All Forum Posts by: Christopher Adams

@Kathy Henley

We have figured in HOA dues and the building doesn't allow 30 day or less rentals so that would be put in the lease.

@Amit M.

 So the unit offers 24 hour concierge service, dedicated underground parking, rooftop garden/pool, and has been earthquake retrofitted. I am aware of the average PSF and thats why I don't want to lose this deal. The owner is looking for a certain number after paying the mortgage off to retire and it's within my numbers which makes the deal work. The unit is 920SF and is on the 4th floor. It does have city views and a very small balcony. 

Thank you to all who has responded, I will be having our attorney write up an offer this weekend and will be formally going under contract next week. Now it's figuring out the big question, how do we come up with the extra money. 

Hello BP,

I need some advice, and what better place to ask then on the forums. I have an off-market condo that a customer of mine would like to sell. We were causally talking about it while working (not to mix business with pleasure), but now that the job is complete our conversations have become much more serious and I'm stuck on two different deals to offer her. 

The condo is a 2/2 in Nob Hill (very nice area in San Francisco) that needs some updating. We have both talked about a 700k sales price if we left a realtor out of it. Since I have worked in this unit, I know what upgrades it needs. Being a Project Manager, Icould renovate this condo at a very reasonable cost (15-20k). Taking into account these upgrades and current comps in the area the unit would be worth around 820k. The same size units are renting anywhere from 5-7000 dollars a month (I know; San Francisco rent is crazy!) so I have conservatively run numbers in the tune of getting $5500 a month for rent. That should leave us with almost 2k a month positive cash flow (assuming all is calculated correctly on the BP calculator). 

My question is how to approach the deal. My wife and I can not get a traditional mortgage at this price point. We have been battling two different options and don't know which way to go. The first is a 50/50 partnership with another investor. They would put up 350k for the down payment and we would finance the rest. We would then split the net rent 70/30 in their favor and retain 50/50 equity (we would pay for the remodel and act as PM) They would make 5.3% on their cash and benefit from the appreciation in the Bay Area. 

The second option is to offer an owner carry where the owner would benefit from getting a large monthly payment and defer such high capitol gains tax. We don't know much about this option though so this is where we are stuck. My gut is telling me to skip the partnership with another investor if the owner agrees to do an owner carry avoiding splitting the profits with another party. I'd really appreciate your thoughts.

I look forward to hearing what everybody thinks, and I thank you in advance!  

Hey @Erik Lindquist

for the most part I would agree with the comment below but as I just moved out of Marin county down to Silicon Valley it is a tough market up there. We offered and offered and offered just to be beat out by cash buyers sometimes 100k over our offer. Not to say there aren't deals in Marin but you need to find someone who doesn't want to list their place on the MLS and just needs to get out quick.

I feel like the whole bay area is like sharks swimming in a pool of blood, if your not the first to strike you are left hungry on the side lines. 

For areas that cost a little less look right across the bridge to Richmond or even just north to Petaluma or Santa Rosa.

Anyway welcome to BP and good luck! 

 Again thank you for the info! We are looking to flip as that is pretty much my day job. We will at some point get into buy and holds out of state (in or near our home towns) but not in the Bay. 

Just looking at your numbers we may have to start in the East Bay, yes we have cash saved and capitol at our expense but not that much LOL. 

I would love to go to some meet ups! So if anybody knows of any in Silicon Valley let me know, we'll be there for sure. 

 Thank you Jay! I guess where I'm getting confused is how much will they lend. On our personal finances we have been approved for 700K and that isn't enough to get us 1/1 condo in the area. I guess is it OK to look at 1MM homes or is that something I should discuss with a lender before we even offer? 

I will look up Dick Coker and see I could sit down and meet with him. 

Thanks again 

Welcome to BP Sean 

Hello BP,

So I have been doing a lot of reading and research on this topic and am still a little confused. I have potentially found a deal in the Bay Area that I would like to move forward on. I am looking to find a hard money lender who does at least 70% ARV loan, I do have money saved and I have access to capitol as well. Now before I write an offer do I need anything from a HML? Like a pre-qualified letter or anything of that sort? Also how long can a HML take? I haven't even reached out to one yet being we have been looking for deals. I would assume they are all different but have the same concept.

I guess any advice on this or even HML contacts in the Bay Area would be great.

Thank you,