All Forum Posts by: Alex Baev

I have a similar 1926 Spanish bungalow in LA (3bed 2 bath, 1300sqft, single level), that i just rebuilt completely, so here's my 2 cents

1. with plumbing and sewer, make sure that you insect and assess the main drain line form house to street sewer - in houses of that age, they are cast iron and are often buried under a concrete driveway. if it needs to be replaced, make sure re-pavement of driveway is accounted for

2. houses of that age have often started as 2bed 1bath and then somewhere along the way been converted to say 3/2 - mine was in the 70's. ask whoever inspecting the foundation to pay attention to the way it's laid out - variation in crawl-space hight, floor joists and different materials used for pillars that house sits on could point to an addition. flat roof over one of the bedrooms or bathrooms in an otherwise house with an attic is another sign it's been added. either way, check with the city that those additions are legal/permitted

3. termite damage and dry rot in California and Arizona is a given - in any house, especially that old. as you walk around the rooms, stop in each corner of every room and jump up a few times - if the floor is soft and even a sign of weakness, i bet you you'll have to re-drywall, remove subfloor and repair floor joists in at lest half of that room. just a simple "poking wood for termites" test from the crawl space often misses that. i like my jumping test as well

5. size and age of electrical panel - yes, but also age of main electrical wire runs is important. those are usually suspended in crawl spaces or laying on top of ceiling joists in the attic. old wire should be replaced as it's a potential fire-hazard surrounded by all the old fluffy insulation that's in old attics - speaking of fluffy insulation, i hear in some cases it could contain asbestos, so wouldn't hurt to check

fyi, just installed central air in my house and my best estimate - had 7 total - came through Costco at just under $7000 for a 3-ton Lennox system (heat and cool), all new ductwork, permit and inspections. curious as to what your HVAC bid was

Transparency and clarity of goals is one of the best ways to investing credibility. Think of Warren Buffet, who's value investing ideas have been out there for decades and he's telling people what he's doing pretty much as he's doing it, yet people think he's a genius. Yet he's just an average investor - by his own admission - who exercises incredible patience, analytical thinking and chooses to be transparent with his actions.

You're right, we only lock in a loss or profit when we sell... but, scary as it sounds, that's what's happened to my primary residence in LA right now - a place i bought 18months ago would sell for close to $200K over what i paid for it, and that's without all the rehab work i did to it to bring in into this century. Many unforeseen factors contributed to it, as the area is truly gentrifying - but $200K?!

That freaks me out on one hand, but on the other makes me want to do something productive with that kind of luck of the draw.
I don't like to bank on market appreciation, only forced appreciation

Some people teach because they need to sell you something. Others, - because they want to tickle their inherent need to streamline their thoughts and systemize their processes. Having read most of J Scott’s personal blog and following his New Construction diary here on BP, I’m fairly certain he’s the latter.

Who needs crime dramas and cable TV when you have the original Dos Equis man right here – investor, husband, father, dog owner and poker player…

- He once had an awkward moment during a negotiation, just to see how it feels
- If he were to submit an offer without a price, it would still be accepted
- The house inspectors often question him just because they find him interesting
- He has won the BP Lifetime Achievement Award, twice

Now, in all seriousness, hold that thought and don’t change the price of those books!..

What's your own primary residence story? How did you acquire it?
Did you buy it after you zoned on an investor-friendly area, or did you find a place you want to live first and then started investing in your backyard?
Have you lived there for a while, and if so have you been tempted to refinance and take out a mortgage on it to have more capital for you business?
Maybe it was a flip that you kept for yourself? If so, did you allow your business to make your usual required ROI, or did you give yourself a break?
Perhaps you're still renting, how so?

To speak for myself, I bought my current house about a year and a half ago as a major renovation - the idea being that no project is large enough, as long as the price is right. In retrospect, I bought at the very bottom of the market in my area, and even though I thought about taking out a HELOC on it, i don't anymore. In addition to forced appreciation of a renovation, the area where i live has gentrified so much that i feel it's time to sell hight and move on - but i do want to wait for a two year mark to take advantage of a long-term capital gains exemption.

What about you? Share your story.

Remember that the objective of a real estate agent is to bring both party to a closing. Period. Whatever it takes, no closing = $0 commission, and no repeat business. That's a an inherent conflict of interest, even when you're talking about a true "buyer's agent". The great ones will use subtle negotiation techniques both on you and the counter party, but the objective of those techniques is still to close the deal.

P.S. Property brothers (like all but a handful of rehab shows) are filmed entirely in Canada, either Toronto or Vancouver markets with their unique features then made look generic like "any-town USA". Toronto has been a huge seller's market for almost a decade now - expecting to crash sometime soon - Vancouver is much less so

I probably put my foot in my mouth on that one, as you are right - HML generally wouldn't want it quite so itemized, but then again it can't hurt and based on your area you are only "risking" to look over-prepared with both scenarios and actually getting a break on that criteria.

- Remember that it's a woman that always buys a home in a family. Even single guys house-shopping always look at it from a perspective "I've made enough to afford this place, but would i bring a date here?" Appeal to a woman first!

- I'd love to see a study on smell in a house and the whole air-freshner thing vs. quantifiable appeal, but being very smell-sensitive, I strongly prefer no smell at all. "Fresh" could be very subjective

- Every room or space on a property should be a "wow" of some sort, beyond what's expected - doesn't matter whether small or large wow. Like, "Wow, old beams and tall ceilings in a living room" or "Wow, cookies in this bright but small bedroom". Lead the buyer though a property and make them discover those wows on their own - from front property line to the back area of the garage

- Local educational prospects. I would look at local institutions of higher education - universities and their enrollment guidelines and goals. More people getting a degree in the area means more first-time home-byuers

- Crime reports and larger crime trends that lead to demographic shifts. Ironically, in Los Angeles - and most metropolitan areas i suspect, i've had a "fun" time education myself on local gang problem and how the recent police crackdowns on some gangs tend to shift demographics and promote overall gentrification of an area.

Great post and great way to send time with your kids. I second the idea that also teaching kids to spend and buy well is just as important.