All Forum Posts by: Wes Brand

CA has an "franchise tax" (really an LLC fee) which it charges for every LLC that's owned by someone in CA or does business in CA. You can't get around it by starting the LLC in another state, unless you don't live in CA (if you didn't, then you'd only be taxed on LLCs that operated in CA)

https://www.biggerpockets.com/blogs/2872/24804-foreclosure-facts-foreclosure-from-the-2nd-position

Depends on the bank and your area (and the amount under list you can offer), which is why I suggested you find a real estate agent in your area familiar with REOs

REOs have a specific formula they follow usually -- you're not going to get it for 35k when their asking price is 90k. You need to wait for the price to drop. I'd suggest finding an agent local to you familiar with REOs.

@Helme M. The only way you get to positive cashflow when house hacking a duplex or SFH is if you're in a depressed market. Don't buy into that market unless you believe it's going to change and raise the value of your property (appreciate).

When doing the house-hack thing, compare the cost of renting your side of the property with market rents for similar. If you're paying less than or equal to market rent you have a decent deal on your hands. It might not be the best in the world re. appreciation, but everyone has to live somewhere, and if you're stuck in a market that doesn't have great historical returns, you may as well get paid to be there. 

Oh, and one last thing: if you don't plan to live there forever, and you don't think the market itself makes a good buy-and-hold market, remember to count principle paydown and look at your profit over a long (10-20yr) time period. Depending on the appreciation / rent appreciation in your area a negative up front cashflow can turn positive very quickly. You'll want to look at the historical rates for the past 30 years at least, and pay special attention to how they drop when the market drops. Do rents drop like a stone? Do property values get cut in half? Do they fall by 10% and recover within 2 years? etc

Well, you really can't play hardball in any jurisdiction in the US -- nor would you want to as a decent human being. The guy or girl is a victim of domestic violence and now you want to say "nope, I'm not going to let you leave that situation"? 

Pretty much any court I know about would rule in favor of allowing you to break your lease without penalty when you go there and say "Your honor, I got attacked by my boyfriend/girlfriend and here are the bruises to prove it. I got a restraining order, but now my landlord won't let me move out without paying the full amount remaining on the lease"  Certain jurisdictions might require the tenant get a court ruling, but you're going to end up letting them out anyway, so you're just drawing it out.

@Wayne H. In NJ she can break her lease without penalty due to the restraining order. While she can not force her fiance to leave, because her fiance has the right to be there, she can leave herself. Basically it boils down to "do you want to have to the guy or the girl living in your unit? Because you get to pick one." -- assuming, of course, the fiance has another place to live and doesn't want to try to retain possession. You can't play hardball here.

50% makes sense to me -- you left out buyer/seller agent commissions (6%+), and carrying costs for 6 months. 

@Kenneth Reimer California is a big place. If you have questions about CA landlord tenant law you'll need to specify a city, and I'd suggest starting a new thread so you don't derail this one.

I should add that subleasing means that she's renting to the new tenant. She can collect a security deposit from the new tenant, you still deal with her, not the new tenant. She's still on the hook as far as repairs and rent go, etc. You'll want to qualify the new sub-tenant as normal, but you won't need to inspect or make repairs because you'll still hold on to the original tenant's deposit. The original tenant is liable for the damages her or her buddy caused. 

Unless the rent is under market and you'd rather have her out because you could get more easily. If that's the case, just let her out without worrying about the 2 month lease break fee and re-rent it at a higher amount -- you're getting something, she's getting something, and you don't need to worry about training her to break your lease clauses because you aren't renting to her anymore.