[RoyceKemp]

Technically, you must deduct for actual expenses only, so the suggestions to deduct for carpet cleaning and apply to the new flooring is not legal.

Also, for a 10-year old carpet, it would be hard to justify any charges besides basic cleaning, unless it was in immaculate condition before hand. I have a unit with Italian Wool carpeting at a cost of $120/sqyd that will last 20+ years if properly maintained. We’re in year 9 and it looks great, and it’s a light colored carpet.

The dog being there is a moot point if they are moving out. But any damage is fair game to be deducted from a security deposit.

I haven’t had to clean a place of smoke smell, so I’m not sure of the cost to this, but you should be justified in pursuing this and charging it to the tenant.

If they haven’t moved out, you may wish to do a move-out inspection prior to them moving out to give them an opportunity to remedy some of these issues on their own dime.

Depending on how long they have lived there, you may deduct for other things, like paint, etc. Just depends on the condition you gave it to them, and how long they have lived there, as the longer they have been there, the less you can charge them as the life span of carpet and paint is diminished.1

Good luck.

[RoyceKemp]

wannbelord, what’s your stated goal for this investment? You want a place to park $100K? Then liquidate in 10 years to pay for children’s tuition (<--- which by any metric is currently a rip-off)? This is a reasonable amount of time to Buy and Hold, and potentially yield some appreciation, tax benefits, and cashflow. Carmel Valley, UTC, Irvine, these are more appealing to a high earning demographic. Mira Mesa, not so much. The riskier the demographic, the high the cashflow generally. I own condos in UTC, Oceanside, and San Marcos. I make the most money in the lowest demographic in San Marcos, but have the least headaches with my UTC tenants. It's a tradeoff, so that's why I diversified. San Diego and OC are both tough markets to buy at market prices and then immediately cashflow, but it's doable. You're competing with average buyers who will pay a premium to be in nice area, something that counters the investor's approach. The other thing to find out is if you will receive any tax benefits by purchasing a rental property. Many people automatically assume they will, but if your income is too high, many of those benefits dissipate. There are pros and cons to owning an SFR vs Townhome/Condo. With an SFR, the entire property is your responsibility which can bring some unexpected large expenses: roofs, decks, irrigation, exterior painting, etc, and usually with less amenities to offer renters: no pool, spa, fitness center, no water bill, etc. Of course, you're paying a monthly HOA, so it's a tradeoff. If you want to be "cheap", your new place will quickly look just that after 5 years, which will then affect the demographic that will want to subsequently rent there. Of course, that will then affect resale value, so choose your land-lording approach wisely. I opt to keep my units in tip-top shape. Most have remodeled and present very well, and I command top dollar and quality tenants who appreciate that type of rental. Show that you don't care about your property, and the tenant will follow suit. Ultimately, you just have to choose what style of landlord/investor you are, then that will dictate the type of property you should buy.

[RoyceKemp]

What I get from the Regional Plan Vision is that City Planners are pursuing ways to utilize land and resources more efficiently, to handle the growing demands of the population. As infill consumes the remaining undeveloped land we must segue from a primarily suburban County and evolve into more urban landscapes. Multi-family (i.e. condos) and multi-use development is precisely the way to achieve that. Obviously, going vertical will be inevitable but for now, the views are too precious. Extending and improving mass-transit systems will help too. Coaster ridership has more than tripled since inception, it takes time for people’s behaviors to adjust. Adding the trolley from DT to UTC will have a tremendously positive impact for San Diego. Our major universities (UCSD, SDSU, and USD to some degree) will be accessible via trolley, re-thinking where students consider living to attend these institutions.

If I had it my way, we’d raze Clairemont and do it all over again.

[RoyceKemp]

1/1

[RoyceKemp]

No problem, I love talking Real Estate.

I manage my own properties, except one in Oregon. I started out as a Computer Engineer and first buying real estate when I was in college. A few years ago I decided to get my Broker’s license and this year I plan to open a brokerage here in UTC that offers both Sales and Property Management.

So the typical clientele has been people in transition. I had a guy from Seattle move down because his company imports foods from Mexico and they bought a warehouse here in SD. He wanted to be closer to operations, and his daughter lives here. He wasn’t prepared to move all his stuff down since he was wrapping up a divorce, he stayed with me for 15 months.

Another couple stayed with me for 7 months, they work from home 6 months of the year, then travel. They literally just took off to go travel Europe. He said I might here from him again in six months. They sold all their furnishings when they decided on this lifestyle a few years back.

We aim for longer term, but obviously we want 100% occupancy so we’ll accept shorter terms.

Outside of the one furnished rental in UTC, I only do 12-month leases. That unit was a score, I already owned another unit in that complex so I was very familiar with it when that unit came up, I jumped on it. I also know that the HOA dues which are astoundingly high at $375/mon will come down to $200/month in about 2 years, so there will be a nice bump come that time frame (HOA was poorly managed in years past so we’re having to rebuild reserves).

The 3.99% was from a Credit Union in Ohio I found by shopping on the Internet. The timing was just perfect when it came to rock-bottom rates, as I had been searching for months for a property to pick up. I may have paid points, I can’t recall. I know I would have asked about the points and run the numbers to see if it was worth it, I’m a buy and hold investor.

Rates have gone up from the exceptional lows, but they are still LOW historically speaking. It wasn’t until 2009 that we ever dropped below 5%, EVER!

[RoyceKemp]

I remodeled it with very high end fixtures and now rent it out as a furnished high end rental. So comparable market rent for the unit would be $1400/mo, but because of what I did to the property I get almost $2K/month on average (accounting for vacancy period). I cash flow about $300/month. It helps I put 20% down, and that I am on an ARM, so my interest rate is less than 3% right now, buy my principal balance reduces by $500 each month. With the extra cash flow I pay down the principal by another few K each year, so when rates climb again, I should still be in a cash flow position.

My best buy: In 2012 I bought a 2br condo in San Marcos for $115K. I cash flow on that unit $300/month right out the gate. it’s on a 3.99% loan for 30 years. Comps are going for $160K today.

I’m a buy and hold type of investor, so I focus on long term profitability. I’m okay with market fluctuations and focus on how to maximize returns with what I have, and the best way to do that is get and keep great tenants.

[RoyceKemp]

My advice: Don’t treat the timing of your home purchase like it’s a stock on NASDAQ. Yes, real estate is cyclical. Right now we’re in an uptrend. Are we back at peak levels seen during the bubble years, not even close when adjusted for inflation.

To better answer your question, it really depends on your goals, and your personal situation. How long do you intend to occupy your property? is this a stepping stone to a larger home, or will this become your first investment property?

I own units in both Lucera and Villa Vicenza, two complexes that were converted from apartments to condos during the boom, then suffered big time with foreclosures and are finally on the road to recovery. I cash flow on both those units, so to me, and mind you, one of them I bought in 2005 AT THE PEAK, it doesn’t matter what you pay if you plan to hold a property for a long time, and wait out any market fluctuations.

Another point to consider, when buying a home, there are two things you are shopping, the home itself, and the financing for the home. Most folks only pay attention to home prices, but forget there’s something else to consider, the interest rates charged for financing the home purchase. Right now, we’re still in historically low territory, hovering just below the mid 4s. The impact that a rise in interest rates will have on your buying power if you wait until next year, and say rates are 1% higher, could mean an extra couple hundred a month just to pay for the same home. Right now, you have an opportunity to seize on a really great interest rate that you can lock in for 30 years.

My advice, get in the game as soon as you can (I started while I was in college). Start building equity and lock in today’s low rates for 30 years. Use this home as your first rental when you are ready to move into a larger home in 5 to 10 years.

IMO: Lucera and Venetian are better than Verano.

[RoyceKemp]

Jimmy, good luck with your new escrow. Reading your situation made me feel your pain. As a Realtor, I think you would have a claim for them failing to perform, allowing you to get the money back you spent performing your due diligence. In any case, 90% of the time things go smoothly, it’s those 10% of times when things go sour you really rely on your hired professionals to guide you through it. It’s tough to say if your Realtor dropped the ball on this one, but certainly things could have been done to keep you from paying anything w/o first getting some things cleared up by the seller. It’s all water under the bridge now, at least you’re better armed for your new escrow!

[RoyceKemp]

He was about to start working for Qualcomm (a lot of my clients are in the tech industry since I am a former Computer Engineer) and so this particular client targeted areas centered around Qualcomm (UTC, Mira Mesa).

They bought a single SFR for him to live in, and two condos as rentals. They did use financing since he had established some credit here in the States. So it was a combination of financing on the SFR, and all cash for the condos.

[RoyceKemp]

FIRE immediately!

I am a Realtor, and my clients come first, PERIOD! I give all my clients a signed Performance Pledge and expect to be fired if I’m not living up to their personal standards.

The fact of the matter is, you are the person in control, and as a Realtor I work for you! End of story. I have worked with clients some Buyer clients for months, and then have them decide that maybe San Diego isn’t even right for them. The head of household travels a lot to Boston and other cities so they felt like maybe San Diego isn’t right for them. Guess what, I’m right there supporting their decision because as a Realtor, I’m looking to help people make the best choices for their situation. Sure I sometimes lose a great client, but that’s the business and I’m in it for the long haul!

Good luck, it’s tough to be a Buyer in this market, but your patience will pay off!

[RoyceKemp]

I’m a REALTOR and I can attest to the Chinese buying all-cash! I’ve worked with a client, fresh from getting his Master’s in Mechanical Engineering from Michigan and whose Dad bought him a home, and then a couple of other investment properties.

Also have a former colleague (I was once in Computer Engineering) who is Chinese and helped a friend from mainland China buy a million dollar home in Carlsbad sight unseen. The money is definitely flowing in from China, and is driving up prices.

[RoyceKemp]

Well the market has certainly turned. You should check out http://roycekemp.com/homes-for-sale/UTCCondos/110402/ to see what the latest market conditions are for UTC!

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