New Investor! Would love some help on some basic questions!

[Account Closed]

I live in the Los Angeles county, and would love to start investing. I have some basic questions that might be stupid, but would be very beneficial to me if answered, especially from someone that invests in Los Angeles. If you could answer any of these, it would be greatly appreciated. 

1) What clauses/contingencies would you include in your four contracts (PSA for buyer, PSA for seller, assignment contract, flex option contract?

2) What are some markets that you like in the Los Angeles area?

3) What do your fix and flip closing costs usually look like, in terms of percentage of PP?

4) Where do you get your contracts from? Would you be able to share your contracts with me so I have a basis to start when speaking with my RE lawyer. 

5) How do you know if the foundation of the house is good or not before buying the property? Are there quick checks you can do? 

6) Do you call for estimates like plumbing and electrical before you sign contract and start fixing and flipping? Because what if you buy it, and you start finding these things. But then again, wouldn't it be very costly to get these different inspections before even buying the property?

7) Isn’t subject to property violating the due on sale clause? If you are taking over someone else's loan, can't the bank ask for full payment whenever it wants? 

8) What is the difference between a general contractor and a property manager and how do you pay them and your other workers such as construction workers?

9) If you go to a foreclosure auction, and you want to wholesale the property, how do you have the cash buyer actually buy it? Does he need to come to the auction?

10) Do you fix up properties if the area around it has ugly houses? Because even though the property might look nice, will people pay more for it? Or do you fix it similarly to like kind properties around the area? 

11) If you get a loan from a private lender for a fix and flip and sell the house, can you use the loan money for another house? Or do you take out a whole new loan with a whole new contract?

12) Do you usually use 100% financing when borrowing from lenders? 

13) Can you use two different loans from two different private lenders for financing one single home?

[Michael Noto]

First off welcome to BP!

6) Do you call for estimates like plumbing and electrical before you sign contract and start fixing and flipping? Because what if you buy it, and you start finding these things. But then again, wouldn't it be very costly to get these different inspections before even buying the property? Consider buying J Scott's book on estimating rehab costs.  A solid guide.

8) What is the difference between a general contractor and a property manager and how do you pay them and your other workers such as construction workers? A general contractor manages a project for you.  They manage all of the subcontractors completing all of the work and handle all of the workflow issues that come up regarding that particular project.  A property manager is a day-to-day manager of a property.

9) If you go to a foreclosure auction, and you want to wholesale the property, how do you have the cash buyer actually buy it? Does he need to come to the auction? I have never heard of a bank that will allow a foreclosure buyer assign a contract.  A double close would probably need to happen.

12) Do you usually use 100% financing when borrowing from lenders? We have never used 100% financing from a lender.  It would be nice, but it is hard to find. 

13) Can you use two different loans from two different private lenders for financing one single home? Probably not because both are likely going to want first lien position.