All Forum Posts by: Ben McMahon

@Wayne Brooks

What type of work needs to be done on the property?  Referrals are always going to be the best option.  It's really easy for a lousy contractor to look good online and a good contractor to look lousy.  That being said, if your network out there isn't giving you much there are other ways.  If you are visiting the property than I would go to the local hardware store and ask the manager who he would use.  I can guarantee he has a guy.  Even one of the old timer employees would be great.  If you need a painter, I would go to sherwin Williams or one of the other local paint stores.  IF you need a roofer than go to ABC supply.  You get the idea.

Find the local supply place for the guy.  You might even get a few recommended and than just vet those ones.  If you aren't going to be in person throughout the project, vetting might be good done remotely anyway.  It's a trial run on what type of communications you will receive.  Hope that helps.  I've hired people all over the country.  It works.  

I've purchased a number of stinky houses.  Most of the smell is going to be in the floor.  Animals and perhaps humans deficating and peeing in corners.  Best thing to do is to pull up the carpet or whatever is there and paint the subfloor.  So far it's worked every time.  The paint will keep the stink in the plywood below from coming through.  Hope that helps.

Investment Info:

Condo fix & flip investment.

Purchase price: $3,250,000

OceanFront property located a few houses down from beacons beach access point. This house was in its original condition when we bought it. So everything was from the early 80s. Owners were having a hard time selling for market value because of a loft over the kitchen put the kitchen ceiling height at 7ft. When price dropped to 4Million, we went in at 3.25 and they accepted it. One hour later another contract came in at 3.85. Put in 650k and listed for 5.99mil

What made you interested in investing in this type of deal?

My team is very good at Luxury Remodels, and I see a lot of other investors afraid of higher end properties. Mostly because of the barrier to entry is several million dollars.

How did you find this deal and how did you negotiate it?

A real estate agent connection. He was the listing agent and told us the owner was ready to play ball. So when the price dropped, we were ready to launch.

How did you finance this deal?

Hard Money and Private Investors.

How did you add value to the deal?

Total gut job and renovation. added a bathroom or two, glass loft with glass flooring, huge openings to the oceanfront and a lot more.

What was the outcome?

TBD on the sale, just listed it. But if all goes well, we should make 2million dollars.

Lessons learned? Challenges?

Biggest Challenge was dealing with the HOA. They hassled us every step of the way. Including restricting anything on the exterior.

Investment Info:

Condo fix & flip investment.

Purchase price: $3,250,000

OceanFront property located a few houses down from beacons beach access point. This house was in its original condition when we bought it. So everything was from the early 80s. Owners were having a hard time selling for market value because of a loft over the kitchen put the kitchen ceiling height at 7ft. When price dropped to 4Million, we went in at 3.25 and they accepted it. One hour later another contract came in at 3.85. The owner was furious and tried to get out of the contract but couldn't. We put in about 650k and listed it for 5.99mil

What made you interested in investing in this type of deal?

My team is very good at Luxury Remodels, and I see a lot of other investors afraid of higher end properties. Mostly because of the barrier to entry is several million dollars.

How did you find this deal and how did you negotiate it?

A real estate agent connection. He was the listing agent and told us the owner was ready to play ball. So when the price dropped, we were ready to launch.

How did you finance this deal?

Hard Money and Private Investors.

How did you add value to the deal?

Total gut job and renovation. added a bathroom or two, glass loft with glass flooring, huge openings to the oceanfront and a lot more.

What was the outcome?

TBD on the sale, just listed it. But if all goes well, we should make 2million dollars.

Lessons learned? Challenges?

Biggest Challenge was dealing with the HOA. They hassled us every step of the way. Including restricting anything on the exterior.

@Deborah Brancheau. Welcome!  

@Lauren L Pokladnik

Hey Lauren, we actually run into this type situation pretty often in San Diego, and seen people do it different ways.  I wouldn't dare advise on a tax strategy, but as far as the building itself goes, it will probably depend on what your goals are.  Big construction projects take a lot of time and money, but can also be super lucrative if done right.    Happy to chat.  Just send me a DM

@Jose Solorzano

Let me know how that goes.  I am a General Contractor, and we do a lot of ADUs.  I am in the middle of my own land development deal and will be looking for a good lender very soon.  

Michael,

You have really come to the right place for this.  Bigger Pockets has the answer to every question you could ever dream up.  I have been investing in real estate since 2009 and I still use it to fill in the gaps of my understanding.  There are a lot of ways to do it, and it's worth spending a little time on learning especially since it's a huge investment. 

I have 2 thoughts for you since you are starting from scratch.

1) find someone you trust that is currently doing what you want to do and flush it out with them.  

2)You should know pretty quick whether real estate is your flavor or it isn't.  IF not, don't waste any time and find another road to riches.  If it is your flavor, don't waste any time and get after it!!!  It's a fun ride.  

@Alex Sinunu

As someone who has used private money a number of times, I feel qualified to speak to that.  100k in CA doesnt get you very far as I am sure you know.  If I am looking for private money that I am looking to get something fully funded.  That being said, you still got options.  

Hard money lenders typically are going to covering 75%-85% of say a fix and flip.  There are a lot of situations where the remaining balance needs to be covered.  So finding someone who needs a bridge loan is a good option.  You can typically get a higher rate on that money.  The risk is also higher as you would be essentially taking second position.  But I would imagine you could probably be somewhere in the 15%-20% range.  Which is pretty killer.  Someone else might be able to say exactly what the going rate is at this moment.

I didn't read the other replies to this, but im sure people have mentioned looking in different markets as well as teaming up with other investors.  DM if you want to chat more.  Hope that helps.

Hey @Lindsay Bowman

I am a GC in San Diego and am building a lot of ADUs right now.  Go ahead and Private message me and we can link up.  We are pretty dialed in on this.