All Forum Posts by: Mel Rosario

Hi all!

I was wondering what your opinions were on these investment questions:

1. multiple sfh in a lower middle class neighborhood that each would produce about 100-250 cash flow per house. are

chris,

when i first started out buying property, I went with my heart and bought places that I would live in. Also, I was always afraid of a cemetery, seems weird, but when I drive by one, hairs on my arm would stand up. Since I had a family member recently past, all those experiences are now gone. I find it a peaceful place.

my mindset also has changed, I look for cash flow now.

mel

Hi all!

does anyone have a rental near a cemetery? Other than quiet neighbors, any pros and cons.

I guess those of you who do have rentals nearby, do you have stable long term tenants?

I saw a property a while back and had a chance to purchase it, but when I saw the cemetary around the corner, I backed out. That rental sold within 3 months. Another one is now on the market and thought maybe not to let this one slip away.

mel

Ok, first I invest in California. I know some of you will criticize that it's harder to invest in California, downpayments may need to be higher in order to cash flow, cap rates are not as high, etc. It's working for me so far and this is my comfort zone because I invest in the areas I know well and have easy access. Maybe when I have a self running portfolio, I may venture out of state. I am keeping my day job for now, making good money.

I am coming into cash because I just sold a triplex which gave me a lot of headaches. Now I have options:

Paydown a quad that has about $350k on mortgage and immediately frees up an extra $21K (4.5% mortgage rate) or use this $350k on a downpayment somewhere in california again? From what I have seen, $350 will get me a downpayment on a nice quad as an example (cash flow + principle paydown of course) or leverage 1-3 houses and carry a mortgage etc.

Paying off my mortgage will give me about (net/pretax) $50k in total cash flow combined with my other properties a year (is this enough to get the snowball rolling?). After that being said, I still have adequate funds to put a downpayment for other properties. So my dilemma is to:

1. do not pay down but buy more properties, and use the cash flow from the newly aquired properties to paydown some of the mortgages. (hard to find really great cash flowing rentals where I am, SoCal). this may take a little longer, but in the long run, the tenants will pay for the mortgages, but I would have acquired more properties in a short span.

2. pay down, buy another property or two with my reserve, and use my cash flow to pay down the newer properties (snowballing). depending on the type rental will depend how fast i paydown. ie a multiplex vs sfh will take me a few more extra years to pay off, versus, 2 small condos or sfh.

I have reached an impasse. I do want to acquire more places but I also don't want to over leverage myself either. If anyone here on BP have some creative thoughts or advice, please let me know.

This business is crazy, you always want more, at least that is how I feel.

thanks Jordan,

I am already looking at duplexes, triplexes, and quads. I usually keep rents status quo to keep the peace, usually raise if there are new tenants moving in.

Hello all, I am about to close on my triplex that I want to get rid of due to issues like frequent turnover, repairs, and inadequate amount of meters (I paid for gas) etc. However, the property is paid off and will probably break even when sold. Some of you will say why sell it but, it seemed like there was an issue every month for the last several years.

anyways moving on!!!! starting new!
can anyone please help with several basic questions.

1. does it matter if I buy duplexes/quads or 5units/higher. Here are the scenarios. I may be able to put down payments on 3 duplexes (carry mortgage), pay off a quad, or lg downpayment on a 5unit or bigger (carry mortgage). some of the areas may not be a prime as my triplex but they should cash flow and probably make more than what my triplex gave me, of course I will be doing my due diligence and making sure these will be solid investments.

2. does it matter on the size of the rental? I have noticed with my other rentals that 2bd/1bth or bigger have more stable renters as opposed to 1/1 or studios. anyone have the same experience? I'm probably trying to stay away from mixes unless they are the bigger size rentals ie 2/1, 3/2, 2/2 etc.

3. with some of my research, some places pay for water, gas. I would like to avoid these type of places, but they also seem to have a cheaper selling price, and still looks like a good buy. Do you incorporate your costs by raising rents?

4. I also have noticed that some places give the amount of taxes they paid a certain year, but when I pay for the property, those taxes are going to be different and maybe higher. also, i think a lot of these places base their price on 'what they can get for rent in the future'. anyone have a strategy to try to offset the added fluff price.

I guess those are the pressing questions for now. but I would really appreciate if anyone can comment on them. I'm just undecided whether which i should buy or just hold and see if the market goes down, hate my money doing nothing.

mel

I am trying to buy rental properties in certain areas of California. Some of them have signs and some don't. I would like to ask the tenants what recent work has been done to the house, what they are actually paying, and anything broken etc. Can these be done prior to even placing a offer?

also, is $100 or more net cash per door still the goal of rentals?

Thanks for the post! Ultimate goal is to own everything free and clear and eventually build up enough cash flow to to cause a mass effect. Meaning, when i have enough net income from my properties, I will be able to use it as a downpayment and continue to snowball payments until the new property is paid off. The numbers for this will depend on how much and what type of properties, but I say properties in the 500k range would work.

I was wondering which method helped investors build equity faster? If by SFH, i can see if the property appreciates faster that would be good and I am assuming that's how a lot of people made their money in the past. These days, appreciation may grow at a snail's pace for the next 7-10yrs. As for the MFH, i see that as a grind, fixed income type of investment ( i already have two multiunits). I guess I wanted to know if anyone is noticing any faster returns/wealth build up with any of the 2 methods.

I

I want to add some examples:

There is a house in the orange county area that is 350k 3/2 that can rent for at least 1500/mo while a duplex can be found in a similar area for about 350k where both rents can total 1800-2000/mo. Assuming all operating costs and maintenance costs are same or similar which would be the better buy.

I have noticed lately that single family homes have been falling in certain ares or Orange and Los Angeles Counties in California. Multifamilies have been dropping as well. I am wondering if buying SFH for investing are better these days than MFH?
SFH are cheaper now, hoping normal property appreciation, broader audience to sell to if needed, and I understand that if vacant, then no income.

MFH prices are dropping as well, bigger downpayments, may not appreciate as fast, cashflow seems to be more important, still getting partial mortgage payment if a tenant is gone.

I guess, I am wondering which would be a better investment today.