All Forum Posts by: Edit B.

@Cody L. I agree, and I've had some marginal success that way but did not continue with it thinking that doing all that digging(on larger scale) when not knowing if the owners have any interest in selling could be a waste of time, as most owners are not looking to sell. 

However I don't like letters either, but what I really don't like is the type of letters people are sending. One guy sent me a red notice of a potential fine on my property, and I needed to call asap. It took a couple of good looks to find that it was not from the county. Called the dude, and he had some weird automated answering service asking if I'm interested in selling. Blew my mind. Blew my mind even more so that some people respond to that. Then come the "I want your house" letters, which are ridiculous as well. But the thing is, this stuff doesn't work on me or you, but I'm far from the type of person that would sell my house this way, and a specific audience really responds to these, which is where the results come from. Its a similar thing in radio, some of the **** I hear on the commercials are so ridiculous that I cant imagine anyone going for it, but..wrong again.

With that being said, I'm still giving letters a shot- I wrote some code that runs through lists, customizes the letter based on each property. It will mention the property detail or two, it will be hand signed, and it will use good quality letters and envelopes. I had decent success using this on MFs, trying it on SF now and much larger volume, will see how well it works in a hot market

I think best long term plan is building a strong online presence and marketing 

@Cody L. Where do you find phone numbers for owners of properties you're interested in?

@Joshua Wright can you elaborate on the DST. Did a bit of research and it looks like a trust you can essentially invest your tax deffered profit into. Can you get your money out of there at any point and invest in real estate, or will you have to pay the tax?

Here's the thing- I don't quite understand the argument of using comps. The comps were build years ago and most of them renovated years ago, so naturally they will have older standards in there, and from my understanding carpet was big until not too long ago. So what I'm seeing is a lot of carpet, but when looking at flips, which are kind of hard to find on line, I see a mixture of both laminate and carpet possibly leaning more towards laminate. 

What are your thoughts on bedroom flooring for flips in range of 330-375k in Sacramento? I'm getting some mixed opinions- one realtor so far has recommended laminate over carpet, although admittingly they are close, another agent and interior designer recommended carpet strictly over laminate or any other flooring that is not hard wood.

Right now I have wood tile plank through kitchen and living, as well as corridors that lead to rooms. I feel that putting another style wood laminate there might not go well with the flow of the house and carpet will potentially look better, on the other hand I don't like carpet and feel that most buyers may prefer laminate.

**Edit: Not sure how to edit the type on in the title but should say Flips and Flooring

Any 1031 exchange success stories in today's markets?  If so, what strategy did you use to best safeguard your profits considering the small time frame (45 days to identify a property)?

I've read things like look at multiple markets, or include a 1031 contingency whens selling. I get the multiple markets as a cooler market would potentially be easier to find a better deal in, but the contingency on the sellers side doesn't make sense to me. If i'm selling with a 1031 contingency, what kind of buyer would perform inspection and appraisal, while there is a 1031 contingency and potentially lose that money. If they don't perform them, and are just waiting, then they are not really in contract due to their own contingency(inspection, appraisal). 

Any thoughts welcome

@Wes Blackwell thanks for the input. I decided to go with wood plank long tile in living and kitchen and LVP in other areas. It'll give me the durability and higher end look I need 

@Eric M. sure, you could be right, but to say it'll be fine because of past performance is a fallacy. 

Today's US is not 1980s or 1990s US. You can develop tech and provide services from almost any remote location that has a decent talent pool. There's more competition between cities, and the result is higher mobility. People can move around more freely if they face growing pressure within their home state, especially if its in locations that provide other perks such as better weather. If Chicago's financial situation and property tax hikes outpace its growth and performance, the result is increased financial pressure on the population via higher rent or mortgage costs, which will impact all, but the poor first and most. To a small degree(and small subset of people) I believe this has been a contributing factor for leaving the state, but on average the positive impact of general growth in the past has outweighed the tax hikes which is why you still have seen rising home prices. I think the large recent hikes may have shifted that dynamic too far negative, and we will see the impact of that in the years to come.

Here's one study showing recent rents have declined nearly 15% in one year(maybe due to a declining lower income population?): https://www.zumper.com/blog/2018/06/mapping-chicago-neighborhood-rent-prices-summer-2018/

I lived in Chicago and moved to Sacramento years ago. I can give you my take as well as other investors on why we have never, or recently stopped investing there. 

I live in CA where prop taxes are roughly 1.2% and can only raise by max of 2% each year if prop values increase. As an investor I can run my numbers and make a sound decision on the investment knowing that my costs will be relatively fixed with time. Homeowners can do the same.

In Chicago, I would have to run the numbers, and not only have an already rediculously high tax cost  but I would also have a complete unknown variable in my long term projections as Chicago has a track record of increasing taxes and is not currently financially stable. To me 99% of the time thats an unnacceptable risk, as an investor and even as a homewoner. If I wanted to purchase a high risk investment I’d invest in stock. People invest in real estate because of the stability and calculated risk. We are also discussing unknown risk in Chicago, which in my opinion is not comparable to the west coast or many other sunny belt state outlooks on population growth, appreciation, job growth, and other factors. 

As a home owner I have my dad who is looking at retirement, has paid off his house which is worth about 290k yet still pays about 7k in taxes a year. More than double what I pay on one of my props worth about 400k. So as a homeowner I would be hesitant to buy in Chicago knowing that even after I pay my home off I will have a significant tax bourden which continues to rise. These facts in my opinion are enough to deter many from investing or purchasingg in Chi, eapecially now thatthey have more options for better employment in other growing cities

I'm currently renovating a house that I plan to sell within 1-5 years. This is not exactly a "flip" because I will be renting it meanwhile, but I do need to look at it from a flip perspective considering I am planning on selling near term.

House is 1050 sq feet which is on the very low end of houses in neighborhood. Current ARV is around 320-340k. If appreciation continues in Sac, I estimate I will be selling above 380-400k price point.

I tore up the carpet and found hardwood in the bedrooms and living room. The kitchen did not have hardwood(had some wood particle board). Due to the fact that the hardwood is not in the best shape, and the fact that we made some small layout changes I don't think keeping the original hardwood would play out well at the 400k price point, so I plan on doing some flooring. 

The place is only about 1100 square feet. I tore down a half wall between kitchen and living room which looked terrible and now I basically have an open layout(rectangular shape 13.5' x 30'). I have a few choices here;

1.) WPC - Entire house ($2.10 per square foot, 6.5mm decent quality) 

- This will cost a straight 2100 for material and about 1000 installation for a total $3100

2.) Engineered Hardwood - Entire house ( $4/sq foot) 

- $4000(wood cost) + $1000 installation  = $5000

3.) Engineered Hardwood & Carpet ($4/sq foot) - Living,kitchen and hallways(500sq ft) will be hardwood &.  bedrooms will be carpet.

- This will cost roughly $2000(500 sq foot hardwood material) + $500(hardwood install - 500sq foot @ $1/sq ft) + $800 (carpet & install on 500sq feet) = $3300 

What do you guys think of these choices? I see a lot of properties being built with carpets in bedrooms these days, but am unsure if I want to break the flow of the house to put hardwood as opposed to entire house in WPC. 

Below are some pics to get feel of outside the property as well as the sort of narrow open layout between kitchen and living.