A lot of people get a Builder's Risk policy during remodels, which is different from a normal homeowner's insurance policy. In my experience, you can only buy them in 3 or 6 month terms (no refund for early cancellation), and they're more expensive than normal, but not 10x the normal rate. You might want to investigate those and see if that helps.

Not yet.

As for the flip I posted about previously, I put a Coming Soon sign in the yard and someone called it who was interested. After showing it to them and their realtor, they submitted a full price offer that I accepted before it was even 100% completed and on the market. We're through the option period already and scheduled to close in late February. I'm pumped to get all my cash out, and start marketing heavily towards single family owners so I can find another flip.

spex x,

I didn't see anything like this in here. Not really sure it fits with investing.

Cliffs: what I think I'm trying to ask is how much of a hassle is it to have rental property a significant distance from you, so you'd have to have a local person manage it.

I've been thinking that I'd like snowbird somewhere warmer in the winters when I retire (probably 2-5 years out, depends how much longer I still like my work).

Anyway, the places I'm thinking about snowbirding to ~1000 miles from here.

So, I'm wondering if it's smarter to try to get a relationship with a realty management company soonish, and try to find something to rent until I'm ready, or just wait til I'm ready and find something at that time.

Another thing I was thinking was, if I got something sooner, it would give me perhaps a better feel for the location. If it turns out to be a neighborhood I don't want to live in, I sell off instead of being more locked in with the latter route.

Thank you for the great thread.

I am thinking about buying a side-by-side duplex and renting out a unit/living in the other.

Anybody have good tips/resources for this? Obviously I can search through the thread but maybe there are some good websites people know off the top of their head.

I'm looking to sell our place buy a bigger place in the Los Angeles area. Seems like the prices have risen so much so fast in the last 2 years how do you guys with foot on the ground see things.

I've been looking and it looks like it's leveled off a bit as some places are having places still on the market after 120+ days.

What areas are you looking at specifically?

What area? Depending on tourism/VR data I would look into Airbnb'ing the other unit. The yields are significantly higher than normal LTR and there are methods to set up that don't require much work on your part.

what do you guys think about the condo market in downtown los angeles? specifically the loft conversions from older commercial historic buildings? these buildings often are very nicely upgraded inside and out and have the mills act which gives you a ton of property tax savings (something like 65-85% off each yr). i went to see a bunch of them in the past few weeks and they seem very nice but prices seem high. I've done a bunch of calcs and the mills act savings almost washes out the HOA's for these units (oftentimes run $600+ per month). another benefit for these buildings from an investors view is that they are exempt from LA rent control due to being part of the adaptive reuse ordinance for the city.

i would most likely be purchasing this unit as an investment property and renting it out. rents in downtown la have soared and from the brokers I've talked to in the past month they all say there is a huge shortage of rental property right now (this could change in the near future w/ all the new residential developments) and that ppl are paying a ton to rent out quality units (between $38-40 per sq foot for rentals).

i am looking for something that is easy to manage (don't want to deal w/ fourplexes+ maybe later in my life) as well as easy to find (quality) tenants and it seems like downtown la lofts fit the bill. ive tracked the market (both renting and buying) for the area the past 1.5 yrs and units sell very quickly (multiple offers in the mills act historic buildings) and units that come out for rent get rented even faster (usually less than a week).

i'm hopefully going to be pulling the trigger on my first rental house here in the next month. College town, so it will be a student rental close to campus. I'm looking in the ~$60k range right now at a few different 3 bedroom houses. These will all rent for right about $300/bed, so $900. I'll be putting 20% down and will have a 15year loan. Should be a nice little money maker going forward.

@cstevens, what are your estimated purchase price vs rents? can't see this making any sort of cash flow with your only avenue of profit being continued appreciation at end sale.

@bode-ist, why 15 yr mortgage and not 30 yr for increased cash flow? Also, why not house hack this property, move into it as your personal residence, rent the other rooms and then move out after the first year and minimize your downpayment (5% vs 20%). Rinse and repeat with less cash in the deal thus higher cash on cash returns.

cstevens, I own two condos in DTLA. I'd like to see your estimated purchase price / rental income / hoa #s but typically these condos aren't +EV unless you're going the Airbnb route. The HOAs are too high and I don't think anyone can accurately speculate on appreciation. One of my units is 750 sf and would be 1.7-2K/mo as a LTR which as a 300k purchase would be atrocious. On Airbnb I'm grossing 4k+/mo with a fully automated system (requires about 4hrs of remote work per mo) which still isn't ideal but I'm happy with it.

Looking in a nice suburb in an upper middle class area in LA, OC, SD I like all those areas within 15 miles of the beach. Yes it's a very wide range.

i am specifically looking at the historic "mills act" approved lofts specifically for this reason (HOA's being very high in condos in DTLA so i need this tax savings to help "wash out" the high HOA fees). purchase price for these units are approx 370-380k for ~600 sf and rent for $1900-2k (these buildings and units are nice). prop taxes are approx $1400-1500/yr with the mills act instead of the normal $4700-5k. parking is usually an extra $150-175 per month

however most of the units in these buildings that come on the market sell around $480-500k (still within my budget) that avg ~750 sf and rent for $2400 (these get multiple offers which is bad for me but also this is a good thing when i decide to sell... these are very desirable buildings in dtla.. rowan and eastern columbia to name a few if your familiar). prop taxes for these are similar to above as mills act calculates prop tax from using the rental value vs the traditional 1.25% of the sales price (so the bigger the unit that you purchase that costs more... but rents more.... the more you save on prop tax).

i understand there are other condos/multiplex's in the area that generate better cash flow/more value (usually in worse parts/buildings of dtla that i wouldn't really be interested in living in if for some reason i needed to... but these quality lofts are in areas/buildings of downtown that i would really like to live in if that time comes).

so in other words i know that w/ these units there is a premium that i am paying for but in my way of thinking for ease of rentability (never seen these units go vacant more than 2 weeks after listing) along w/ ease of "sellability" along w/ prop tax savings how bad is it? I've heard of the airbnb thing but i don't live in LA so i don't think that will work for me. don't i need to be near the actual condo for airbnb to make sense?

several options.

370-380k, ~$450 hoa - rents $1900-2000 but you save ~65-70% on your prop taxes

500k ~470 hoa- rents $2400 and you save ~70-75% on prop taxes

750k ~600+ hoa - rents $3400-$3700 and you save 80+% on prop taxes

i have a very nice house in an upscale suburb while this house is 45 min away in a college town and is a ****ty college rental . Not really feasable in my situation. 15 yr vs 30 because its barely $100/mo more and i'd rather pay it off faster. I'm ok with the lower cash flow to have it paid off in half the time.

edit: actually, i'm now looking at a few 4 bed houses for the same $60k pricepoint, so rents will be more in the $1200/mo range and cashflow much better.

Yeah, these are losing money each and every month. Wouldn't touch them unless you're planning to see some serious appreciation - appreciation that would not only offset your negative cash flow but also provide some profit for taking on 1/2mil of debt. debt again that doesn't produce cash-flow.

No way is this a deal in my book unless you're living in it or AIRBNB, as mentioned above.

Sounds good - that being said, you can always put it on a 30yr note and apply your extra cash-flow (and all other cash flow) to the note to pay off in the same timeframe. I understand there are other factors that may go into your 15yr plan but 30yrs, locked in at awesome rates buys you options not to mention increases your ROI ($100 adds up to a lot in terms of cash on cash return %).

Save the shorter term notes for when you have to do so - like when you max out your conventional personal mortgages and have to start applying commercial loans/portfolio loans with the shorter pay-off.

I'd be buying as many of those 45min away 4bd 60k homes that generate $1200/mo as possible. Great ratio there

Anyone have a lender to refer that's licensed in HI, CA, NV and LA? Please PM

grunching here but i saw some talk of los angeles... one strange thing in california (SF at least) is that so much of real estate taxes are based on historic cost. therefore, i almost never see "for sale" signs (contrast with vancouver BC where probably at least 5% of house are for sale. maybe more in some areas). i imagine there's a big rental market here. can you do long-term rentals? or will the government deem that as effectively a sale.

i do have some commercial real estate (shopping mall lease) questions... OP, do you know about that? or anyone else?

We have an accepted offer as of this morning, so here goes nothing. I ended up with a 4 bedroom for $86.5k ($95k list) that rents out for $1400/mo + utilities. This is a house that is close to my alma mater (and the bars) that is in a better location than the previous ones I looked at as well is in much better shape.

My proforma numbers have been in the 45% expense ratio range, but now having most of the real numbers, it looks like that will be closer to 30-32%. After keeping back about $2k/year for a maintenance fund, this property is going to cash flow $500+/month. Best thing is its rented through May '16, with the tenants already wanting to extend for 2 more years.

Great job. Now that you've pulled the trigger, do you mind mentioning where it is? (I'm sure we could dig through your post history to find your alma mater, but that's time-consuming if not creepy )

@bode-ist, sounds like a great deal, congrats on pulling the trigger. You find the next one yet?

It's at Ball State in Muncie, IN.




I'm going to stick with this one for the first year to ease myself in, but the plan is to add 1 each of the next few years at least.

Sounds good. Careful, it's addicting...I said something similar to you and 18mo later I have six.

Good luck.

got my first property under contract today. A triplex a mile away. Good luck me. Thanks for everyone who helped in here.