All Forum Posts by: Wes Brand

Sounds like not a great market for SFH, you might want to look into duplexes and such, or expand your search area. Low CoC returns can be fine if you expect to be able to increase it in a short period of time, either via appreciation or rent appreciation. I would not buy in an area local to me, with low returns, if the area was depressed / not likely to appreciate (in rents or home value)

@J. Martin I already plan to check out your meetup :) I found Johnson H's on meetup.com, and unfortunately I can't make it to San Jose (no car at the moment, and even if I did have one/took the train, I'm at work until 7:00ish on tuesday)

Again, sweat equity is fine, but personal where it only makes sense if I'm the one doing the labor is not. I can find the time to do a light rehab myself (carpets, painting, maybe some pergo flooring, etc), but there's no way I can do a gut reno myself and hold down my salaried job. I can most certainly (and am entirely willing to) manage contractors to do the reno for me, assuming the cost of having them do it is priced into the deal. 

Look, I'm not sitting here waiting for an amazing awesome deal to fall into my lap, but I'm also trying to be realistic about what I have time to do. I'm making a decent salary at my W2 job, enough where I can't just quit it to spend my time wandering the streets of SF / Oakland hoping to come across a deal. I also can't quit it to become my own contractor for a month while I gut and reno a property(well, I could, but it'd be a bad investment). I'm no stranger to making things work; I've lived with roommates my entire life because, well, it just makes sense. At the same time, I'm monitoring the access I have to the MLS (zillow and such) pretty much daily and not finding anything that looks like it's the right price and in the right area, which means either it can't be done, or I need to change my strategy. Since you're doing it, and other people are doing it...it's my strategy that's wrong. MLS doesn't have the deals that I want. Sounds like what you said above is the way to go about it -- networking.

I'm currently living in SF proper for well under(1/4th - 1/3rd) market rent, which is where some of my "I don't want to "house hack" outside of SF comes from. It's not lazy, it's that I currently enjoy an apartment in the center of the city with a 15 minute walking commute to everything (and under 5 minutes to grocery stores). To give that up would be a significant quality of life hit, but...I can take that hit if I see a clear path to improving the situation in the short to medium term.

I hate to be the negative guy in the room, but if I were you I'd pass on this one. 

It's one thing if you already have experience or the money to burn, but it's another to come in to a 2.6M deal and say an extra 100k (3%) is "too rich for my blood". If that causes you to stretch, you really have no business playing in 2.6 million dollar markets. What if the entire thing blows up in your face? IMO, Stay in a market where you won't be hating life if it goes wrong until you have the experience to know exactly what could go wrong and how likely it is (or the income to cover a major loss) 

Near as I can see, even if you did pull this off, you're not bringing much to the table. Not the money guy with 20% down+access to credit, not the general manager (no experience), all you'd be doing is finding other investors to buy into it. If I had $2.6 million, why would I invest it with you? (yes, the deal might be solid, but when I'm into those markets there are lots of deals that look good on paper around, and I'm likely more concerned with how safe my investment is)

Normally there's a flat fee for late rent, not a per day fee. If it's too far late you evict, not keep racking up the fees. 

I'd kill the deal and walk. Too much risk there. Do both the tenant and GF qualify for the rents? If not you have even more potential problems...

Besides that, fixing a toilet and painting is a couple hundred dollars at most, not at all equal to a typical security deposit. And even if it were, what happens if there's recoverable damage? You've already 'spent' the deposit on repairs. 

@Arlen Chou It might protect some existing rental voters, but over time it drives up rents because units become even more scarce for future renters.

Yep. Rent control is exactly what's keeping me in my current apartment, removing it from the market entirely even though I'd think about changing. I would at least double (probably 4x) my monthly payment if I bought a place, and my rents would go up about 100% if I moved to another rental. When I was living in NYC (rent control there is a bit less prevalent, since there's a rate when it disappears), I moved every year-ish...as rents went up I found a new place that was in line with what I wanted to spend.

The market will tell you what you need to know about the financials. If you don't know from looking at the property location, size, and condition what the rents should be, you need to learn your market better. Start looking at what's for rent and rented(zillow, rentometer, craigslist should all be considered. Also anything else if there's a popular local site). You can also talk to property managers in the area. You need to be more concerned with the current rents when you look at properties in areas with strong tenants rights or rent control laws.

@Roy N. I was being a bit overly strong -- given this is a new landlord and low income students and the school has them rented, and it's a decent number of units. 

@Andrew Taylor you should find out what the deal is with the school renting the units when you meet with the seller. Does that mean the school decides who gets to stay there? Do you have veto power? Is it dorm-style?  

Are you sure you want to be in the vacation rental market? "Vacation rental so my family can use it" sounds to me like someone is selling you dreams of striking it rich while also having a place to live on the days you want to hit up the vacation spot. 

Reality is, unless you like to travel to the spot in the off season you'll be eating up your potential bookings and thus profit by travelling when everyone else is. Don't expect to use it during the holidays, don't expect to use it during the "on season" or, if you do, realize you bought a second home NOT a vacation rental. 

Of course you can make money with it (not sure about big bear specifically), but you need to run it like a business and be disciplined about it, more so than other property. You should thoroughly investigate the costs and requirements to run a vacation rental business. 

Make sure you research boarding house ordinances and laws in your county/city/state. There are some places where that's illegal on as small as a county-by-county level. They'll generally fine you and force you to evict if they catch you.

It's also far more management and turnover, which can be fine if you're doing it yourself, but don't expect to hire a PM to manage it for a reasonable fee...though I suppose if you get enough units you can hire a fulltime one...