All Forum Posts by: Varun Parkash

 Thanks @Sam Shueh: for your insights. Reverse 1031 has some info. Steep appreciation in the current market seems harder than before. Buying in 2020 makes more sense if there is a possibility of a decline in prices making the deepest decline around 2023 (i am just assuming w/o any magic crystal ball). Area - Irvine, CA has plenty of jobs all around it and is always in high demand. Same goes for Austin, TX now with the firms. 

If anyone here can chime in and explain how strong is the White Collar Job Market of downtown Atlanta versus Austin will be helpful. 

 @Andrew Johnson: Agreed! Interest rates definitely play a major role too. New tax code possibilities with the current administration is a tough future we all face and certainly any mortgage interest rate deductions will impact CA/NY landlords more than anyone else. Initially, I also thought of sticking around with a property for longer than 10 years, but I will have to evaluate priorities going forward before just selling-buying-selling etc. 

 Appreciate your insights, @Andrew Johnson, I have no qualms about the past anymore as I was not into US Real Estate Market back then. Typically based on my research and readings, the market goes through a 7-year bull and 7-year bear cycles. 

Link: LA TIMES

However, with that being said, things have been very different with everything at record-high levels now, I have been hearing folks saying since 2015 that market is going to crash/collapse/tank and here we are an inch away from 2018 with no signs of tanking (although SF rental market is now claimed to have reached bubble popping stage).

In my research on Austin, TX: I am landing on a similar issue like CA, where I will negatively cash flow around 5-7k initially and I want to avoid it. With zip 30028 in GA, I will positive cash flow but then the key lies in whether Forsyth County, GA can ever grow and appreciate as fast as Austin, TX (with the likes of Metro-train to downtown Austin), Samsung, Apple, all IT firms in there. 

Decisions ..Decisions..Decisions ! 

At this point or in next 2-3 years, I don't see myself completely full-time into rental-estate. But any property I purchase, I am trying to keep it for 5-10 years timeframe, before either paying it off or sell it (1031 exchange) with equity and profit into something bigger.

 Thanks @Andrew Johnson for your responses.

1. I bought the condo property in Irvine, CA for 545K with 20% down and in my neighborhood, same property got sold last month for 585K. Under current circumstances, I cannot positive cash flow in Irvine. People who bought in 2011-2012 are easily +++ in cash flow

2. I cannot go beyond 20% down at the moment - for the second rental property - I am doing same 20% down. 

3. My future home/residence where I will live for good is going to be in Southern California (no questions there) - most probably an SFR in Irvine (in 1.5M-2M range). I was thinking the same as you suggested to pool a group of properties in one area rather than multiple in different spots - especially I guess if the appreciation potential is close to same amongst them. Example - for someone who bought in Austin, TX in 2013-2014 now enjoys a 30% appreciation. I don't know if GA state cities -Alpharetta - john creeks etc. had a similar hike. But in the longer run, it will be a hassle to deal with multiple property management firms etc. if I did diversify too much.

Anyone in here who is a part-time investor and have successfully managed 3-5 properties in 2 or different cities - please chime in. 

Right now, I have narrowed in on a newly built SFR in GA - 1/5th the HOA of Irvine, less property tax, good schools and rentability - so considering these factors - I am making the move to grab this second one - with vacancy and repairs + property management company fee etc., I may only make $100/month in a worst-case scenario. In the best case, I might be in 200-300$/month in positive cash flow after PITI. Considering how active investors here or people who bought in the 2011-2013 era are making lots of equity and positive cash flows, it is not the best bet, but I am open to hearing more suggestions.

 Hi Dawn, i did think about it but did not do an in-depth market research on what's available out there and how much appreciation potential is there?

8% appreciation has been just luck, i am not expecting an attached condo to sky-rocket by any means, hence i am planning to sell it. Rents cannot be increased 7.5%, tenants will simply move out. Rent is barely going to touch 3k/month and that's it. My big mistake is i am paying high HOA, special city taxes, CA taxes and not able to enjoy any of the amenities as an investor. I played safe since it was my first purchase, but now have to sell and invest it in better properties - which as you rightly pointed out - cannot be at a selling price of 600k.

I am most probably looking at buying 3 or 2 properties with this 600k money as 1031 exchange.

Hi Dave, yes, at the moment I have selected a couple of properties (have pre-approval letter) out of which I will be putting in my earnest deposit on one of them - this will be my second rental investment. 

Once this is done, then I will be focusing on how much I can get the 1st Irvine property sold for (with tenants already in them) and have it advertised as a 1031 exchange. As far as my understanding, I will get 45-day window by IRS to do the closing on the new property(ies) that must be EQUAL or GREATER than the sold price of the Irvine property to get capital-gains-tax deferred.

As a safe measure, i will actively work to secure my new top 4-5  buying selections before I officially begin the escrow process of selling the Irvine one, that ways I will get more time if anything went wrong within the 45 day closing window as I will get (which begins from the day of sale being closed of Irvine property) more time and have couple of options to pick from.

In case i opt for two properties (each 300K), then i will have to be extra-diligent and pro-active.

Hello, I am an IT Entrepreneur, IT Consultant and a part-time real estate investor, just signed up with BP, bought a brand-new condo property in Irvine CA 2 years ago in zip 92618 (educated myself on everything by talking to folks - google - some forums) as an investment, but the numbers aren't working in my favor and I have negative cash flow (2 mo initial vacancy and high HOA + special city taxes) = Negative 11k (1st year) to Negative 3k (2nd year). I may start breaking even in my 5th year and still not have ++ cash flow. So, the only thing I am backing on is appreciation.

The property has appreciated 8% over 2 years and I can break-even if I sell it now. It is tenant occupied (who are excellent - have a great credit score - good jobs etc. & want to renew their lease for the 3rd time). Rent goes up 3.5% every year. 

Currently, I am getting close to buying a second rental investment property in North Atlanta region. Once I am done with the closing on the 2nd investment rental property - I will be seeking out to do a 1031 exchange with a budget of $550-$650K.

I am looking for Class A properties (preferably SFR) that are in good school districts, with zero to minimum HOA & in developing neighborhoods with considerable chances of appreciation. I am open to diversifying my portfolio across different states or follow the traditional approach of buying 2-3 units in one state/city (this is where expert analysis from seniors/experienced members will help).

I do plan to get my CA real estate license sometime in future but for now, my next 6-9-month focus is to grab this second investment property and then work on selling the Irvine property by doing a 1031 exchange to generate ++ cash flow. 

Long-term (5 years) focus is to establish a portfolio of 5 condos, 5 SFR's = a total of 10 Class A properties in prime areas.

I look forward to learning in this great community about rental investments, foreclosures, networking, getting the best loans etc. 

Thanks ALL !

 Hi Sam, how much has Cumming changed in past 1 year? Is it all inclined towards single family residences? What percentage of appreciation have you seen?

Plz check your inbox jasjeet