All Forum Posts by: Andy Mirza

@Dante Devine I think we need some more details. If you are the owner of the property, how can Wells Fargo buy the home without your consent? If you are the owner of record, no one has the legal standing to sell it except for you. Who is trying to buy and who is trying to sell this property? If you acquired the property via purchasing the HOA lien at a trustee sale, there is no payoff to you since you are not a lender and there is no longer any dollar amount outstanding.

Are the previous owners still in the house? Maybe they're trying to refinance the house or sell it. If the 90 day redemption period expired (I assume that your property is in California), then the property is yours.

@Bill B. You're right. There will always be an excuse not to do something potentially unpleasant like a foreclosing action. Reminding yourself that the borrower has lived rent free is a good way to deal with the "guilt." I like to bring my kids into mental exercises like this. I'm investing to earn money to put food on the table so if someone isn't paying rent, or a mortgage payment, etc, they're taking money away from my kids and I won't have that.

Happy Holidays to you as well. 

Let us know how things go. I'd love to hear how this one ends up for you. Good luck!

Zero so far. I joined BP last summer and was absent for the last three months for various reasons. I see the incredible value of all kinds of networking and, after reading through all these posts, BP needs to be a consistent, daily part of my life. Ask me this question in a year and I'll have a much bigger number than 0 for you :)

Congrats, man! Oh, how I wish I could say the same for me! It'll take me longer to get there than I've wanted but I'll get there! Really, good for you. I can't wait to join you....

@Tiger M. 

Kudos to you and for taking that risk to buy that first pool. If you don't mind my asking, how big was that first pool you bought? (UPB, purchase price, number of notes) Did you partner with anyone or did you go it alone? Were these all NPN's or were some performing? How much did you set aside as reserves to pay for your costs?

@Bill B. I'm a newbie trying to learn all I can about notes and I'm interested in your story. Do you have an update on your NPN and how things are going?

I believe that it's a standard number that a lot of investors use to calculate the costs of additions and new builds in the area. I've seen and heard that number used so many times that I've adopted it as well. I would think that builders probably would get their costs down to $65-$85 sq ft but I'm not sure.

I'm starting to make my new farm area South Los Angeles, Watts, and Compton, California. I've noticed that a lot of investors are tearing down older, smaller houses on R-2 lots and building duplexes on them. I got a call from an agent yesterday who's trying to connect me with the seller of one of these houses. I'm running the numbers to see if a regular rehab would work but I want to keep my options open in case a duplex builder can pay more. My intent is to wholesale the deal to a builder/investor or a rehabber and learn.

The subject property is a 3 bed 1 bath, 1100 sq ft single family residence built in 1910. The agent suggested I might be able to get the house for $215k. If the property was rehabbed as a 3/1, the ARV is $285k so I'd need to get it for under $200k for the deal to make sense (depending on the necessary repairs).

As a brand new duplex, the ARV is about $550k. The new duplexes tend to be 3200-3400 sq ft. If I use $100 sq ft for construction costs, we're looking at $320k-$340k. $215k purchase price plus $320k construction = $535k total which wouldn't make sense. Should I use a lower price per square foot for a builder's construction costs? Am I not accounting for something? I'd appreciate any advice to help me evaluate these kinds of situations better.....

@Asif M. I think Riverside County will work just fine for you. Considering that you want cash flow, appreciation, middle to upper end, multifamily, and have $200k to work with, I would suggest buying 2-4 unit properties. There is a big difference in financing if you get 5 units or more. You can get a residential loan (and the lowest interest rates) for 4 units or less. You have to get a commercial loan for 5 units or more. These loans generally have a higher interest rate and a 30 year term is very uncommon. Also, commercial lenders generally like higher loan amounts ($750k+). If you want to buy a six plex for $600k, you'll have a lot harder time getting financing than for a 20 unit complex for $2 million.

Here's a link on BiggerPockets that gives advice on buying this type of product:

How to Buy a Duplex: The Ultimate Step by Step Guide

Based on what you've said so far, I think this is your best bet.

If you decide to go this route, have you decided on how you want to manage it? Managing your rentals is VERY important. People that don't manage their properties or their property managers well end up with problems that can turn ownership into a nightmare.

Walk, at that purchase price. Determine what purchase price will make sense for you. If that purchase price is not a negative number, use the report to negotiate a lower purchase price. Who says that the owner won't sell this for close to nothing? When faced with the facts, maybe he will sell it to you for $5,000 or whatever your number is. It can't hurt to try and you will never know unless you try. If he refuses, than he gets to keep his problem property and you keep your hard earned cash for the next deal.

The existing tenant will probably have to go. Someone that doesn't take care of their property probably didn't put a quality tenant in so I'd factor in eviction and vacancy costs into your numbers. Good luck!