All Forum Posts by: Eric Wong

Will you be managing the contractor, taking on the project manager role or let the GC handle all supervising and construction activities? Although time and material is a great way to keep costs down, you will have to spend the additional time to supervise as a checks and balance to what the contractor/subcontractor charges for or the T&M tickets, so that they don’t end up going over the original lumps sum quote provided originally.

You can add an additional layer of protection by negotiating a NTE (Not to exceed) amount, and track all costs on a T&M basis, signed by yourself or your project manager on a daily basis.

Hope that helps!

@Joel Castaneda that’s awesome, and hope things are working out for you. Although I don’t have much capital now, keep me in mind for future if you have any potential deals. I had some family that went to CSUN, but besides that I’m not too familiar with that area.

How did you go about choosing those specific states to invest in rental property?

@Axel Meierhoefer that’s amazing, glad to hear you’ll be achieving financial independence soon! Definitely keep me posted. I’m open to hearing about all strategies, I’m all ears! Flipping is where I will start, but keeping my options open.

Financial independence is definitely a goal of mine, with many strategies to get there. Although passive income thru rental properties will be something I will pursue in the future, it just doesn’t light a fire inside me like the idea of flipping houses. I enjoy watching an old building get transformed into something new. I’ve been around ground up residential construction most of my childhood, and now in my job I’m witnessing massive high rise towers and sports stadiums get built and it’s amazing.

I’m motivated in getting the numbers right, building my team, getting into the rehab, and flipping my first property. I’m confident I’ll land my first deal this year. Let’s hope 2021 will be a good year for both of us to reach our goals!

@Joel Castaneda that’s awesome, and hope things are working out for you. Although I don’t have much capital now, keep me in mind for future if you have any potential deals. I had some family that went to CSUN, but besides that I’m not too familiar with that area.

How did you go about choosing those specific states to invest in rental property?

@Axel Meierhoefer flipping is more familiar to me, as I've witnessed, from afar, some of my clients (I work in commercial construction for a large subcontractor) and different relatives of mine having success with the strategy. Honestly, if the numbers made sense to buy and hold, then I definitely would not be opposed to that. I'm hoping that if I can get my first property at the right price, that rehabbing and renting would be another exit strategy for me if for some reason we go into a downturn here and I'm unable to sell at my predicted ARV. Being newer at this and having low funds of my own, I would have to take time to educate myself on being a landlord and using low or no money to purchase anything larger than a SFR here which seems a lot riskier (dealing with tenants, property management costs, hitting the 2% rule, the unknowns regarding eviction moratoriums).

As you mentioned, I wanted to take action and commit to this ASAP, and I knew that with the little amount of connections that I have so far, flipping would get me into this quicker than the buy and hold route. sticking to this strategy until I get comfortable before I venture into the passive income route.

@Will Barnard I will definitely ask my CPA about the S corp option...I currently work for an S corp, but don't know too much about how it works besides the fact that they get a sizeable tax break the way they structure it, including the distribution of stock to employee owners like myself within the company...I didn't realize I could use the same strategy personally for my real estate ventures, as I had assumed that this was more for bigger companies...guess I shouldn't assume things!

The only title company I know is the one I used for my first home...are they all about the same or do you have any suggestions or referrals in this area?

As for ARV's, being new at this, let me know if I'm on the right track here: SFR is a 3/2, the comps I'm using are the last 3 houses that sold within the last 6 months in the area around the same sq footage home/lot, school district. These homes are selling between $560k to $600k. I'm seeing similar homes listed for much more than just in the last month ($620k plus) but not sure if they will sell at that price.

I really appreciate the feedback! You're one of the best and I have much respect. Thanks for taking the time, I'll definitely have more questions as they come up!

@Katherine Robbins thanks for all of the great advice! I was able to find some info from the county assessor’s website(mostly tax history), and a local office contact that handles the deeds, so I’ll start there.

I've definitely looked at HML's as an option, though I'm hesitant due to the large interest and fees cutting into profits. The current market with the stay at home orders slowing down the already slow planning ing and development office before even starting construction, which makes it hard to predict timeline, especially being new at this. I understand that if the deal is good enough I'll still make money with HML, but taking the deep cut if I go over schedule would be a hard pill to swallow.

I’m hoping I’ll be able to use my home equity for the down payment, which is already a risk, being fully leveraged, and using a partner for the rehab costs.

Creating an LLC is definitely on my list of things to do! I will for sure get that squared away before I take the proverbial dive!

Thanks again! I didn’t expect a reply from Spain...the BP community really is worldwide!! Hope to visit someday.

Hello everyone, my name is Eric and I’ve trolled the forum enough and listened to enough podcasts to build up the confidence to dive into my real estate investment journey and start the new year on the right foot!

My wife and I bought our 1st personal home in 2018 in a suburb of Los Angeles county (Covina, CA) and have built up enough savings (and equity in our home) to start the ball rolling, diving into the rehab/flip side of the business.

The market here is tough to find deals, especially on the MLS, but not impossible!

I'm currently building my team and working on funding, and may have found a property or 2 (one thru MLS, and the other "driving for dollars"), and will look to combine personal cash and possibly a HELOC as a down payment for either a traditional loan or loan thru a portfolio lender.

The home I’ve found driving for dollars is currently delinquent on taxes, but that’s all I know so far. Property seems to be vacant, so my question is...What are the best options in finding the owner, and whether the property has any liens on it? Any suggestions or advice will be greatly appreciated!

Thanks for reading my long winded intro!