All Forum Posts by: Jay Orlauski

WOW!! thank you to everyone who attended - I was so excited to host this event  - I'd like to give a HUGE shout out to all the speakers - I got such great feedback from everyone - they loved all the great information that was shared. 

@Al Williamson - thank you so much for stepping up and kicking us off for the day - also your afternoon presentation was spot on! 

I can't wait to put on next years event! 

An extra special thanks to : 

@Brad Roltgen for being my behind the scenes support - your help made a big difference - 

I would also like to give a big thanks to @J. Martin for putting on his excellent summit in Oakland and inspiring me to bring it to Fresno, as well as all the great advice you had for me. 

thank you everyone - until  next year - join us at our weekly meetup group !!!!

I know of a couple of attorneys here in Fresno that I know and trust. PM me and I will share their info with you. One of them is speaking this weekend at our 1st Annual Central Valley Investors Summit on Saturday , Sep 16th

@Account Closed yo 100K wold probably go a lot farther in Fresno than SF - you cold purchase some multifamily properties in Fresno  and get closer 5-7% cap rate - I just spoke to an investor today who purchased 9 units for 60K and I have a feeling that he is going to do a lot better than 7% - the key is to seek out  off-market properties through some kind of marketing campaign and being consistent   - let me know if I can help you with anything in the Fresno market

@Johnny Hoang - I'm looking forward to it! - don't forget about the summit - centralvalleysummit.com - I'll be there ;)

Fresno is still a great market for BRRRR - however, it's going to require a marketing campaign of some sort as all the low hanging fruit is gone . But the relatively low cost of homes in the Fresno market compared to the coast, and with rising rents - still present great investment opportunities if you can get something under contract at the right price. PM me and I'd be happy to update you when anything within your search parameters comes across my desk.

Hi Mike - Welcome to BP - and congrats and taking steps towards your first deal. I often find myself uncomfortable with free work or services too. Sometimes when close friends and family member provides me a service - especially if its their profession, they will tell me "not to worry about it"  or something to that extent - I have a  family of in-laws that cover a wide variety of local services that come in very handy on many occasions and I value our family relationship as well as their expertise - So regardless of what they offer - I always compensate them with something -  even if it is not their full company rate- I still put cash in their pocket and make sure to let them know that I appreciate what they do and pay them anyway. Out of politeness - they often protest and tell me not to worry about it - but I insist and they usually never refuse it twice. 

My point is - that even though he has offered it to you - you can still pay him and simply let him know that even though he is willing to do it for free - that you value his important time and that you want him to get paid for it. Accept all the help he has to offer when it comes to evaluating deals and finding good cash flowing properties - try to learn from the analysis that he does so you can get better at doing it yourself - then reward him by paying him to manage them - remind him that he's not going to want to manage them for free when you have 20+ properties - so you need to start getting used to paying for property management unless you plan to learn to manage on your own - which may not be a bad idea so that if you do pay a PM - you know what you are getting and what they should be doing.  Take this opportunity to learn from him and let him know how much you value his services and you wouldn't make him do it for free - if the deal doesn't cash flow without free PM then it is likely not a very good deal anyway. 

I don't think that paying him will sour the relationship at all - and if he is earning money from all the properties he finds you then then he automatically has an incentive to keep finding deals for you.  When you show him that you respect his time, are willing to learn from him, and always take care of him , you will achieve all the goals that you are trying to achieve and should keep your friendship intact. The friends and family members I call upon always respond quickly because I never take advantage of our relationship and always take care of them.  

Hi Ben - great questions - I start with a basic set of parameters that are typical for my investment area .. if I like what I see - I do a little more digging. I avoid analysis paralysis by understanding that I am loading up the expenses as more of a "just in case" scenario. If a deal just looks "OK" I will still play with the numbers to see what my break even point is and what would have to happen to get there - if there are too many red flags then I walk away - there are still many other factors that I will look at such as location, age of property, type of property , local comps, ARV , potential add-ons and other factors that would affect the cashflow and/or resell value.

On this particular subject property - it appears that everything is brand new which is one of the reasons I didn't add more for the Cap x - but I understand the importance of building it into numbers. Tenant moveouts are partially covered by repair & maintenance. I am aware of the PMI for life with FHA mortgages , which is one of the reasons I try to avoid FHA myself. He does not indicate if this will be FHA or Conventional though.
 

 Overall - I like to see more than $100 / door in cash flow - I don't put a lot of stock into cap rates as it really more of comparison ratio of one property to another - it's the cash flow I like to see and I want to be sure it is making more for me than a (totally ) passive investment  - I have to go - I am heading up our weekly meetup group today and need to head over to the meeting space - It was great sharing with you all .. I look forward to more engaging dialog. 

@ben - the Capx I used is the $166 /month which is $2000 / year labeled ( repairs & Maintanance) - probably doesn't cover snow removal and what not -I use it mainly as a way to account for a $2,000 repair bill once a year. I did not use a manager in this case because he is living in one of the units - if he rented out all 4 units , I would add management and the numbers would be different obviously. I used the local ( Fresno) vacancy rate of 5% which came from the last U.S census bureau - you're right about the taxes though I missed that one and used my own local taxes - I should have took note of that better - I usually try to make deals look worse on paper and if they look too good , I will start to undermine it with heavy expenses and higher vacancies - just because , I would rather be pleasantly surprised than to have a bad surprise. Other factors these numbers do not account for is the PMI that will be due until there is 20% equity in the property - and also doesn't account for special conditions like flood insurance if required or other local taxes. These are the numbers I run to see if the property is worth looking into further. If they pencil out here - then I will do a much deeper analysis and due diligence on the property. I hope this was helpful.

This is what I came up with 

From what I can tell - we have a pretty strong rental market here. From $550 for 1 bed in the tower district to $1200 for homes in Clovis - properties do not stay vacant for very long- in fact , I was at my flip the other day and people pulled over to ask if it was going to be for rent - when I told them that we were fixing and flipping the property - they asked if I had any OTHER properties to rent to them .. I have never had issues renting out properties here - and the property managers I know have waiting lists  - also rents have gone up over the last few years - so I would be comfortable saying that we have pretty solid rental market here in Fresno.