Real Estate Investing: It's tough for small developers on the West Coast. This is an in-depth rant about my failed experience trying to do a small 8-unit townhouse project on the west coast. |
- It's tough for small developers on the West Coast. This is an in-depth rant about my failed experience trying to do a small 8-unit townhouse project on the west coast.
- Corona virus and tenants
- Just got pre-approved for a Loan and Now I am ready to hit the pavement. I have a question about scheduling tours.
- How does something like this come together?
- Please help me chart a path to achieve my goal!
- Should I sell off my single family portfolio to invest in more MFH/CRE?
- What is a hard stop for you when looking over a property?
- Tenant claiming everything on end of lease inspection "was like that when I moved in."
- For foreign investors, am I correct that the potential profitability is the same as for locals?
- What do you plan to do with your assets when you die if you don't have kids or other family to leave them to?
- Buying rental home for retirement.
- Best Way To Fund Down Payments
- What website do you recommend for commercial real estate comps analysis (seeing what similar properties have sold for, estimated value etc) besides Co Star ?
- FHA in NYC
- Max LTV for refinancing a duplex (which I live in and owner occupy)
- How much should I charge for rent?
- Financing for 4 family building?
- Construction Management route into REI?
- Ontario Canada , creative ways to buy off family?
- Rental turned to flip
- Silly question about mortgage caps
- how do i figure out the process to do tax and title research for properties i want to purchase on the courthouse steps?
| Posted: 01 Mar 2020 04:06 PM PST Moral of the story: Only big developers have the bankroll to navigate the bureaucracy. TL;DR. After two years and $80k wasted, city council rejected our application for the usual BS reasons. If you have ever watched the YouTube doucmentary about the property owner of a laundromat in SF who tries to build housing, my experience feels similar but not as crazy obviously. If you haven't seen it I highly recommend it. So two years ago we began the process to try and combine two adjacent 50x110 lots and build townhouses in a medium sized city. The community consultation process that the city undertook two years prior had resulted in a majority agreement that higher density was wanted in the neighborhood. The neighborhood's proposed-but-not-officially-adopted OCP allowed for up to 4-storey medium density attached housing, so we were confident that our small project would move forward smoothly. One thing that the left coast does is tightly control zoning so that 99% of developments have to apply for spot rezoning to move forward. The cities are loathe to grant higher land values through density to existing property owners without taxing the unrealized profit. The economics of new construction also typically require higher density than any zoning allows. Again, this forces developers to negotiate with cities on how much of the land lift they have to give to the cities as a community contribution. For a 12-storey building it will be at least $1,000,000 that must be paid up-front before the building permit can be approved. So we worked with our architect to start the rezoning process. Drawings, surveys, arborist reports, traffic reports, water, sewer, engineering reports, renderings, and legal fees all cost us about $80,000. We finally submitted our rezoning application and there was another 6-months of added requirements and back-and-forth with the planning department. Two years after starting the process we got our public hearing and presentation in front of city council for our rezoning application. All mini hearings up to that point had green lit our plans. At the hearing, our architect presented the project to public and council. Four members from the public spoke against the project. They complained of increased traffic, parking, and shadows. They said it doesn't fit in with the neighborhood character. As is usually the case, zero citizens took time out of their evening to come and speak in support. Council agreed with the complainers, and also asked many questions about how much money we would give the city to do this project (policy at the time of submission didn't require us to give anything, and the low profit margin on a small development did not allow for additional $ contributions). As you can guess, after two years and $80,000 of unrecoverable costs, council, in 1-hour, rejected our application, sending us and our team reeling in disbelief. We are not sure what to do now. If we try to resubmit it will cost probably another $25,000 up front, and also an additional commitment to give $50,000+ to the city before even getting a building permit. That's all with no guarantee we would even be approved. And if we were approved we would be looking at approximately 18-months and another $150,000 in unrecoverable fees, hearings, variances, re-designs, loan fees, etc, before we have even spent a dollar on materials or labour. These amounts cannot be mortgaged either. Then after spending 10-13% interest on a multi-million dollar construction loan, if we are lucky, we can sell the units and maybe clear a small profit. If the market weakens and we cannot sell all the units, we lose everything. So if anyone wonders why housing is so expensive on the West Coast, think about our story trying to build a meager 8-units and how many developers straight up refuse to risk development in a broken system. Edit: spelling. Also happy to answer any questions about the process. [link] [comments] |
| Posted: 01 Mar 2020 11:34 AM PST How would you handle your rentals if a quarantine occurred in your area and the tenants couldn't work? I can't believe that I have to even consider this but this exact situation is happening all over the world and it's just a matter of time before it occurs in the US (I'm guessing Washington first if the nursing home cases are positive). [link] [comments] |
| Posted: 01 Mar 2020 03:03 PM PST I just got pre-approved for a loan, and have begun the search. I have never purchased property and besides going into open houses whenever I drive past them, new to working seriously searching for properties. Is it worth letting a real estate agent know how much I'm willing to offer before evening viewing the property so as to not waste anyones time or should I keep that to myself until after viewing the property. [link] [comments] |
| How does something like this come together? Posted: 01 Mar 2020 05:42 PM PST 27-year-old millionaire started buying real estate at 23. Now he has somewhere between $5-$10 million in real estate making him $305k in cashflow. That's very impressive. Sounds like he does student rental and rents out by the room. How did he scale up that fast? https://www.cnbc.com/2020/03/01/millennial-millionaire-shares-what-he-refuses-to-spend-money-on.html [link] [comments] |
| Please help me chart a path to achieve my goal! Posted: 01 Mar 2020 10:50 PM PST I am a small-time investor based in Southern California. I set this big audacious goal for myself to achieve $500k/yr in passive net income by 2030. So I have 10 years to do this. I bought all of my current real estate between 2010 and 2015, back when I had a lot of cash. So I never learned much about using leverage. But now that I'm pretty much out of cash (thanks two having two kids and starting a new career), I will need to learn the financing game to get anywhere near my goal. What are your thoughts on how I can reach my goal in the next 10 years? Whether it's through investing in more residential properties or commercial properties? I currently own four investment properties, all single family homes. House 1 (Corona): Zillow value: $358,000 Annual net income: $15,400 Loan balance: $0 House 2 (Garden Grove): Zillow value: $542,000 Annual net income: $21,385 Loan balance: $0 House 3 (Long Beach): Zillow value: $507,000 Annual net income: $27,800 Loan balance: $245,300 House 4 (Orange): Zillow value: $776,000 Annual net income: $9,360 Loan balance: $368,000 Current total passive net income: $73,945 I work in a sales position that is commission based, where I could realistically make $200-300k/yr. How much would I have to make per year and invest in order to reach my goal? Should I be refinancing my two free-and-clear properties and buying something ASAP even if I can't find a great deal? Thanks for any help you can provide! [link] [comments] |
| Should I sell off my single family portfolio to invest in more MFH/CRE? Posted: 01 Mar 2020 05:05 AM PST Need some more experienced folks who have possible made this transition to weigh in if you could... Should I sell my single family portfolio to invest in more MFH/CRE? Quick rundown.... Still work a W2 job and own ~40 houses that are have been fully rehabbed and rented and perform really well in terms of cash flow/ROI. I manage these via a VA/call center. I also own ~60 apartments (one medium sized complex and the other a smaller one). These have outsourced property management and have performed mediocre at best since owning them. The larger unit is a huge value add play, so that one should turnaround in the near future. The equity play is the biggest perceived value I have found as an advantage for multifamily. Also, if I self managed these, I know they would perform better, but these are management intensive. I hate to drink the Kool-Aid, but I'm thinking about some/all single-family portfolio to sell (1031 exchange) invest in more multifamily or other forms of commercial real estate. I know this is what all the gurus say, but I am skeptical because of my current experiences so far. Thoughts? [link] [comments] |
| What is a hard stop for you when looking over a property? Posted: 01 Mar 2020 06:57 PM PST I am talking issues with a property that make you walk away immediately? (Brand new to REI) I took a look at a SFH today where the numbers were nice but there were some structural issues I couldn't get over. The foundation was an old large stone foundation that looked like it was caving in in a corner. The only info from my realtor had from the selling agent was that the property didn't qualify for FHA due to some foundation "issues" with no other info. We hesitated on the deal, I threw in a low ball offer due to the concern, they accepted the only other offer at asking price. Asking price was a pretty good price in my eyes besides the foundation. I am not going to regret the decision but want to educate myself further. Curious of what things make you guys turn around immediately and what things make OTHER people turn away but you don't consider bad. [link] [comments] |
| Tenant claiming everything on end of lease inspection "was like that when I moved in." Posted: 01 Mar 2020 01:34 PM PST Hello all, I'm fairly new into the landlord game. Bought my first duplex last year and am dealing with my first end of lease property inspection. The tenant related to this post was inherited when I bought the place and is claiming that everything I've pointed out "was like that" when she moved in yet none of it was noted on the initial walkthrough document I received from the previous owner. I'm in Florida for legal detail. There is a non functioning treadmill on the back deck which the previous tenant is claiming was left by the previous owner. Along with this there are broken window blinds, various scuffs and dents in the walls, nails/screws in the walls throughout the unit, and uncut grass. I know in Florida, normal wear and tear is something that can't be deducted from the security deposit. Would I be able to deduct the expense for removing the treadmill and cutting the grass? Thanks in advance to any and all advice! I'm just wanting to make sure I have a let to stand on before taking action and what I've found online isn't exactly clear to me. [link] [comments] |
| For foreign investors, am I correct that the potential profitability is the same as for locals? Posted: 01 Mar 2020 10:04 AM PST Foreigners would file for income tax each year and then when the property is sold, 30% will be withheld. If that 30% is more than the capital gains tax, the foreigner will get the difference back. [link] [comments] |
| Posted: 01 Mar 2020 04:51 PM PST |
| Buying rental home for retirement. Posted: 01 Mar 2020 12:55 PM PST My wife and I have been looking into buying a new construction home with the idea of renting it out...paying down the mortgage with the rent and using the rental income or sell the home in 25-30 years as part of our retirement income. We are looking at a growing area in Florida where we can buy a new construction and make about 1 percent a month on the rent. After paying mortgage/insurance/taxes have around $300 extra a month. We plan on building the extra money up for expenses in the future for the rental property and paying the mortgage off a few years faster. It looks like a HELOC on our current home (paid off) would be our best option. We do have the cash for 20 percent down on a rental property though if we go that way. I'm a little concerned about income taxes every year and finding good tenants. Any advice on that or in general with someone just getting started? [link] [comments] |
| Best Way To Fund Down Payments Posted: 01 Mar 2020 07:39 PM PST Now that I have a few homes under my belt I'm looking for advice on the best way to start funding more properties. I've put my own money down at 20-25% and I'd like to figure out more effective ways in the future to acquire property w/o putting that much capital in up front myself. For context, I've been able to find good but not great deals that are pretty turnkey. So I haven't yet been able to get a property that's really cheap, needs some repairs, and then refi to get all the cash out. I'm sure that is one way to make this work, but are there others? [link] [comments] |
| Posted: 01 Mar 2020 07:22 PM PST So far I've looked up reonomy, CRExi and realmassive ? Are those the main competitors to costar ? Any other companies I should look into? And if anyone has tried these three, what are your thoughts? Also, I looked up neighborhoodscout but I think it's strictly residential ? [link] [comments] |
| Posted: 01 Mar 2020 06:44 PM PST Hey guys, I've been contemplating buying a condo in either Manhattan or Queens using an FHA loan. My plan is to purchase a condo with 10% down, unfortunately pay PMI for a year or two then refinance. As anyone on here had experience buying with an FHA loan in NYC? I'm sure it won't be easy to pull off but would love to hear your story! Thanks! [link] [comments] |
| Max LTV for refinancing a duplex (which I live in and owner occupy) Posted: 01 Mar 2020 06:37 PM PST I am under contract to purchase a duplex which I will be owner occupying. I am purchasing it for $200,000 with a 15% down loan at 3.65% interest rate. I am going to do $18,000 in repairs to the duplex, which should increase the appraised value to $240,000. I would consider doing a REFI as soon as possible, in order to recapture some of the money I used for repairs and pull a bit of money out. What is the max LTV banks normally allow someone to REFI a duplex (2 unit multifamily) it the person is owner occupying it? [link] [comments] |
| How much should I charge for rent? Posted: 01 Mar 2020 06:04 PM PST Generally speaking, should I just charge my monthly expenses for the property as my rent? Or should I add a little to make immediate money off the property? [link] [comments] |
| Financing for 4 family building? Posted: 01 Mar 2020 05:21 AM PST I have a 4 family property in Brooklyn and am looking to refinance. While nearly every bank will offer commercial loans of various terms. I can't find any banks that will do a 30 fixed residential loan for a non-owner occupied 4 family. I know some banks do this but none of the major banks will and many local banks will not either, Any recommendations for specific banks or resources that would help find this specific type of financing? [link] [comments] |
| Construction Management route into REI? Posted: 01 Mar 2020 05:06 PM PST College student considering a career in CM and would love to hear your thoughts about how it could supplement personal REI, specifically for Flipping/ Rentals. It seems to me I'd learn to become knowledgeable and efficient managing in all stages of construction, as well as finding properties, dealing with financing, cost estimating etc. and even hopefully have the contacts for trades workers to help with rehabs and projects on the side. Any thoughts? Might there be a better career/ major choice to complement REI? Much appreciated. [link] [comments] |
| Ontario Canada , creative ways to buy off family? Posted: 01 Mar 2020 04:57 PM PST |
| Posted: 01 Mar 2020 12:27 PM PST Purchased a home that was intended to end up as a rental property. The home needed updating and work is almost complete- was approached about selling. What would b my consequences of now marketing it for sale since it has never been rented ? [link] [comments] |
| Silly question about mortgage caps Posted: 01 Mar 2020 06:18 AM PST Hey guys, Silly question, you can only have like 8-10 mortgages depending on your area right... Those of you with more than 10 homes, do you just pay them off and cycle your new open space to a new property? This seems like the obvious answer but i dont think ive heard anyone say it explicitly. [link] [comments] |
| Posted: 01 Mar 2020 07:03 AM PST i live in st louis county, missouri and want to look at houses being sold on the courthouse steps and potentially purchase them but am worried about liens being held against the property that i am not aware of when bidding on these houses. what is the process for figuring out whether or not the homes have issues such as this? [link] [comments] |
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