All Forum Posts by: Wesley Kuo

I pay for trash collection (as well as city utilities) for all properties of more than one unit. You should factor these costs into the rent you charge.

Ultimately you will be responsible for it, whether the tenant pays it or not.

The change from city billing to Athens billing was a fiasco. They didn't bother to send new bills to the "billing address" and instead sent them to tenants, who mostly ignored them. They also way overcharged us for multiple properties, assuming we had much more trash collection than we did.

Hey Brendon! Yep that's what I am going to do from now.

It seems like during the transition period that the memo to split billing for multifamily housing is lost somewhere. The city was able to bill my duplex separately but Athens will not.

Anyway, there is a solution to anything. Thanks Brendon! Have a great weekend ahead.

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Originally posted by @Jay Helms:

If your current leases state the tenants will pay for garbage, take over the bill and and charge them back. If not, talk with an attorney to see what's legal, may require a lease addendum. If your garbage fees are static, you could possibly make it monthly so your process is smoother.

Maybe you have more confidence in your tenants, but I have very little confidence that my tenants would take responsibility for the 2nd option you listed.

Hi Jay!

Thank you for your response. I chatted with the service provider and confirmed that the rate is locked in unless otherwise noticed in advance. In this case I think my 1st choice is easier and it keeps potential dispute off the table.

Cheers!

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Hi BP,

The refuse/trash service provider for my rental duplex in Whittier, CA has changed from the city to Athens in November, and the bill could not be separated ever since.

I wonder what the best option is:

- Taking over the billing and charge my 2 units separately when the bill arrives every 3 months

- Have the bill mail to one unit and let tenants split the amount equally and pay on their own

I am also open to suggestions, thank you!

Wes

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Originally posted by @Brendon Woirhaye:

@Wesley Kuo, hope your Whittier duplex is doing well.

I ran the Maxine property through my calculator and come up with similar assumptions to what you found. I think your tax is slightly high, and I think you are over estimating the rent you can get for the house - you're shifting all the utility cost to the tenant after all, which you don't on the duplex. It doesn't pencil out as a good deal even at $2500 monthly.

What Josh says is right - what is the best use of your money? Cashflow is not going to get you there on this property.

What's up Brendon! Hope you are doing well.

My duplex in Whittier is doing well except one tenant pays late.

Are we not allowed to transfer utility costs to tenants in Whittier, or at all?

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Los Angeles County, California

Originally posted by @Josh Gorokhovsky:

@Wesley Kuo,

You have to ask yourself, is this the best use of your money?

Putting down $121K to get $12/month and a 0.12% Cash ROI doesn't seem like the best use of it.

With the current state of the market, California, and anywhere near Los Angeles specifically, doesn't seem to be the best area to invest long-term at the moment. Cap rates and ROI are too low. I know some people making decent returns long term going out of state, but I personally have no done so. If you are set on investing in Los Angeles, I may suggest focusing on short term investments (flips) or focusing on value-add long term plays: finding SFRs zoned R2, duplexes zoned R3, etc and adding more units to increase the rent roll.

Hope that helps!

Thank you Josh. I will look into the zoning that you mentioned.

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Los Angeles County, California

Originally posted by @Ola Rask:

Wesley Kuo: Just looking quickly at your numbers I'm not sure how your mortgage calculation works? Is there an amortization in there also? Otherwise, on a 300k loan with 4.75% interest I get your monthly mortgage payments to $1187/month.
I'm guessing you also have an amortization in there and paying down the mortgage over 30 years. In that case it seems to me that your mortgage costs will eat up any potential profits. Unless you're looking at it as an investment purely for appreciation.

The Cap Rate is more a measurement of risk than anything else - meaning you need comps to know if it's good or not. For example - a 4% cap rate can be really good in a low-risk neighborhood where the going cap rate is 2%, but if you're in an area where others are getting 8% it's not a very attractive number. That said - I personally look for deals with cap rates above 8% because otherwise the cash flow is simply too small.

Hope this helps and that I haven't messed up the numbers myself!

Cheers

Hi Ola,

I use the mortgage calculator that is available on Google. Not sure if it reflects the reality. What mortgage calculation do you use? I'm all ears.

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Los Angeles County, California

Hi,

This is my very first attempt to share my property analysis on the forum, and I hope to contribute, if any, to this category of discussion.

I have a rental duplex in Whittier, California. I've been running math on properties that I can find on public listing such as Redfin and Zillow.

Anyway, without further do, here is the detail:

Property: 9504 Maxine St. Pico Rivera, CA 90660 (Redfin link: https://www.redfin.com/CA/Pico-Rivera/9504-Maxine-...)

Asking: $400k

Sq-ft: 1,419

$/sq-ft: $281.89

Cost Assumptions

Purchase Price: $400k

Down pmt: $100,000 (25% as required for investment property)

Improvement: $15,000 (TLC needed per property description)

Closing Cost: $6,000 (assuming 2% of financed amount)

Total Cost: $421,000

Initial Cash Outlays: $121,000

Financing Assumptions

Finance amt: $300,000

Int rate: 4.750% (estimated only)

Mortgage years: 30

Mortgage monthly pmt: $1,565

Expenses (annual)

Property Tax: $5,200 (assuming 1.30% if the purchased price)

Insurance: $876 (based on Redfin estimate)

Maintenance & repairs: $5,000

Utilities: $0 (Tenant pays utilities)

Total Expenses: $11,076

Revenues

Est. Monthly Rent: $2,500

Annual Rental Income: $30,000

Ratios

Cap rate: 4.73%

Cash on cash return: 0.12%

Monthly cash flow: $12

Not sure if it is a good property to buy. All opinions are welcome. Thank you!

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Los Angeles County, California

Pardon me for deviating from the original question, but whose responsibility it is if the unaccounted long-term guest is injured while living inside the rental unit?

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Here is the update of the situation:

I contacted an eviction attorney office and had them serve the notice since I'd to make sure everything is done properly. The notice was delivered on Wednesday the 16th.

The tenant, after receiving the notice, apologized for the delay. There was an emergency happened to him right around the time the rent is due. Story aside the tenant was asking me to choose one from the following:

1. Use the security deposit to cover the rent

2. Use half of the security deposit and he will come up the other half

3. He will borrow money and pay rent by Friday the 18th.

I picked 3 because I doubt that the security deposit will be replenished after either option 1 or 2.

On Friday I have the rent in my account. Case closed, and lesson learned.

Now I am looking at ways to make this tenant pay on time using incentives or punishments. I don't fancy serving 3 day notice every month.

Thanks all the BP members who advised me on this matter. Happy holidays!

Wes

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I want to thank everyone who responded to my inquiry.

I also reached out to my agent and got a 3 day notice form, which seems different from those provided by the attorney's website site. The form from my agent came from C.A.R.

I will also reach out to the attorney's offices and keep this subject updated here. Hopefully the situation does not escalated...

And once again I truly appreciate the help from BP forum.

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All Forum Posts by: Wesley Kuo

Wesley Kuo has started 9 posts and replied 35 times.

Post: Refuse/Trash Bill Question for Duplex in Whittier, CA

Post: Refuse/Trash Bill Question for Duplex in Whittier, CA

Post: Refuse/Trash Bill Question for Duplex in Whittier, CA

Post: Property Math - Pico Rivera 06/10/2017

Post: Property Math - Pico Rivera 06/10/2017

Post: Property Math - Pico Rivera 06/10/2017

Post: Property Math - Pico Rivera 06/10/2017

Post: Long term guest

Post: Tenant Is Not Paying (Southern California)

Post: Tenant Is Not Paying (Southern California)