Author Topic: Renting Agency in Orange County recommendation  (Read 2411 times)

bluecheeze

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Renting Agency in Orange County recommendation
« on: April 27, 2014, 11:12:02 PM »
Anyone have any reccomendations for a full service rental agency in Orange County, CA?
We live out of the area and I would like to get into the landlording game.

Also- would you rent or continue and try to sell with these numbers?

(assuming rented 11 months out of year,management fee, taxes/insurance, maint) I should be $250 cash flow positive on the house-$3000/yr.
If I continue trying to sell I might be able to net a $40k profit (dropping price substantially).  It is costing about $2500 a month at the moment.

Been on the market for 6 months and all I am getting is lowball investor offers.  I know fairly certainly I could get a rentor within a few weeks.  Thoughts?

Edit-
Read about the 1% rule, according to this I would be getting .6% (2550/428,000).  Does this mean I should just continue and try to sell?  Highest offer so far has been $490k which is a small gain.
« Last Edit: April 27, 2014, 11:18:34 PM by bluecheeze »

arebelspy

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Re: Renting Agency in Orange County recommendation
« Reply #1 on: April 28, 2014, 07:05:24 AM »
Anyone have any reccomendations for a full service rental agency in Orange County, CA?

What do you mean by "full service rental agency"?  Are you looking for a company that finds tenants?  Are you looking for a property manager?

As far as the rent versus sell, there's not enough information given for us to determine that - we'd need all of the numbers to run.
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bluecheeze

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Re: Renting Agency in Orange County recommendation
« Reply #2 on: April 28, 2014, 11:59:40 AM »
Basically I would need someone to do everything because I live out of the country.  I also plan to never return to California once I am back in the states.  So yes, property manager and someone to find tenants.

When I return I do plan on being "semi-retired" (I think you guys call it FIRE?) and my hope was to eventually be a landlord for higher end properties back in my home state so this would be a good experience for me; however, I want the numbers to decide- I don't need to pay for another expensive education.

Numbers:
428k purchase
320k mortgage @ 2% for 2.5 years, unlocks after (5yr arm), $1300/month
I should be able to get at least 500k (same exact model house that is not as upgraded as mine just went under contract today-after my post- for 500k)
Realtor fee 5.5% + other closing costs
5.5k taxes
insurance was 1k, but I was just dropped last week because they discovered my house was vacant- I hear vacant house insurance can be expensive...haven't shopped yet, I have until June 1.
House is 2 years old so maintenance and repairs are minimal if any

If I sold now for 500k, 30k realtor/closing, 320k mortgage, I would get 150k equity- a gain of about 40k over 2 years.
Reason I am questioning is because 3 years ago when the community was first built, all houses sold for about 550k,  right now it seems as the market is still in a slump-last year houses in the community were selling for 525k.  Is it worth it to hold off a year or two to recapture some big gains (as well as making a profit from renting)?
Or do you think this is a case of "pigs get fat, hogs get slaughtered"?

Let me know if you need anything else.

Appreciate the help!

sunnyca

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Re: Renting Agency in Orange County recommendation
« Reply #3 on: April 28, 2014, 12:23:05 PM »
Last year's housing bubble was pretty anomalous- it may happen again, but who knows when?  Where in Orange County is the house located?  That's a big determining factor in selling, as well, since housing prices can fluctuate based on the area. 

Sorry, no full-service recommendations though.  Wish I could help more.

Poorman

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Re: Renting Agency in Orange County recommendation
« Reply #4 on: April 28, 2014, 12:31:53 PM »
bluecheeze-
The OC market is still pretty hot in that price segment.  If you haven't gotten a solid offer yet, it means you might be priced too high or you (your agent) might not be marketing it properly.  It's rare for anything priced around $500k to be on the market longer than 30 days unless something about the pricing/marketing is wrong.  Why would a house with less upgrades than yours sell for more than your highest offer after 6 months?  Something doesn't add up.

I also think your cashflow assumptions are probably wrong.  It seems like you are expecting very little maintenance because the property is newer, but tenants are typically harder on a property than owner-occupants, so boost your maintenance assumption.  Also, you either have an HOA, or a gardener expense, or both that need to be accounted for, but I don't think you are.  Based on everything I've read, this doesn't make sense as a cashflow investment, only as a speculation on future price appreciation.  Nobody can tell you if that will happen, but you've already said prices have dropped since these units were new, and now you can't get an offer that you think is justified (indicative of a weaker market).

There are literally hundreds of entities in Orange County that can manage properties, from large companies to individual realtors.  I can't recommend any of them because I self-manage.  I will tell you that from what I've seen, the larger companies will not give good service to a small guy like yourself.  One property is nothing to them.  I've seen rentals sit vacant month after month because often times the only marketing is a small sign in front and an obscure listing on their company website.  The intitial vacancy with a large property manager might be longer than you expect and kill any prospects of cashflow, if indeed, there are any to begin with.

bluecheeze

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Re: Renting Agency in Orange County recommendation
« Reply #5 on: April 28, 2014, 01:08:46 PM »
Interesting- all the reasons that I initially always hesitate to even get into real estate...

House is actually right on the northern edge of Stanton (my street divides Anaheim and Stanton)- so its not as highly desirable an area as most of the OC- a few miles from Disney.

My cash flow assumptions:
$2,550   rent
-$1,300   mortgage
-$420   tax
-$180   rent fee
-$120   insurance
-$200   non occupant
-$100   maint
$230   total

Non occupant and maintenance would just be put in my own account until it hits 1 months rent and then I would gain that cash flow back (start taking it as profit).  If I ever drew from it I would get the account back up to the $2500 and repeat.

I assumed the renter would pay the HOA as well as all utilities?

sunnyca

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Re: Renting Agency in Orange County recommendation
« Reply #6 on: April 28, 2014, 01:23:25 PM »
Typically, the renter doesn't pay the HOA- it's usually built into the rent. 

Given the area, I think the price drop from last year is pretty reasonable.  To be honest, I'm not as familiar with that area, but I can see the prices fluctuating a bit more there compared to some of the other locations.  That being said, maybe a new realtor is in order?  Poorman might be right that your realtor may not be marketing the property properly.

bluecheeze

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Re: Renting Agency in Orange County recommendation
« Reply #7 on: April 28, 2014, 02:07:11 PM »
Kind of thinking that too about the realtor....

Side note- I was forgetting a HUGE item- California taxes.  I currently shelter all of my income from Cali because I live out of the country.  If I made any income in the state (triggering a tax return) I suspect the state would require me to pay taxes on ALL my income- that would completely blow away any and all profit and cause a huge tax liability.

May just have to sell for a little cheaper to get it off my hands ASAP.