[quote author="Robber Baron" date=1223464331]Yes, the building is under rent control. The rents on the two apartments can be raised because they have both moved people in who are not on the lease which allows a 10% per person increase. My parents are my agents. They are 50/50 on the deal. My dad would rather see me in the house (me too but then we are talking about 3500 to 4000 a month) not for the money but because he likes would never live in an apartment. He says its a good deal for the area, but not a great deal. My mom stares at the stock market each day and cries. She sits in a puddle of terror.
90k is it. Probably too many trips to Europe and Hawaii. I paid off all my student loans, have no debt except the car and that is just for FICO purposes. I make descent money, but tuck away 15.5K in the 457 plan and another ~750 a month in savings accounts. So, 2k while double what I am paying now would be easy for me and I can continue to save. Purchase price started at 750000. Rumor is there is one other offer at asking, my parents are throwing in their commission and the loan is free. I have 5K from grandma and more coming from other family members and I was just going to use that as the basis for the new nest egg. Can't sleep with no money in the bank.
Have not checked out the electrical yet. Will bet a bid for my unit and for all. The pmi makes me cry too. Other stuff for sale is all over the map. Cheapest is 629000 over on 25th Street, up to over a million. All for four units. Prices are high here, for houses too. I don't know if it the longshoremen and the large amounts of cash. Or the fact that people never leave San Pedro. But prices in the surrounding areas (and below Pacific) have fallen 25%+, here...maybe 12%. Very frustrating for a girl waiting to break into the market.</blockquote>
Okay... I sorta know the area, and it is a high rental unit area. Meaning there are plenty of rental units in the area. This is bad if you have turnover, but good if you have long term tenants. <strong>YOU DO NOT WANT TO LOSE ON TIME PAYING LONG TERM TENANTS</strong>. Raising rents could make you lose your tenants. Since this is a subsidized unit building, do you really want to deal with the possibility of subsidized "new" tenants or would you rather continue to have the current tenants who pay their rents? Do a google search on this, and you will find this can be truly a nightmare from hell. Entitlement is a biatch.
$90k of your life cash savings is a lot of money. You need to have cash on hand to deal with the mishaps that happen. I know this is gross, but what happens when someone decides to try to flush their tampons down the toilet? Or not so gross, how about the one who puts gawd knows what soap in the dishwasher and they call whining that the place is being flooded? Seriously, those are examples of real life landlording, that I hate to admit are true. You need cash reserves to cover the OMG... WTF, are people really that f-ing stupid, why the hell did they do that scenario. It will happen, just because that time you did something that Karma needs to pay you back.
$90k means you could lose your down payment in matter of months. 15% would wipe that away. Add in the fact you would be eating away at monthly costs of living there, and you really need to think this through. Can you handle three months of a vacancy for one unit? What about six months? What about 3 months for one unit, but then the neighbor next door moves out a month later and you have to add in another 3 months of vacancies. You need to take care of the carpet and paint, so can you do that?
If the electrical needs to be done that means there is more that is needed. Sorry, but you don't want to be a slumlord and actually fix the issue that will cost you. You do have the money for that right?
I know many who have bought units in the south bay, and they wish they could have this deal. But... they have lost so much money by being wrong on the bottom, they can't take advantage of this. They wish they knew when the bottom was here. Too bad they didn't do the research for the south bay, as they would see here.
