I have had to deal with only a few over the last 3 years. They were mainly for long term vacancies, with exception of one.

The first time was 2012 when I dabbled at buying a rental. I closed on a nice house in a B to B+ neighborhood in Ontario, CA. I got the keys from the agent and went to the house to walk it. There was a guy locked in the garage. After a brief engagement, he ran off with his skateboard and never came around again. He was 20-something, likely from the neighborhood. It could have been deadly, but I never broke snap/leather. I stopped carrying 99% of the time after that because I had been out of the army a dozen years already and it too close for comfort.

Next was 2021, when I decided to take REI seriously. Upon closing escrow on a small apartment, I removed 2 transients from an ajointing lot, because they were encamped against the back wall of my parking garages. This was a C- neighborhood. I gave him and his buddy 30 minutes to clear out. One moved slowly than the other. 60 minutes later, I took all items that was left around and trashed it. It was A LOT. The next night, while at the property to let the tenants know I was the new owner, I noticed he was in the community laundry and with his phone plugged, a bottle of piss on the floor, and looked like he was going to sleep in there. I confronted him and he stated I owe him for throwing away his family possessions. I disagreed. Long story short, I put my binder down, told my wife to hold my phone and stand back. Business was settled inside the laundry room and he was removed off the property. The next night, the door to the laundry room was kicked in and no one would admit to witnessing anything. I drove around the neighborhood and found the corner where my new transient friends had relocated/encamped. After a brief engagement, they understood never to come around that building again.

I yanked a few others out, with less physical force, but I knew the risks. I have towed many cars off my properties and had to keep tow drivers safe while they do their service.

There has been a nice lull for a bit. But this past 12 months, I had 3 incidents at the same house, because it was vacant for many months awaiting repairs and inspections. I do not deal directly with it much anymore and I have a local employee that takes care of they business. He tossed out a strung out 20 year old blond that was in the shower on the last occasion. Problem solved.

Moral of the story, regardless of neighborhoods, empty homes draw attention and there are a lot of people looking for shelter. As you grow, it will happen and you just need to deal with it and move forward. Some LL may never know the work it takes by PMs to keep properties from squatters.

I feel I got lucky because it happened to me starting out and I figured that's normal. After being on this forum, I'm willing to bet it's not and many on here would not be able to quickly/efficiency clear out or not let it impact their future REI efforts.