All Forum Posts by: Daniel Ryu

Hi BP

I was recently checking out LA MFs on Loopnet (to get a sense of the market) and I noticed that one was in a LAR3 Zone. I cross-checked the zoning code for R3 and it seemed like MFs in that zone didn't have a story limit.

I was looking at a 2 story / 7 unit MF and started thinking about the possibility of 'building up.'

Here's a great thread on "pop top" rehabs on BP:

http://www.biggerpockets.com/forums/522/topics/150...

Just wondering:

From a construction standpoint - is building up from 2 story to 3 story (or more) present a lot of structural challenges?

And from a permitting standpoint - Anyone in LA / OC area doing pop top rehabs for MF?

Last question: Anyone using this strategy in CA for Single Family single story residences?

I'd definitely work with someone with more experience on this strategy but just trying to get a sense for the strategy in potential areas that I might want to invest in.

Alright.. that's it. If anyone has any input, I'd love to hear it.

Thanks a bunch.

@Bill Gulley 

Thanks for the further insights about trying to secure against potential profits. Seeing a lawyer definitely sounds like great advice. 

In general, would you trust the title company to walk you through all of this?

@Bill Gulley 

I had to google Performance Trust Deed.. thanks for bringing that up. The idea of transfering property to title holding trust sounds interesting as well. Good to know you can structure it so there's no payment needed, as long as it's negotiated that way.

Thanks everyone for the input. I think it's clear that this is a valid way of creatively financing a deal, and there seems to be a lot of different ways of handling it.

@John Jackson 

Ahhh.. so that's what 'wholetailing' is...

Thanks! 

So seems like you create the agreement, take it to the title company, title company creates the mortgage for the amount of the repairs + profit split on sale.

I guess one question would be how to set an agreed upon sale price (ie. using 97% CMA as Brian mentioned)

@Brian Gibbons @Griffin Fehrs 

Great ideas for structuring the deals. When @Maxwell Lee and I were talking about scenarios, one idea that came up was having very specific, non-ambiguous terms that weren't too complicated, so I like your suggestions.

Learn something new everyday on BP ^^

@Tyler Treadway 

Yeah... This is actually someone else's idea but I was thinking the same thing. How to protect the investment?

I thought.. maybe:

1) Transfer the title in your name and give the owner a LIEN (or NOTE?) for the agreed upon amount.

OR 

2) Would you as the person paying for rehabber be able to get a LIEN against the property (mechanic's lien?)?

So sounds like at least one other person things it's an idea worth exploring.

Thanks for commenting.

Hi BP..

Just wanted to see what people thought of this idea:

Problem - Out of state investor OR someone who has a different primary resident wants to sell home but has deferred maintenance to the tune of 30 or 40K. 

OWNER doesn't want to go through the hassles of a flip to get full market value due to lack of experience or other reason.  

YOU don't have funds to purchase of the house. 

YOU think the house is worth 140K as is. YOU think after rehab, it could be worth 220K. 

YOU suggest - YOU will pay for rehab and sell house for the owner. 

YOU and OWNER agree that after sale, you will split proceeds like this:

OWNER will receive first 140K. Then YOU will receive cost of repair for flip + 10K. After that, whatever is left, you split 60/40 in OWNER's favor. 

Pro: OWNER is guaranteed a minimum amount for house + the opportunity to make more

Pro: YOU can get the benefits of a flip with a lot less out of pocket money. 

Anyone ever do a deal like this?

Is this a good type of deal structure? 

And to protect your investment as the one paying for the rehab, what about asking the OWNER to place title of house in your name in return for a LIEN against property for the first 140K in the OWNERS name? 

If anyone has input, I'd like to hear it. 

@William Byers 

@Maxwell Lee 

Yeap.. That was the problem. I used an VPN and was able to download the PDF. Thanks!

@William Byers 

That would be awesome. I just tried again and not working. Thanks!

@William Byers 

By the way, that link isn't working right now... any ideas?

@William Byers 

Thanks for this resource! As part of a partnership that invests in Jacksonville / Murray Hill, we're currently putting together more materials to demonstrate what we like about investing in the area so this will definitely help!

@Aaron T. 

Good info on the Tampa area. Thanks.