All Forum Posts by: Account Closed

@Karen Margrave @Jay Hinrichs

To answer Karen's Questions...

First off, what are the ages and condition of the homes in the immediate neighborhood? Are there any new homes? How big are the houses next to the lot? One story, two story? What is the make up of the neighorhood as far as who lives there? Is it an area that is in demand? -- Both homes next to the lot are 2 story spanish homes from the 20s. As are most of the homes in the neighborhood. So I'd most likely build something that is consistent with the architectual integrity of the area. Like a lot of LA, the are is a mix between young and old. But it's an area that's in high demand.

Has there ever been a house on the property? -- No. Current owner used to have an aviary on the land, but it now gone.

Are there any easements, powerlines, etc. that would affect the value of the property? Not that I know of.

How close are utilities? Close. There are homes on both sides of the lot.

What is your experience as far as business, construction, etc.? Have you ever managed any type of construction, remodeling project? I've done 3 flips and I have a great contractor. I have a really good sense of what he costs for most things in the sense of a flip (new kitchen, new roof, new paint, ect), but I've never had a project built from the ground up.

The only idea I have on what new construction costs is the quote my insurance company gave me for a rebuild of my 3200 sq ft home if it were lost due to a fire: $570K.

@Jay Hinrichs The land isn't on the market - But I know the owner and he's "thinking" of selling. He's "thinking" around the $200K range. I don't know if this is a bargain, or a total fantasy on his part.

I've done a couple of flips, but I don't know much at all about buying land and building on it from scratch.

Just came across a potential opportunity to purchase about an 10,000 sq ft of land in LA County. The idea would be to build a home on it to sell. However, this seems like it could be terribly costly and not profitable. I am unsure of what goes into brand new construction, such as creating a brand new residential address, hooking up power lines, water, waste, ect -

In the area where the land is, a 1600-2000 Sq ft house will sell between $660-710K -- 2000-2500 sq ft between $700k-750k -- 2500-3500 sq ft and up will sell for 750K-950K. The freshly remodeled homes are on the higher end of those numbers of course.

And - As far as construction loans, what do these look like in the sense of structure?

Thanks for your advice!

While researching prop 13, I came across an article that suggests one can avoid tax reassessment in California with a commercial property. Can anyone shed some light? Oh, here's the article. http://closetheloophole.com/history

I'm doing some research on the difference between home values in historic VS non-historic districts. I've found some great info such as this -http://sohosandiego.org/histdistricts/historicvalues.pdf -

Does anyone have similar data? Thx!

@Will Barnard - That's awesome info. The 70% formula I've been using has many more steps than yours. Great to know!

@Will Barnard - Wow. What an interesting and simple formula. I've yet to come across something so to the point.

How much does this allot for HML fees, agent fees, other soft costs and profit?

And yet again... Thanks!

@Will Barnard - Thank you so much :) - Would you mind loostely telling me how you got those numbers? I was at around 70%. Wondering what I'm missing here.

@Will Barnard Hey there! The HML I've been talking to is Aztec Financial. Do you know of them? Happy to speak with someone else if you have someone you like. As far as the dual agency thing, thanks so much for the advice. Do you think it would be good for me to have my family agent represent me? I understand the savings/prospect aspect in not having an agent, but I also want to be protected.

Long story short - I was put in contact of the owner of a very, very dilapidated home (in Los Angeles). The home has been vacant for years and the person who'd lived in the house previously was a hoarder. The family is aware that the home needs a lot of work. I told the owner I can close fast and I'd like to buy the home.

A week later the family real estate agent called and said they'd be interested in selling "as is" for cash. They are wrapping up some internal legal issues and will be ready to sell within a month.

My current situation is that I have around 170k of my own cash to work with, but I'll need an HML for the rest. I have one lined up. Numbers wise, I'm estimating it'll be around 3-350k to acquire + another 100k for rehab. ARV in the 580-600k range.

My questions -

* Ideally I'd like to have the HML cover the home acquisition, and then use my cash cover the rehab and holding costs. Wondering at what point to tell the agent that I'll be using an HML? I figure that if I sent the HML all the home/area info asap and have them do their due diligence sooner than later, it'll be a smoother transaction?

* Also - The sellers family agent hinted at a dual agency situation. I have an agent in my family that I trust and am very comfortable with, and I'd hate to not use him. But I can also imagine that a dual agency situation might even get me a better deal?

Thoughts?

Thanks so much for your time and expertise!