All Forum Posts by: Allan Glass

Hi @Jose Reyes ,

You don't need a variance you need to see if you can do a lot split.  

First, most things are possible with enough effort and/or money to lobby your efforts.  However, many possibilities become "no go's" because the effort outpaces the financial benefits.

I'd suggest you review with a zoning consultant to see if you'd meet the minimum lot size requirements, if the two separate buildings can accommodate the appropriate set backs, and what it would cost to install new utility services (sewer, water, gas, electric) to the new separate lot before you get too far down the line.

Oh yes... and don't forget you will need to find the appropriate amount of off street parking to meet the current building codes.

Best of luck

Allan

@Paul Ortiz because you're in Anaheim, I'll assume you're talking about a lot in an urban/suburban neighborhood vs. rural area.

If correct, the question is not whether you can build on it, but how much you can build on it and how much time, money and effort it will take you to get approved plans.  It would be a rare instance that the city would prefer a vacant economically unproductive (low to now property tax) lot in an infill location.

However, as the guys above pointed out you need to check with zoning laws to see what you can build "as of right."  Once you've done that you'll know if you can just pull permits and build a house or, if you'll need to go through a more involved variance process with the city to get an exception to the current zoning laws.  This is where a deal can fall apart and what seems like a "decently" priced lot can become severely overpriced.

An example would be if it would take you 2+ years to get approvals, requiring you to spend money on attorneys and consultants who would argue your case for a variance with city officials and neighborhood groups driving your land costs past a point where you could build a financially viable home.

In Los Angeles we see this on hillside lots.  Land seems cheap, but due to restrictions on hillsides or zoning laws that require minimum lot sizes the cost to get approvals to build and restrictions on size of home that can be built render the land virtually worthless.

Good Luck!

Allan

West Adams - 90016.  It started in the early 2000's.

@Emerson Miranda I've never seen anything you wholesale, so my comment is less an observation about you, and more about the wholesale market in general.

My guess is that your experience / responses are less about you and more about the underwriting.  Many deals we see from wholesalers have inflated values, under estimated renovation costs and occasionally include multiple wholesale fees that can reach 10-15% over the contract price.

We, and our partners, would buy deals in LA with a 10% ROI, however many that are brought to us with that return expectation, turn out yielding far less once we underwrite the project internally.

My suggestion to you, if you haven't done so already, is to close, rehab and sell a few on your own.  This will do two things for you.  1) it will help you better underwrite deals, and 2) it will give you a track record.

My second guess is once you've done this and found success, you will no longer be the "wholesaler from Torrance" and become a private investor...

Best of luck out there!

Hi @Asif M. 

Well, the board clearly loves Bakersfield... my concern would be with your prospects for long term appreciation, which is often harder to achieve in the tertiary/outlying markets.

Based on your answers above, you've also ruled out most commercial (if you don't want all your eggs in one basket) and partnerships / JV's. This leaves you squarely in the SFR and small multifamily arena, unless you take @Jay Hinrichs advice and place you capital in private loans.  If you did your yields would be better, but of course you would have no shared appreciation.

Since you've put the 3hr limit on distance from LA, a preference for appreciation (I assume over yearly cash flow) and noted you're handy I'd suggest looking into a emerging B or C market in LA.  I'd find a fixer that no longer fits the needs of the market and resolve the problem.

An example would be finding a small 1 bedroom SFR or a duplex that has singles or 1 bedroom units and add square footage and/or beds and baths to make it more "rentable". Again, you're interest in a long play leads me to believe you'll both, find better chance for appreciation and have more time to be hands on with your property due to it's proximity to your home.

Best of luck.  Keep us posted on what you decide.

A

Before we get ahead of ourselves....

@Asif M. - No HOA rules out Condos and most townhomes.

1) I assume SFR is something you'd consider, would you also consider commercial?

2) how much time do you want to allocate towards active management of the property?

3) are you handy? or do you have trusted resources handymen, contractors you can rely on?

4) what is an acceptable return on your money on an annual basis?

5) do you intend to leverage your $200k? if so, how far

6) would you consider a passive role in the real estate investment?  (eg. you put up part of the money, someone else deals with managing the real estate you get a preferred return)

7) would you feel comfortable if your equity was part of a group of investors who pooled their equity together to buy a larger real estate investment, again taking a passive role in the ownership group, 

Look forward to your answers.

Best,

A

Hi  @Account Closed  , I would like to see what you have too.

I'd suggest you get yourself a blue book

thanks for the link @Karen Margrave

@Joshua McGinnis I'm specifically looking for active spec builders on the westside. I'm in the planning stages with my architect and deciding how big to build, which amenities to add / leave out.

I'm hoping to talk with someone who's gone to market, recently sold, etc to get some current market feedback.