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[quote=HLS]

It sounds like you bought a condo as a rental property, which is the worst type of property anyone can buy as a rental, and an even worse decision for a first time investor.

I can almost guarantee you that your monthly fee will never go down, and it will not stay the same, it will only go up.

Wait until you get a $500 or $1000 assessment for an HOA deficiency that you cannot dispute.
You cannot pass these on to your tenant.

HOA’s are ticking time bombs, often run by inexperienced people who think they know what they are doing, but really don’t.

If they had not done the submeters, they would have raised your monthly fee.

ALL HOA’s need money to maintain the complex and reserves and there are only a small group of people who MUST pay that money.[/quote]

I’m not sure if I should start a new topic on this, but I was kind of intrigued by this post and thought I’d open it up for a bit more discussion if others are open to it. I guess you could say I’m threadjacking, but I feel like the initial topic has already been put to rest that the tenant is right per the lease.

Yes…I just bought a condo as an investment in Encinitas and am confident in my decision, but I’m glad to open it up for others to prove me wrong as a learning lesson for myself and possibly others.

Worst investement? Even if it cash flows and is in a great area where the rents tend to stay high and most people do not ever want to leave?

Monthly fee will never go down…I know that, but would’nt rent go up…increasing my cash flow or increasing my own reserves toward future mainteinance of the property?

Special Assessment…would’nt that be a write off?

Ticking time bombs…Are they all inexperienced? I’ll agree that some boards are sub-par, but I believe 4 out of 5 board members in the community I’m thinking of live in the community and have for over 10 years. I would think that qualifies them.

Only a small group to pay the fees…would’nt spreading the cost of a new roof over a number or owners be better than having to pay the entire expense yourself?

I really just like the idea of critically thinking for yourself to make your own decisions as opposed to always following others or making sweeping generalizations that may or may not be true in all cases. Of course there is risk in all investment decisions and you do your best to minimize the risk, but you cannot eliminate it. You do the best with the knowledge you have within your means.

I do think that HLS had a great post and know he’s been a pigg much longer than me so I’m not calling anyone out here. I just thought it might be a good housing related discussion. I also like the OP that bought a condo could have made a good investment or could have made a bad one depending on their situation and how the cards fall in the future. Whether or not they did has nothing to do wtih this water bill issue. I think the HOA did what they had to do and it was a much better decision than raising the HOA fees because you can ration your water. I also think that not all HOA’s are bad. I think it is a very thankless job and the salary is $0 which does not necessarily attract the best applicants, but I think a lot of them do their best and a lot probably do a good job. I also feel like there is an aspect of a rental in an HOA where there are rules that need to be followed and the landlord has someone else to enforce them for them…which could be a good thing right?

Maybe I’ll regret chiming in, but maybe I’ll learn something that helps me or others down the road. I think we’re all on this blog right now to learn from everyone else right?

I appreciate anyone that might care to share their thoughts and experiences.

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I’ve used Hume pest control a bunch of times and would recommend them. Real stand up people over there if you want to give them a call to get the quote.

I actually appreciate that I do not have to listen to radio ads non-stop like the other company. They let their work speak for itself.

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[quote=ctr70]it’s been recommended to have someone take a video of the sewer pipe. I really like this area and it’s where I want to live[/quote]
HA! like a virtual tour of the sewer.

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[quote=flu][quote=sdsurfer]The edge is pretty sweet, but for some reason my wife likes the “seats 7” option of the sorento. I think they are both priced similarly and get about the same gas mileage.[/quote]

Trust me. The seat 7 is a gimmick… Find anyone that owns an acura mdx or similar that has a third row, and ask them how often they use the third row and I’d be surprised if anyone uses them in a meaningful way. If your wife wants 7 seats, you’ll be better served with a minivan or with a real, full size SUV….

Here’s the issue. If you have a kid with a kid car seat. You would probably end up putting the car seat in the second row. Because putting it in the 3rd row would limit your trunk space. The moment you put the car seat in the second row, you would probably then make the decision to put the car seat as far away from the side curtain airbags as much as possible. That would mean putting the car seat in the middle.

And finally, the moment you put the car seat in the middle, you can’t fold down the second row seat to get into the third row, making it a real PITA to get into the third row..And anyone who is asked to sit in the third row is already not going to be thrilled about it…

So most likely, the third row will always stay stored away (with the extra added weight you carry)…

I refuse to put anyone in the third row…Because if anyone rear ended me, you’re pretty much sentencing the person/people sitting in the third row to paralysis or worse… The point of an bigger car is safer crumple zone. Anyone sitting in a third row won’t have any room should you get rear ended.[/quote]
Thank you Flu! Very sound advice and I get to say that I read it on a blog so it did not come from me! I hear ya on the minivan. I think minivans are great…fit lots of surfboards too!

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[quote=SD Realtor]I know many people who pretty much live off of passive income from rentals. It is a slow path but slow and steady has been good to them.

I believe the common misconception that many people make is that it is a quick path to wealth and that it is effortless. Neither of these axioms is true. If DONE CORRECTLY it becomes a method to generate income. It does require time, attention and work. Sometimes it is easy and sometimes it is not.

However, you are your own boss… nobody can fire you and you cannot get laid off. It provides a nice protection against inflation and currency fluctuations. If you are in it for the long haul then even if the asset price depreciates, the income flow will not depreciation nearly as much.[/quote]

Cool. Thanks.

I understand the risk as there is always risk for reward, but I feel there is a manageable aspect to it as long as your not counting on appreciation. I would’nt mind making a little every month, but I’m mostly counting on the cash flow to pay for any repairs, vacancy, etc. and in 10,15, 20 years I’ll have more and more passive income and work a little less.

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The edge is pretty sweet, but for some reason my wife likes the “seats 7” option of the sorento. I think they are both priced similarly and get about the same gas mileage.

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What does everyone think of the 2011/2012 Kia Sorento?

I know there was a thread, but it seemed to be mostly geared towards Gary “The Masochist” Busey and less about the cars.

Any insight anyone can share?

My wife is looking at various SUV’s and gunning for one. They look like they’ve stepped up their game a bit lately and the price is still right.

As much as I want to buy American I happened to look in the doorjamb of my Chevy Silverado the a while back and it says it’s made in Canada believe it or not. Thanks!

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[quote=urbanrealtor][quote=paramount]In general if a property is managed by a property management company, the actual eviction process (and related costs) is typically covered under a standard management contract.

What isn’t covered is lost rental revenue, possible damages to the house, etc…that’s where Eviction Protection Insurance comes in – it covers those expenses so essentially an eviction is no cost to you as the property owner at all.

I pay $15/month for the insurance.[/quote]
I am a property manager and I have heard of this but not come across it.
Who carries this that you deal with?

I am very curious.[/quote]

I think there are insurance companies that offer it, but from my experience dealing with management companies they just work the numbers in a way to benefit themselves and make more money off the owners. They calculate how many homes in their portfolio have an eviction in a given year. Figure out the cost associated then divide it by the number of units managed and offer it to everyone with a little extra for themselves. Some of the ones I’ve come across actually have different levels with different monthly rates for more or less coverage in the instance of an eviction.

Say you manage 100 units and charge $15/month as mentioned above. Of course not all of the owners go for it, but if they did that would be 18k a year and would probably cover a couple months of vacancy or a couple tall cans of Coors. Not that all property managers drink Coors…that’s probably just me.

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[quote=zk]Because I can’t think of a better long-term investment. Basically what flu said.

It’s inflation-protected (rents will go up with inflation), cash-flowing, relatively safe, and, as gravy, has the potential for appreciation, especially since we’re buying near (we hope, we think) the low point in this real estate cycle.

If anybody knows of a better long-term investment, I’m all ears. Really.[/quote]
Me too. The only people I hear of that have a better investment idea tend to be trying to sell me something.

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I have more faith in my ability to find a good deal that cash flows and my ability to manage it than I do putting my money in someone else’s hands to do as they please and cross my fingers. I also feel like a home goes up and down, but never to $0 like a stock or other investments can.

I also recall growing up that my grandparents never worked and lived off the cash flow from their various properties in So Cal. All they did was travel around in a motor home going camping and stuff while my parents were off to work. Sure there’s the age aspect, but my mom still works 5 days a week and she is now a grandma and wishing she had a plan a long time ago.

Also…the tax advantages.

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[quote=paramount][quote=sdsurfer]
I kind of went about my decision backwards in a way. Most people look at the cash flow first then the tenant…I wanted to go after a property that would attract a great tenant & cash flow. After I found the property I searched for a tenant that reminded me of myself 10 years ago because I do not remember any of my landlords or property managers having to chase me around for the rent. I learned the tenant first approach at an investment meeting with Ward Hannigan and it seemed to make sense although he does it a bit differently.

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I think most conscientiousness investors/landlords take the same (or nearly so) approach.

Anywho, as I had mentioned I received an email stating that my PM company had been sold to another company (a different rpm franchise). So I decided to do some digging, primarily because I want to decide who manages my property not someone else.

So the previous owner tells me that there was an assignment clause in the contract and that reassigning my contract was a provision in contract.

So I went back and read the contract and sure enough, the reassignment clause is there in black and white. Well, almost.

The clause stated that the contract could only be reassigned to another qualified PM company. The word ‘qualified’ could mean different things; so I went to the California Department of Real Estate and as far as I can tell, anyone who manages properties for compensation MUST possess a California RE Brokers license.

Since I had the names of the new owners, and I plugged their names in and wouldn’t you know it…neither has a license (of any type).[/quote]
I think this thread might be dead, but noticed this and wanted to respond.

They might be the owners, but someone over there must have a brokers license. I’m thinking you could reach out and ask who the broker of record is.

Coincidentally, I actually work with quite a few management companies in town and nationwide through a company I’m involved in and I think if you wanted to get out you could probably just let them know. Most of the management companies I know do not want to work with an owner that does not want to work with them for some reason clause or no clause. There are a bunch of companies/individuals I know of that grow management companies with the intention of selling it when they get to a certain number of units.

Feel free to PM me and I’ll give you a couple that I feel like do a good job, but you’d still want to do your own due diligence of course and there is the aspect that I do manage my property…maybe I’m just dumb, but so far so good.

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[quote=briansd1][quote=sdsurfer] unborn children one day.[/quote]

Unborn children, or yet to be born children? (just kidding)[/quote]
Correct. Got ya. I guess I should be more conscious of that difference. Let’s call them the children my wife would like us to have asap….gotta run. duty calls!

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I bought a condo as an investment property last year in Encinitas.

I kind of went about my decision backwards in a way. Most people look at the cash flow first then the tenant…I wanted to go after a property that would attract a great tenant & cash flow. After I found the property I searched for a tenant that reminded me of myself 10 years ago because I do not remember any of my landlords or property managers having to chase me around for the rent. I learned the tenant first approach at an investment meeting with Ward Hannigan and it seemed to make sense although he does it a bit differently.

Of course there are horror stories out there, but I feel like the people with bad stories tend to be more outspoken than the ones with good stories where the investment went well. I know a lot of people that had it go well and you usually have to ask them about it.

I definitely took a big risk, but I can’t help but think I’m cash flowing about $500 a month and if it comes down to it I could find a tenant in a day if I lowered the rent $100. I intend to keep the rent reasonable so they never move…they probably will, but I’m hoping for the best. I do not know it all as I’m only 34, it might end up being a big mistake but I feel like that condo will be a monthly payment towards a college education for one of my unborn children one day.

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Am I the only one that thinks that kid from the superbad movie is’nt funny anymore now that he lost the weight?

On another note I feel like the only diets that ever helped me were the ones that directly effected my way of life.

for instance…my wetsuit no longer fit as well anymore and I did not have money for a new one so I ate healthier and cut out some of the beers for a few weeks and now that the suit fits better again I can get back in the water without struggling into that suit in the am. I also feel like losing a few lbs helps me get to my feet quicker when I catch a wave.

I know myself and I would’nt diet based on who I see in the mirror and how big they are. I might think or talk about it, but it would not get done. I really think being obese has to directly effect you in some way for you to do something about it.

Aside from the job and family… surfing is my main gig and I’ll do whatever it takes to stay in the water.

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I met a guy and have his card from an investment meeting by the name of Ian Scattergood that has a business called The Permit Pro.

I believe he specializes in this kind of stuff. He said he’s helped plenty of people get permits long after the work has been done, but I personally have never worked with him so I’m not going to vouch for him.

I would look him up and give him a ring if I was in your shoes.

Definitely a tough situation, but I would think the inspector’s job is to find stuff like they found at your home.

I would think this guy Ian’s job is to get you out of trouble in the least expensive way and he seemed to have been doing it a long time, but maybe you can let us know how this all pans out.

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