All Forum Posts by: Seung Lee

I just bought a tax deed property for $48000 and will probably end up putting in $20000 to fix up. I should be able to get $1000 in rent. That's about 1.5%. It's the highest that I've achieved. My others are around 1 and a few in 1.2 range from those purchased during 2009-2010, the good years. These are all in So Cal.

They do exist. But you won't find many on MLS. Or if you do, they will disappear FAST.

Cap rate is essentially the percentage return you would make on your money if you bought it for cash. 

The NOI is the income before any financing costs. So if you have a cap rate of 10 to 12, then you are making about 10-12% on your cash purchase price.

If you do have a loan, then if your loan interest rate and associated annualized costs (APR) is below your cap rate, then your actual return goes up.

In practice, cap rates on deals in San Diego are from 4 to 9 percent depending on the area. Beach areas are very popular and have very low cap rates. The war zones will get close to 10.

Regardless of what else you do, I would not do a 2 year lease. I don't know how you would collect if they broke the lease but its pretty darn hard, if not impossible to collect from tenants. Having a long lease only holds you from raising rent and from having them move out if you don't like them as tenants.  I do 1 year leases so that I turn away any short term tenants, but anything longer is not better for the landlord.

After the 1st year is up, I offer a choice of MTM, 6-9 month lease, or 12 month lease with different rent rates. Longer the lease the smaller the increase.

 It is in County of Riverside. Coachella city. But the county handles all the deeds and recording anyhow if that's where your connections are. Thanks! 

I like that idea.  I think he would take the bottle of Jack over cash.  Apparently the kid across the street sees him ride his bike (probably to the liquor store).

Now you see why I'm so gung ho for the county to get me the tax deed!

Thanks for the reply.  My issue is that there is currently some homeless guy who is a friend of the previous owner's daughter (according to a neighbor) who lives there.  How do I get help from cops for trespassing or even from courts if I have to actually evict without the tax deed in hand?  Can I just print out the ************** page and see if I can get cops to take me seriously?

I plan on renting it out and holding on to it for a while.

Can anyone who have purchased tax deed properties from Riverside chime in?  I purchased a property on May 5th and have been waiting to receive the recorded deed.  How long does it usually take them?

Also, given that owners have 1 year appeal period and title companies won't issue title insurance during that time, what do most buyers do with the property?  Just leave it alone?  Rent it out?  Take the chance and rehab it right away? 

Thanks for the answers.