All Forum Posts by: Sri Voodi

@Walter Roby jr I was lucky that my town home was never vacant and I managed it myself. It did cover capex to an extent where my positive cash flow of 2 years was wiped out. As I said the cash flow was negligible. Good luck with your investing

I'm following this thread. I would love to hear the answers from BP community. I live in LA, my experience was same as you. But my focus has been more on SFH rather than multi units. Last time I checked multi units, they were running into more than 3 million. Please keep us updated if you got an answer to your question thru any other means

2% rule doesn't apply to LA market as matter of fact the whole Socal. You would lucky to get 1% on a investment property, unless you purchased the house off market from a highly motivated seller at a huge discount.

In past I held a townhome for 5 years, the cash flow was negligible but not negative - was just paying enough for PITI but I cashed in the appreciation last year. Will be in the market pretty soon for another similar investment property.

@Zachary Schneider I agree that LA is highly inflated market, but that doesn't seem to hinder people from buying properties at those inflated rates. Last summer I saw houses (700k - 900k) being gone in matter of days, ofcourse the market slowed down during holidays but the appetite is still there. The key here in LA is SCHOOLS. I would consider myself lucky if I can find a SFH (3b/2bath) below 500k in a good school district. It is what it is.

I agree that I can leverage half a dozen properties out of state, but I don't think we are there yet with full time jobs and young girls. But I appreciate your insight. 

@Daniel Cuevas i would really love to hear what strategies you follow to get a property in LA with little to no money. 

In Los Angeles market having 100k will get you just started. So I think its wise to have that kind of money before you try to get your feet wet in markets like LA. 

I have been in the Los Angeles market for almost 8 months, I don't seem to like any properties. Either they have a weird floorplan or priced too high. This got me started on thinking of building a house from scratch. I see vacant lots around 400k on mountains with amazing valley views. And I'm inclining more towards building. 

What are the things I should be aware of - permits, soil testing

I have no building experience and planning on hiring a Contractor to build - I plan to be more hands on after I have one successfully completed project

What are the pros and cons of having a property on a hill (West Hills area)

Is it wise to take my contractor to inspect the land before I put down an offer - it is a .75 acre lot

How much would 1 SQft cost in Los Angeles area? (Assuming the materials used are not too high end or too cheap - somewhere in between)

How long would a typical construction take - in months?

Comps around that area with the no of beds/baths (4/4) that I plan are around +900K - built around 1980's

Financing this project is not an issue

What is the typical contractor mark up?

utilities are on the street - so not an issue

Anything else that I should be paying attention to?

The only way I see is family and Friends. Or go hard money lenders route. Which part of LA do you operate? And I was curious to know in what area in LA you would find a property for 85K in this market. try to get this property if you get it at that price. Good luck and keep us posted

You can use Craigslist/Zillow to advertise your property. And I think expecting $2200 in corona is quite reasonable as well. 
But the real question is - Are you willing to be a landlord? It is a lot of work and very prone to litigations and liabilities. All you need is a TENANT FROM HELL to make your life miserable. And CA laws are more skewed towards the tenants. I would recommend to use a property management to manage the property, and the tenant need not know who the real landlord is. I know it is additional expense, but it is worth for what is shields you from. 

I have been a landlord, but in the hindsight I should have used a property manager to save me all the pain. Good luck with renting

"Though I would suggest looking into this strategy: Buy your primary first, with the primary lower interest rates. Live there a year, then rent it out. Buy another primary, with the primary lower interest rates. Live there a year, then rent it out. Buy another primary, with the primary lower interest rates. Live there a year, then rent it out. You get is gist of it! Just buy every primary with the "rental" numbers in mind and it will work out. Though I assume the banks will still ask the same questions above when acquiring any additional property."

We basically are just following the method you mentioned above. But the variation is we live in the primary residence for more than 2 years, to save on taxes. 

2010 - bought #1 primary residence

2013 - bought #2 primary residence

2013 - 2016 - rented #1 house

2016 - Sold #1 home - profits are tax free if you have lived in the house for at least 3 years of the previous 5 years

2017 - Will be buying a #3 primary residence

2017 - rent or sell #2 

So far it has been working just fine. And did not had any issues with the banks, and we have been getting our loan from the same federal union for both the houses and are preapproved for 3rd one by the same bank

And other thing to keep in mind is, you need to space out your selling primary residence at least 2 years to keep the profits tax free