All Forum Posts by: Aron D.

Truly inspirational man!  Thanks for sharing.  I have been in the rent and flip arena for 10 years and haven't stepped foot into wholesale, but will look into it more seriously.  You took action and are being rewarded for your hard work and efforts. 

You could cash flow if you got into the market around 2009-2012.  After that time period, the market took off and hasn't looked back.  I still see a few investors getting deals, but they are mostly gut the house to the studs jobs.  Lots of areas are seeing revitalization as people aren't willing to commute 2-3 hours out of their day.  I am sure the market has teams of investors that pool money and get the deals funneled to them without even hitting the market.  San Diego for me is buy and hold and other markets are flip or flop.  I know some people that are renting their living rooms for $500-$700 a month since the housing shortage is so severe.  San Diego isn't just 1.3 million people, but includes close to 3 million Mexicans from TJ.  The more that I visit San Diego, the more international the residents become.  CA fees and environmental regulations keep prices high. 

You can try all sorts of funding (hard money loans, 0% credit cards, business lines of credit, home equity, etc.).  The main thing to consider is can you pay the debt service while the house is under renovation and while it sits on the market/escrow.  Once you get cashed out at close, then everything is fine.  It is a double edged sword where it offers more flexibility and leverage, but at the same time is equivalent with playing with fire.  You can get burned if anything goes sideways with your deal.

Auction.com is just trying to get a commission from the seller (bank). They will actually call you if you are not even in the ballpark of the reserve. I bid on a couple of properties on the website for what I thought the property was worth and someone kept bidding it up. I find out later it is auction.com that bids it up in hopes that you meet the banks reserve price. I got a phone call from them once telling me I was the only one bidding and the reserve was 3-4x my bid. I told them I couldn’t even sell the property fixed up for the amount of the banks reserve. Later after 6-12 attempts of them trying to auction it off, my realtor let me know the property was assigned to him with the same ridiculous reserve. Eventually he convinced the bank to reduce by 50% and I still low balled them. They countered and I accepted. The point is that you might have to wait a while before you get the property at the price you want to pay.

No way around it. Pay now or pay later. All you have to do is check the box that you broke even. In the end, CA will get their money.

New York and CA are perfect examples of more demand than supply.  It is another story for the Midwest.  Invest where everyone is moving to and job growth.  In addition, these markets are getting cash infusions from foreign investment.  The key thing is to look at historical prices and above all knowing your market.  Your analysis might indicate a few outliers that could be worth researching.  The families I know in NY invested back in the 70s.  Imagine the appreciation since that time.  Also like Llewelyn stated, you can always wait on the sidelines and keep observing while others are taking action. 

Originally posted by @Brian Bandas:

So that's the very abbreviated version of my first flip! Bought for $55k, reno and carry costs of about $30k, sold for $110k.

Walked with $25k and the confidence to do another... which I'm closing on the day after tomorrow!

 Thanks for sharing your story!  On a deal like this I probably would only net $15k.  I use realtors, pay closing costs, and also the CA 3 1/3% sales tax.  Glad it didn't go sideways on you. 

I always put the following in my rental ads to avoid people wasting my time.  "Must have 3X monthly rent in pre-tax income and a 650+ credit score"  In addition, I have the applicants pay the $30-$40 fee to have me use the following website
"https://biggerpockets.mysmartmove.com/" to screen their credit.  It takes longer to rent units, but I would rather reduce the headaches of getting someone that will either trash the place or not be able to pay.

Originally posted by @Account Closed:

I'm with your DAD!   Prices are terrible.   EVEN SAM ZELL says so.  Its time to sell not buy!

All this funny Fed money floating around is just distorting things.    Can you explain the stock market rising with no wage growth, no inflation, etc.    I surely cant.

Someone paid $700,000 a room for a Waikiki Hotel recently-  its absolutely not make sense.

It is most likely foreign investors that bought up the property.  We sold a condo on Oahu 2 years ago and it was a Chinese investor.  They are parking their money in U.S. assets as the foreign investors don't trust their own government's with their money.

I would trust your father's advice.  He has been through 2-3 real estate cycles.  I know of a couple families in CA and NY that have bought and held for 20-30 years and every downturn, they picked up properties.  They have healthy portfolio of properties.  I am surprised that your father hasn't shown you how to find these cherry deals.  Deals are out there, you just have to uncover them.  Work your network.  I think a good play for you would be to find multifamily zoned properties that can be fully rehabbed for value add options.  Since your father is a developer, then it should be easier to do than the average investor.  Follow his lead and put in as many low-ball offers that you can until a few get accepted. 

I would avoid investing out of state, unless you have family or friends that can look out for your best interest.  As other CA investors have mentioned, investing out of state is where CA equity goes to die.  Market is hot now since investments and job market are stable, but it is hard to predict when the next downturn will be.  If you find out the time and date, then let me know.  Look up Robert Campbell and Bruce Norris for their predictions on the market.  The problem with investing in a downturn is that most renters will have trashed credit and job market will be bad.  It takes time to wait for the appreciation to build.  Another recommendation is to look up member Swanny's story on investing in SD downturn and going from school teacher to full-time investor with apartment complexes in OH.