All Forum Posts by: Yue Lehman

Hi all, I recently spoke with someone who has been in real estate for years and he's told me that he's found a lot of opportunities in auctions and foreclosure properties. What are your experiences in these types of properties in the past 2 years and what do you expect for the upcoming 2 years? Thank you all for sharing! 

If you are pretty confident with the appreciating market specifically in duplex, and you can float it with enough cash reserve, I'd do it. Good luck! 

What are you trying to achieve through an appraisal? Usually an appraisal is the professional valuation of a property, and is only needed by the lender if there is a buyer wanting to purchase the property using a mortgage. Not sure how doing an appraisal can "protect your investment"... 

The rental knowledge you have is something that other bay area investors don't have, which might be YOUR superpower if you decide to stay in the area. Wherever you choose, starting sooner is better than later! 

Edit - I missed "condo owner". In that case, if you can move out of the condo (assuming that's the primary residence) after owning it for a year or 2, and can manage to purchase another primary residence, and live with roommates, it's still a great strategy. You can then rent out the condo and still be local to learn the ins and outs of investment properties. 

Buying an investment property in the bay is quite cash intensive... and I understand that the local laws don't necessarily help landlords, and single family rentals might not be cashflow positive for a while (years??). Since you already own a likely high appreciating asset (your condo), a cash flowing rental property in the less expensive areas you describe could be a nice diversification.  

Hi Brendan, I try to ask people what their goals of real estate investing are. If it's appreciation, I think staying local in the bay is a really good idea. Save for a primary residence down payment (3% to 5% down, so $50k on a $1mil property), and rent out the rooms to lower your housing costs. If it's immediate cash flow, you'll need 20% to 25% down on an investment property, and in Fresno area, it might be about $80k for a $400k property, and make sure you can charge rent to cover principle, interest, taxes, and insurance. The primary residence route allows you to learn firsthand how to maintain and manage a property. Even if you plan to have property management, you still want to know what's associated with owning a property because any experienced investor will tell you it's not all rainbows. Scott Trench writes about this "house hacking" strategy in his book Set for Life if you want to read more about it! 

 Hello Raj, 

That helps! I'm only familiar with the central valley so I'll stay in the lane. Properties for sale that need cosmetic repairs, you'll probably find them on the MLS so you can definitely set up search alerts on Zillow or find an agent you trust who is familiar with rental properties. There are off market properties but more often than not, those properties need more than cosmetic repairs...

In terms of appreciation properties, I ask myself who would want to buy my rental property when I'm ready to sell and pay a good price for it. Here in the valley, there are a few pockets that I know of - some target single family homes within the Clovis Unified School District to rent to families with children who value the schools, and eventually sell to families; some find homes in established neighborhoods in Fresno (usually with decent size yards) being desirable, and eventually sell to those who appreciate these characteristics of neighborhoods and homes; some like single family homes or small multi-family homes that would make good rentals for young professionals who like the downtown lifestyle, and eventually sell to these young professionals. These are not the only area that would make good appreciation, but rather as examples of what you might want to look for. Hope this helps! 

Personally I think it's a great time to buy as buyers have more leverage compared to the past 2-3 years. One big question is what's your goal/plan of this purchase? Do you plan to buy something that needs to be updated or something that's basically ready to rent out? If you are willing to do some renovations, you have so many more opportunities as many first time home buyers only want to buy move-in ready homes. How much do you value cash flow vs appreciation? Do you need the cash flow ASAP or can you float it for a while if the appreciation opportunity is great? I think going through these questions will help you narrow down to a few buy pockets. 

Looking nice! I don't know about the SD market so well but I imagine it's a good purchase price based on the size of the property from the photo. What's your plan after renovation? Sell? Long term rental? Or else? 

Congratulations and hope the house hacking continues to work for you in any market! I'd definitely recommend interviewing them, discuss PM's responsibilities and owner's responsibilities and see if they offer what you need. Check out ManageX! (559) 432-3111.