All Forum Posts by: Steve Graves

Copied this from the California Apartment Association website on 6/21/19: 

Both the city and county of Los Angeles this week advanced policies that will require landlords to consider applicants who would use Section 8 to help pay their rent.

The ordinances – one for the city of L.A., the other for the county’s unincorporated areas – will prohibit landlords from rejecting applicants based on their use of housing vouchers and other government assistance. Further, the laws will prohibit landlords from advertising that Section 8 is not accepted at their properties.

While the city ordinance is expected to take effect in January 2020, the county has not yet determined an effective date for its law.

My question to anyone is knowledgeable in Section 8 is:   How can they make it mandatory for me to accept Section 8 if my properties haven't been Section 8 approved?

I tried to make a duplex into a Section 8 property and there were so many hurdles and road blocks put in my way that I gave up. The property was nice and in good shape but they required all of these ridiculous nickel and dime requirements that were endless. So I guess they can say I need to accept the vouchers but will they waive all of the hoops and hurdles they put up to make a house compliant?

I honestly don't know how much longer I can stay a landlord in California. It's becoming so radically different from the state I grew up in.

I was contemplating the same thing recently. After weighing it out and talking to other investors, who thought it was a bad idea to pay the tax, I did my first 1031. Surprisingly it is really very easy to do and cost me $800 that comes out of escrow. For me the timing was right, had my eye on a foreclosure that kept falling in and out of escrow while I was trying to get a  buyer for my property. The timeline is tight on a 1031 but definitely doable. If I do a sale that I want to pocket the money it'll only be on my personal residence because I get to keep everything below 250k. 

Cost of doing business. Sucks but we all have to pay it.

"Buy land, they're not making anymore of it."   I don't buy land anymore though LOL, no cash flow.

I have a couple of coworkers that bought turnkey properties and one of them still buys them today. One of them, around 10 years ago, only bought brand new homes in many major cities throughout the country. He bought brand new homes because he didn't want things going wrong with the homes for many years. He is totally passive. Uses PM's and has no desire to visit them at all. It's worked out great for him.

My other coworker only buys in Austin Tx and has been buying there since 2004. He buys older homes in good condition and usually only need mimimal work. Paint, carpet, etc. He's very  happy and making great cash flow. Also he uses one PM and has no desire to visit his properties unless he has to.

Like a few on here have said, basically, to each his or her own.

Myself? Well, I buy foreclosures and fixers and once the properties are rehabbed I have instant equity and great cash flow. I have no desire to buy a turn key but I also don't look down on investors that do. If I want to buy a better property I will only do a 1031 exchange. My plan is to retire with good cash flow from my properties and not just own a lot of properties that are only making $150 per door. 

The California state legislature has some laws coming up very soon that will affect all of us. Check it out and be prepared for the possibility of these passing www.caanet.org/ Hope it's ok to post this link if not go to the California Apartment Association website. 

One of them is they're trying to force us to take Section 8 renters. Another one is statewide rent control.

@Stephen Flynt

All that matters is the property you're exchanging into is at least the same price and preferably more so there isn't any issues. For example, their mortgage is 700k so if they take the hit on equity they can sell at a discount of 900k so all they need to do is buy a property at 900k or more. My numbers are only an example and definitely not 100% accurate but you'll get the idea. The 150k leftover after selling expenses can go towards the down payment on the new property, tax deferred. They will be losing some equity but way better than bleeding cash every month.

Are you at least raising the rent on her the maximum amount every year? Sounds like a terrible situation but at least you know what NOT to do with your next tenant once you finally get her out of the place.

I was born and raised in the LA area and the greater LA area and San Fernando Valley are where the big money plays. If you want to buy properties that can cash flow start looking in the Antelope Valley and the Bakersfield area.

1031 exchange it for a multi unit property and start making some money. Dump that place. I've done the negative cash flow before and it's a huge take out of your expenses every month.