All Forum Posts by: Twana Rasoul

@Sino U. choosing a market where you have a leg up of some sort vs just relying on a realtor and property manager would be the way to go. I used to have out of state investments myself and relying on just realtors and property managers in a market and not being a big player there is not necessarily a great position to be in.

Out of state investing always sounds great to many living on the coasts in higher cost living areas but there are many things to keep in mind.  I am in San Diego and the few out of state investors here that do well from what I've seen are the ones that have some sort of advantage of either having lived in those markets previously, having personal contacts there such as family, or something along those lines.  

It's easier and more fun to share stories of success on this platform and adding more doors in these low cost markets, but many of those that end up in a pickle don't speak up as much.  Here are a few things to be aware of especially since you are going after 50k properties in unfamiliar markets:

- A roof replacement usually costs between 8k-12k range whether the house is worth 50k or 850k...that can be 20%+ of the properties value.  That goes for all major systems.  A major expense can wipe out years and years worth of "cashflow'

- A property that cash flows on paper is different from a property cashflowing in reality...There are many times additional expenses to be aware of that may come up in some markets that you are not familiar with...in my case some items were pipes freezing over and much higher vacancy than was figured in initial calculations.

- Markets that have very high cap rates as a whole such as 8% + are typically markets that are perceived to have much higher risk and likely will have little to no appreciation at best and more likely would depreciate.

@Sean Michael As an investor myself starting out in San Diego, low money down was the way to go and initial cash flow was pretty much non existent for my initial purchases.  However, those changed quickly as @Dan H. mentioned the rent appreciation overtime is San Diego is hard to compete with. 

It is a long term play as initially barrier to entry is high and initial cash flow is difficult. But long term, cashflow has looked incredible, including ROI, from my own purchases and experience. I don't have strong opinions one way or another on Denver but have had multiple clients come out here to San Diego to purchase homes and multifamily and keep their properties in the Denver and surrounding areas as rentals and they seem to be happy with it.

I do recommend house hacking with low money down to start with or starting off with more of a starter home with some value add component if you can vs overspending on a "dream home".  You can always start with a duplex, house with adu or similar then after a year or so you can buy a longer term property.

 Yep, and the great thing about the conventional route on a multifamily vs the fha route other than self sufficiency test, you can have a non-occupying co-borrower on a conventional loan but you can't have one on an fha multifamily loan.

@Lesley Cabrera Doesn't sound like you are in a position to have to make a quick decision...take your time and speak with the right professionals before deciding what to do. Couple of items to consider:

1. I wouldn't rely on an appraisal value to determine what to sell your property for necessarily.

2. Selling may not be the best option depending on your goals

3. It is worth having a discussion with a couple of top industrial brokers as well as CPA and potentially attorney before deciding which direction to go.

4. 500k exemption does not apply to business/commercial property

6. If you decide to sell and have a motivated buyer, getting a couple of more motivated buyers together would help your situation.

I can't assist you with any of the above as I'm not familiar with industrial, if you'd liked to be pointed in the right direction I'm happy to help.

Good Luck!

 1 year

@Cederic Frank I started out house hacking locally with single units until moving up to multifamily.  It is worth looking in to to see what you'd qualify for on a multifamily property where you can house hack by renting out one of the units and even renting the other room(s) in the unit you will be occupying.

Since you are opening on distance within san diego going north county such as escondido and fallbrook then beyond that you'd be going to Riverside county...Temecula, Murrieta, Menifee, etc

From what I've seen, those who like to transfer existing properties to an LLC will do so after the sale and some are aware and others are not that there may be a due on sale clause. I haven't heard of one being called due but I'm sure it has happened.

Depending on the reason for transfer to llc, really good insurance such as umbrella policy is a good start and at minimum having it under a trust wouldn't be a bad idea.

@Argel Algura I personally started out in San Diego with no money and saved up enough for low down payment purchases and built up from there.  I also at one point had a few out of state rentals as well that I sold off to purchase more locally.    San Diego can have a much higher barrier to entry than many other markets so it makes it a perfect set up for house hacking to start with.  San Diego also has one of the highest growth in the long term when it comes to not only value appreciation but also rent appreciation.

Even though many would likely say negative cashflow is not ok in any circumstance, I would personally say it depends on the location and the financing. 

For instance, when I started out here in san diego I purchased properties for house hacking with low money down that I was initially a couple of hundred dollars or so negative on after moving out but I had high leverage and the property was retail and in decent shape and I was ok with that.   Each year I would increase rents until I broke even and even cash flowed a bit....and then 1031 exchanged those properties into multifamily as they appreciated hundreds of thousands of dollars.

Some people thought I was not investing correctly since I was ok with negative cashflow and I always compare it to those same people investing into their negative cash flow investment called a 401k.

I recommend either creating your own calculator or team up with an investor/realtor...ideally a local realtor that has numerous investments in your market and have them mentor you.