All Forum Posts by: David Herrera

My fellow Borrowers, the question has been asked over and over again, what protections do we have against foreclosure? We all saw the Emergency Rules of California Rules of Court, dated April 6, 2020 stays all judicial proceedings to foreclose a mortgage or deed of trust, including any action for a deficiency.These rules will remain in effect until 90 days after the Governor declares that the state of emergency related to the COVID-19 pandemic is lifted, or until amended or repealed by the Judicial Counsel.

Now, there is emergency bill AB 828 which is pending but what it will do is enforce a moratorium on foreclosures. This applies to all judicial and non-judicial foreclosures. YES. That's right, you read it correctly. =) 

In summary, no judicial foreclosure proceeding may be commenced, nor may nonjudicial foreclosure sales occur, until 15 days after the applicable Emergency Rule and shelter in place orders expire. Even though it is still pending so not fully enacted yet, I have experienced first hand what the mere existence of this bill does to aid a borrower facing non-judicial foreclosure. No title company will insure the sale of a foreclosed property to a subsequent buyer knowing this bill is out there, since questions could be raised as to whether it was conducted in a climate that either chilled the bidding process or perhaps violated social distancing. Stay up to date with this Bill and keep pushing through to the other side!

https://leginfo.legislature.ca.gov/faces/billStatusClient.xhtml?bill_id=201920200AB828

Investment Info:

Single-family residence fix & flip investment in San Jose.

Purchase price: $640,000
Cash invested: $825,540
Sale price: $1,730,000

Existing single family home purchased with approved plans to tear down and build a New 4 bed 3.5 bath 2,500 sqft single family home. Home was initially purchased as a package deal with 462 Hull Ave, and was pre-sold to a retail buyer before completion

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

Up and coming area on the outskirts of Inner Willow Glen

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

FSBO on Zillow - Purchased from the original developer who got plans approved

How did you finance this deal?

Hard Money & Private Money

How did you add value to the deal?

Project Managed, customized the two homes finish features to cater more to the end buyer. Contemporize the look while keeping cost of construction below $200 Per Square Foot

What was the outcome?

Sold for $350,000 over what the appraiser originally appraised it at when we purchased the project.

Hi Joyce, this was on Hull ave, the last street that keeps you in the willow glen neighborhood/willow glen school districts. This sale definitely pushed the envelope for price point in that area. When I purchased originally the appraiser had a hard time giving an ARV of 1.35 million, but I knew people were going to continue getting pushed out of the inner more prestigious (and more expensive) willow glen streets and would ultimately push this area of willow glen up in value.

I have completed a couple of new builds in this exact area and in surrounding areas as well, and while I do think there are good profit margins to be made and a lower entry price to get you there, it ultimately depends on what your exit strategy would be. Can you tell me a little bit more about what investment strategy or strategies you have been looking to implement? 

Investment Info:

Single-family residence fix & flip investment in San Jose.

Purchase price: $640,000
Cash invested: $875,000
Sale price: $1,792,000

New Construction Project Purchased, Built and sold for a profit by my company, DMJ Home Solutions, LLC
This project was sold pre-completion and off market for over asking price

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

Old town willow glen was an up and coming area of willow glen that had not yet seen the crazy spikes of high priced homes
This purchase opportunity was further enticing because it was available with approved plans from another developer.

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

I was searching Zillow for FSBO

How did you finance this deal?

Hard Money Lender in 1st lien and private money lenders in 2nd lien

How did you add value to the deal?

This was a new construction project

What was the outcome?

18% Net ROI