All Forum Posts by: Frank S.

LLCs without employees is a waste of time. You own the LLC, it's our personal asset. Any lawsuits against you will involve your assets, the LLC is your asset. Get an umbrella policy for 1.5M and the best insurance underwriter for your property that you can afford, go with brand names.

So, the issue is NON-PAYMENTS. Do you want to get paid?  Next.  Move on. 

 Yeah, let them do it. It's a pain to go to the store and handle returns.   Develop specifications as part of your contract, this way they can't give you cheap junk. Quality of paint, floors, windows, hardware, fixtures, etc.   Be prepared to accept equals in case of long lead times. 

Hi there, 

Good luck, we followed a similar approach here and a  lot of inspiration came from our babies, too!  They can make one do incredible things!  Like reading  books until 2:30 am or working 14 hour days while rehabbing a unit. 

We researched for two years. We had liquidity "issues" - too much cash on hand. After realizing that replacing a great W2 job with another (lower paying ) job (REI) wouldn't work, we switched to use RE to pay for part of mortgage and future college tuition for our kids. Be flexible with your goals.

First year foundations. Taxes (NOLO, Landlords), very simple RE calculations by Frank Ganelli (it's called a dumb man and women investing for a reason), 100+ podcasts (I stopped after Josh left, they are all the same), tenant management, negotiation, etc.  We do our own taxes, not to save $400,  but to get them done right.  Ok, I like to save the $400, too! 

Second year, market research.  That's the hard one, keep in mind you will have this for 20 / 30 years.  You want them near by, in good condition, and within your risk tolerance.  We made it at the tail end before the property cost skyrocketed in our selected area. 

A few notes, 

Your partner must be 100% on this idea. 

Index funds are just as fine.  RE requires less money at the expense of time and a very steep learning curve in phase two, market research.   

Personal finance education is a must before even looking at RE as a complement

BP is a fantastic site, it has a solid base.  However, you need to be careful. You will find hype, unrealistic expectations, and half-cooked advice (sure, like mine).

The BP books are so so, not great. The books are a condensed version of the forums, if that works for you, great.  Look for other sources. Stay away from RDPD nonsense.

 "No one has ever gotten rich by cash flow".  The real money is as a developer -  or by selling private data, advertising,  and many books through a blog website.  The risk of being left holding the bag after a market crash is much larger, too.  

Currently, our rental market makes no sense, I am not even looking for rental properties to buy. Well, maybe when I'm bored. 

Many times I heard the $100 a door profit target on the podcasts. I won't get out of bed for $100 a door like they advertise.

Most of our money is in broadly diversified low cost index funds with low expense ratios.

I'm back to high savings APY accounts at 3% (HM Bradley) and index funds.

I wish the absolute best to you and your family during this journey! May good fortune find you working hard!

"I  rather lose a dozen bids than buy the wrong nightmare."

Last year we picked up our home from a Craigslist ad in Northcenter.  It took the seller 4 months to realize our offer, at $200K below asking price, was fair.   That was very good luck and tons of hard work, but you never know what sticks.   The main difference is that seller was  a very kind, respectful, and honest man.  That was as important as the transaction. He lives a few blocks from my house, too. 

Good. I was starting to believe their fantasy valuation.  Thanks @Jonathan Klemm

Well, this is not going anywhere. They were very dry during our chat. The comps given were absurd, borderline dishonest. Their "friend" used mostly brick two flats as comps at $690,000 to $725,000.  They have no idea.  Of course, they thought I was nuts when valued their house at -$100,000 less than the brick two flats on the pictures. 

There may be a chance someone picks it up at a slightly higher price, but that block is not that special.

Well,  they want $680K for the lot.  They may get it if a 2M home goes there,  but I still think $620 /$630 is the actual price. I think their realtor gave them false expectations to get the listing,  but so it goes.  We'll find out in a few months. 

Thanks for the input.  We will likely fix it instead of demolishing it,  a new spec build may be outside of our budget (dear kids are expensive).  We plan on moving there permanently or living there while we rehab our home. We live near by.

I'll see if their acquaintance is willing to meet me at the house,  that's key for them to understand the expense required to hit a $660 vs $620 market price.

Thanks,

Frank

Hi there, 

I am working with a friend on a FSBO, I may buy that house. Imagine a frame house on a 4,500 lot. The house is a full gut or even a demo job.

This is located about a block from Coonley, it's a prime location, but the house needs tons of work: roofs, decks, dated baths and kitchens, HVAC heating issues, floors, paint, etc.  It's a smaller foot print house, 3 levels.  That's why I am looking at it as a borderline demo job rather than a gut job. We will probably fix it. 

I am seeing 3,100 SF lots going for $510,000 minus realtor fees ($30,600), total $480,000.  What's the upcharge for the wider lot above (4,100)?  I am estimating about $620,000 sell price "as is" minus realtor fees ($37,000), so this will land in about $580,000.  

Again, it's a friend, so I'm looking at a fair deal.  They had a realtor acquaintance that told them $660,000, that will land my price at $620,000 which will not cut it according to my calcs. I think they are off by $40K. Their friend hasn't seen the interior.

Thanks, 

Nevermind.  I'm guessing tops $2,500 to get all that junk out.