All Forum Posts by: Casity Kao

@Eric Thornton  Does your CPA work with a lot of real estate investors? If they did they would know that you can take up to 50k or 50% of your Solo401k balance (whichever is less) as a 5 year loan at prime plus 1% so you would not have to worry about justifying how it is used.  I would direct all your solo401k questions to someone qualified.  I would buy use the Solo401k balances to buy properties because they are correct that managing the funds from that point forward would have to be with solo401k loans if you are using it for recourse and also you lose a lot of tax benefits like depreciation investing out of a solo or self directed.   

If you want a good Solo401k that help you with the paperwork to take a loan out of your Discount Solo401k as well as any questions you might have try Justin Windham with Discount Solo401k.  If you want his contact information PM, or you can find him on Bigger Pockets as well.

@Michael Wegener I used to be a teacher although I became a real estate agent a few years removed when I was let go during the recession so I think I have a good perspective where you are coming from.  In your situation I feel you can go part-time easily as many teachers make good agents with summers off and the summer being the busiest time of year for home buying.  I would recommend that once you have built up enough business as a part-time agent to where you can support your basic expenses that would be a good time to quit.  With that being said, some people just operate better with their back against the walls, so you may feel the need to jump in and you obviously have a strong source of knowledge from your mother to help guide you to a quick start so I would not say that it's a bad decision to just jump right in.  If you jump right in make sure you have money to market heavily.  We spent about 1000 a month in marketing and committed to a plan for 12 months and that for me part-time as we have 3 young kids.  We gave it at least 6 months before changing our strategy but committing to always finding new leads is your must to succeed.

@Stephen I.  You are likely dealing with a general contractor meaning you are paying this guy to manage other contractors.  This is less work for you because they manage the deals but the difficulty is the manager now has an incentive on his structure to get more expensive labor and materials to charge you more.  Also I would not use a general contractor to manage your deals until you know what is fair market on the labor that is being charged.  We self manage the deals to control costs and will utilize of our contractors that does a significant amount of the work in the home to oversee the others.  So for example if my contractor is on site that does carpentry, tile, installation of cabinets and flooring is there all the time we will simply shoot him a text to spot check the carpet installation, roof install, plumbing or electrical so we may not have to be on site to approve another contractors work.  At the end of the job this one contractor we will typically give a bonus on how much we make on the property so he feels vested.  The more hands on you are the more efficient you can be, and as you scale you can put more systems in place but the most efficient systems involve ownership, so maybe offer to give equity in the deal in place of just paying a management fee so the general contractor has an incentive to keep the budget down.

@Zachary McGinnis When you invest turnkey you lose the opportunity to value add outside of catching market appreciation in an area. The majority of the money at that point is going to be made by the turnkey company finding you the property. Now if you don't mind smaller returns in exchange for eliminating the majority of work to get into the game then turnkey is a great way to do it especially with low cost to entry, but then again you could also invest in an REIT, syndication, NNN lease type asset. Now I may be misunderstanding your question because you may just be buying turnkey and not through a turnkey company. If that is the case, there is nothing wrong buying turnkey as long as you get a deal, because you also eliminating holding costs to get the next renter in but you also generally have more competition because now you are competing with homeowners. We buy turnkey all the time on properties but we will not buy unless numbers make sense and it is under 20% under market which generally results in us making a lot of offers, but the model is unbeatable with volume. You may have one deal go bad over time, but if you continue to the model, the numbers will always be in your favor as you increase its utilization.

@Samuel Joshua I would have your contractors give you advice also on what is your best bang for the buck on the layout.  I would probably pay your contractor to do the inspection while at the same time doing a quote and helping you with layout and you can pay him $350 which is what you would pay for an inspector and kill two birds with one stone.  I prefer a contractor to do my inspection over an inspector anyday. Your contractors have probably done enough renovations to know what type of layouts are popular and give you advice on what's in style.  I would not get an interior designer or planner unless it is a seriously high end flip because they will go over budget. They have no idea what their renovations cost they just care that it looks good.  Also a realtor with flipping experience can be helpful with layouts because they know what your end buyer wants.

@Neil Hauger  Sounds like the walls are super thin, and you need to reinsulate the walls.  What did the person who snored say when you called them?  I am not sure what other option you have because it sounds like you are being cheap about it. Is it just the snoring they complain about because I would also be concerned that if they can hear each other snoring they can hear others talking on the phone and conversations so the lack of privacy would be highly concerning to me if I was a tenant.

@Jarrett Babcock Is this a deal on the MLS? If that is the case, I doubt this deal will be around if it's as good of a deal as you say it is. What also do you mean by getting screwed over? I don' t think it will be hard to get a partner on it but you are going to have to get it under contract before others discover it.

@Matt Tobler

HUD does not care why you are offering your price, all they care about it the bottom line. I have offered 2,000 all cash than a buyer that was offering with bank financing that I knew that would not get approved and they still did not accept. Basement was flooded and they still accepted it. The only time that works is with a homeowner wanting to sell to a family. Nobody really cares if the investor makes money or not that is buying the home.

@Diane G.  Your coworkers seem to be buying houses.  Investment real estate is a whole different ball game.  If you can buy under market 10-20%, especially with something that can produce income or at least a monthly housing expense.  In California that is likely however, so you can invest out of state in a more affordable area.  Being from California myself I can tell you that if you can invest in an area where it as a break even to rent or close you absolutely should if it has the fundamentals to appreciate.  I definitely know you can make it work if you want it to, but if you don't want to do a live in flip, have roommates, convert a single into a multi, AirBNB or anything then you are out of luck.  Also if you lose your job and you don't pay rent then you are out of your home in 2 months.  If you have a mortgage you are out of housing in 6-12 months, so if just depends on how you look at the worst case scenario.

@Timothy Casallas If it is not a good investment for you, why is it a good investment for your family.  I feel I'm missing something.