Rental Property Investor · Los Angeles, CA · Member since 2015 · 29 posts · 19 votes
I'm working in commercial real estate but I'm personally looking to invest in flips (with my own proceeds and other people's money) locally here in Los Angeles, and for now, stay with what I know: homes or duplexes that buy for around $350k and sell around $550-600k. Especially keen to have a contractor partner, for obvious reasons.
Have seen ideas/presentations from hard money lenders and I wouldn't mind to hear more.
Hello and welcome to BP! I would join you but I am not in good condition plus I am 59 years old and I live in Texas. Just remember that the location you pick is real important to your profit. Have experienced and trustworthy Team members. A good inspector will help you. I found BP about 6 months ago and I am still trying to decide what to do. I got a college degree in business that emphasized real estate. That same year, in 1980, I got a broker license because my schooling made me qualify. Regardless of what I had I felt more comfortable in construction. I have been in the construction business since I was 17. My father has been in real estate for about 35 years and he taught me a little bit. I have only bought one investment property which I do not own anymore. I did a few deals for other people.
Remember to always do the numbers and try to make an inspection before you offer on it. If you are lower than the asking price of the property you bid on and make sure they understand it. Protect yourself right after you close. Get an insurance policy too. If you think I could help you please contact me through BP at any time. Good luck!
@Maggie W. At the prices you have mentioned, I'm pretty sure it is a gut out rehab, let's say gut to studs and change roofing. Probably a 500-700 2nd story addition, is that something you are imagining? If it is, I might come across some and pass it your way. Cash buying or HML?
Hey Maggie....you might look for events hosted by your local self directed IRA custodians. People with retirement accounts might finance you....just a thought.
No, it's just that my experience is in older homes, from 1888 to 1940. They always seem to need more/everything. For instance, repairing plaster rather than gut and drywall. One client's place needed a $30K new foundation. I have seen flip rehab budgets from $60k to $120k, but that was some time ago and I'm not sure if the flippers I knew were doing everything above board. I want to sleep at night and to me that means workman's comp...
In a recent deal I analyzed I couldn't get the budget to go above $60k even with $4k in foundation stabilization added, so maybe I'm being overcautious. My estimates include modest landscaping refreshes and often $10,000 in plumbing/electric, properly refinishing older tubs and sinks, not replacing with fiberglass, proper renovation of wood siding, not covering in vinyl, etc.
This is the type of rehab I am confident I can sell all day long in my market.
HML with my own cash to rehab is what I had in mind but I'm exploring all options.
Maggie Wineland I like the way you think and can grasp the full power of workers comp, most investors don't care about them. 60-120k should be substantial enough rehab budget for us to do business, that might translate to 3-4 week job. I haven't seen any spread (ARV-PP) go as far as 250k but I have seen a couple of 200k. With 70-90k rehab, there should be enough room to make ~50k on that deal. I just checked my list and the last one was PP 400 Repair 70-90 ARV 580-600.
Maggie Wineland I spoke too soon. Theres one in Alhambra pp 365 repair 120 arv 625. +400 sf addition. Checking if that one is still available, last email was sent 03/09.