Andrew Walter's Q&A

The short answer is 'no'.  L.A. City has certain requirements for re-sale (smoke detectors, low flow toilets, earthquake gas shut-off valve, water heater earthquake bracing).  But these would have been required by the bank when they sold it to you.  You simply need to state in your disclosures that you purchased the property as an REO and you never lived in it.

You can always do the work yourself.  Now obviously, you still need to do the work correctly.  I did a kitchen remodel a few years ago for only $1,500.  I was able to keep my cabinets and refinish them, add some moldings, granite (tile) counters, porceline tile floors, new dishwasher, sink, faucet, light fixtures and hardware.  It added $15,000 of value.  It took me a lot longer than a pro would have taken, but it was worth the equity.

In most areas of Southern CA, you are only going to increase your property by about $10,000-$20,000 by putting in a pool.  Most pools now cost $40,000-$50,000 or more.  You would probably do better to sell your house and buy one with a pool.

In this market you should work with a direct lender rather than a broker.  Most lenders have stricter underwriting for brokered loans than in-house since the brokered loans are where the majority of the losses (foreclsosures) have come from.

I would be happy to run comps for you, just give me your address.

Many times, it takes so long to get the short sale approved that the buyer gives up and moves on to another property.  The short sale approval has a time limit on it, usually 2-4 weeks.  If the short sale is approved, and they are looking for a new buyer, they will need to close quickly.

This is the same question that millions of Americans are asking right now.  Basically, the current value is too far below what you currently owe to qualify for any refinance right now.  So, is it better to hold on to it and wait for prices to increase, or sell it with a short sale?  Since this is an investment property, the big question shouldn't be about the current value, but about the cash flow.  Does the rent cover your costs after deductions?  If not, is the negative cash flow a burden?  If you are able to cover your costs or comfortably make up the difference, then it is doing what it is supposed to as an investment.  As with all equity investments, you need to hold them for at least 10-20 years to reap the maximum benefit.  If the cost of carrying the house has become a burden, then sell it at current market value subject to the lender approving a short sale.