All Forum Posts by: Gabriel Graumann

@Michal Shain ben harosh I'm very sorry to hear about you experience. Moving forward though use this as a learning experience so you never have to learn the lesson again. Whether you receive the referral or offer of services from BP, a relative, a client, etc., verify verify verify. Best read as do your due diligence on all potential vendors well before agreeing to hire them for the job regardless of the size. Request 5 references for jobs completed in the past 1-180 days, then actually call the list of references. Schedule a time to go view their work on other jobs to determine quality. Ask and confirm all of the basics like insurance, license and bond. Check accredited sources like BBB or trade associations. If all of these things check out, then you talk over the contract for the work to be performed and the draw schedule. This should be based on a scope of work and partial payment following completion and sign-off on specific tasks.

Never pay up front money with a contractor you have't successfully worked with numerous times before, and even then, upfront costs would be limited to material and permitting required to start the project. Easy way around this with a new vendor is that you directly pay and schedule deliver of materials to the job site, not give the money to the vendor up front.

If you follow the above the risk and probability of a vendor stealing from you goes close to zero percent. I don't mean to preach to you while experiencing such a bad outcome, but it never ceases to amzae me how many people get into investing in real estate and/or they take on a project without having a game plan in place to protect the very funds they are trying to turn into wealth. Spending the extra time to perform all of this due diligence on the front end will save you hundreds of thousands or more in the long term. It also helps weed out the average and below average vendors from the great ones who have great systems. If a vendor cannot or won't provide you with the above info move on, you don't want them anyway!!!

@Gaurav Malhotra Welcome to BP and the area. I've been heavily involved in the commercial and development space for 17+ years in the Seattle metro and would be happy to connect with you to discuss construction and land costs, plus help comp out the resale scenarios for you if that is helpful. Let's connect on here or you can join me tonight at the BP Meet-Up I'm hosting in Mill Creek. Search the Event tab on BP to find the meet-up scheduled for tonight, it's the only one and has all of the details.

Gabe

@Devin Waugh I've worked with several on both traditional sale, wholesale deals, and simultaneous closings for fix/flip projects. I'd happily recommend Curtis, Casteel & Palmer Law & Escrow. They have a few offices just north of Seattle. Used them for at least 30-40 transactions in the past 4 years, and our team has used them for 200+ in that same period and they are great about educating people throughout the process. Joshua Curtis is strong real estate attorney that can craft unique docs as well if that is something you need.

Another good option is Chicago Title & Escrow. Numerous offices nationwide wide including Seattle, Lynnwood, and Everett. I have used Debbie Cobb's team and Katie Brazel's team each on numerous transactions as well and they will go out of their way to assist you with anything you need.

Hope this helps get you pointed in the right direct. FYI, I have no relationship with either of these groups, they were referred to me several years ago and I started using each about 4 years ago and they've both done an excellent job for me.

Welcome @Alexander Grinberg to the BP community. If you haven't already found it, under the networking tab you'll see an icon for "Events" which will have Meet Up's posted including one in north Seattle this coming Wednesday. May be too far from where you're at in Tacoma, especially with all of the traffic we get around here, but if not and you have the time feel free to join us and it's a great way to connect with fellow BP members. 

@Prasad Gupta You have several options to address wetlands in relation to developing all or a portion of the property. I'm equally curious as I live in Mill Creek, and I was born and raised in Bothell, so I know the area well. Very few medium to high density parcels exist of that size without wetlands of some kind, so if it's a listed property I believe I know the one and could speak to you about it outside of this thread. However, here are a few thoughts to consider that other members in the state may know or find helpful.

1. 1. What is the intended use of the land? You need to determine this as it will dictate some of the guidelines you'll need to follow in terms of density, setbacks, mitigation expenses, etc. You can look up the property in using the county website to determine the zoning if you aren't already familiar with it.
2. 2. Critical area survey? If the seller hasn't performed a critical area survey or wetland delineation, this would be something you need to perform as part of the feasibility process. The results of this will answer numerous future questions and lays the ground work for your engineering designs and the county requirements. NOTE: If this site is zoned for limited single-family residences, such as 1 unit per acre, and large scale upside isn't an option, then you may want to start with a less expense property walk with a biologist would can provide initial thoughts without a formal report. You can accomplish this for $400-500 instead of several thousand for the formal reports mentioned above.
3. 3. What type of wetlands are present? The above reports will define what type of wetlands exist (category 1,2,3 & 4) and each type has different requirements of preservation. Cat 1 is the least restricted & cat 4 being the most restrictive. Knowing what you have will dictate what you can do.
4. 4. Anything is possible....at a PRICE. I say anything is possible as I've watched developments IN BOTHELL that have effectively dried out and built on top of marsh lands, which are a category 4 and the most restrictive. This was possible only because the developer was willing to pay mitigation fees and buy land banking credits for a wetland offsite in the state. Too much to get into for your question, but suffice to say it's very expensive and only pencils when a development has large economies of scale, you have deep pockets (think tens to hundreds of thousands just buying the credits), lots of time (think years) to hold the property, and development experience.

In summary, I would share that if you are serious contemplating any property for the purposes of multi-lot development, you need to get education on all elements of the development process, create your team of vendors who will be performing the various aspects of the process, understanding the true timeline of events, and understand that development is a LONG process in our state and most others for that matter. Happy to connect if you'd like to discuss it more since we are located in the same area. Hope this helps.

@Account Closed "Worth it" is subjective to each person's own goals, talents, time and tenacity. There are ways to get into real estate without much money, but the process is sped up if you do have some money.

Not sure if you have a "day job" and this is a supplement as you referenced convincing your husband and two friends. Perhaps one of you should pursue being a real estate broker, which would provide an avenue for revenue (commissions from transactions) and would also put you in a position to sell your own properties if the intention is to fix & flip, which would allow for controlled sales costs. It would could also provide a good education by learning the real estate brokerage business, which would assist in comping deals, having access to more data, and making connections with more people in the industry. Of course, you could also outsource this part of the business by partnering with a rock star broker who's willing to work with a new investor without much money of their own, depending what you're bringing to the table in terms of value.

Door knocking, writing letters is free, checking public records, and networking are all free beyond the inevitable time, energy, gas and postage costs that are associated with the effort. Perhaps find another investor further along who has systems in place in your area and see how you can assist them in building their business, and you get the education and system training as part of the deal, and negotiate a percentage of the deal at closing as you find them for the investor. 

@Julian Acosta Great question and I have part of the answer for you. The balance is subjective to your loan situation and what is allowed in your loan docs.

Certain loans do not allow a transfer of ownership into a new name without paying off the loan balance. A few may allow a transfer of buyers interest into a LLC if the borrower is the sole signer and 100% owner of the entity. However, it's rare as the entity member could then sell the entity to a new party and thus remove their personal liability to any past debts, which is why most loans have an "acceleration" or "due on sale" clause that would prevent the transfer. Basically, review your loan documents and see if a transfer is permitted.

Out of curiosity, why not simply rent it out while keeping the property in your name? Despite some messages to the contrary, an LLC does not limit liability as much as most people expect. While I'm by no means an attorney, of which you should consult for advise, my experience and in talking with numerous real estate attorneys if you have a property in an LLC and you get sued, the party bringing the suit can look beyond the LLC and bring suit against you personally or the controlling members. An LLC can help, but it doesn't guarantee full protection as you might think.

@Porter Livingston congrats on graduating and finishing your degree. What was your major and what are your employment prospects and goals?  

As for investing and house hacking, there are plenty of ways to get started with little money, but some will be needed if you’re not former military and you intend to personally occupy the home. How’s your credit? Do you have an income/job already or is that search on to? The best financing options (as in lowest rates, fees, terms) go to those who have great credit, 2 years verifiable income, and a low debt to income ratio among other factors.

You have the most important part started though, the willingness and desire to learn the trade, to better understand investments. If you are a reader and really want to start off with the end in mind, grab The Millionaire Real Estate Investor by Gary Keller and Jay Papsan (is interviewed on one of the BP podcasts) and it will lay all the groundwork you need. Plenty of other good books too.

I’d be happy to connect with you, I’ve lived in Everett/Mill Creek area all my life, and I would be happy to connect you with brokers, lenders, investors and perhaps even jobs depending on your skill set and drive.

@Pushapdeep Brar If you don't find anything on the app, you may want to look into RIA meetings as they have more established groups nationwide. My experience is that BP meet-ups are stronger back east but more limited along the west coast. There are only a few in Washington so I'm attempting to start one in my own area later in the month. You may want to consider doing the same thing.

@Justin Yu Based on the current economic climate and generally low inventory, my focus the last few years has been fix & flip properties in King, Snohomish, and Skagit counties. As John mentioned, there are more risk and I haven't personally seen the value in courthouse auction properties of late, and I've been able to find properties on and off-market that fit my criteria so that's what I have used. You just need to know your numbers, experience level, neighborhoods you want to focus on, and then target specific properties and you'll uncover a deal soon enough. Despite all of the members an gurus who push "go fast, scale up" I would recommend targeting an area and keeping true to your numbers. As the money is made on the buy, finding a good value is key and not getting sucked into the "I need a deal" mentality that often pushes people past economic sense or scope of work on their reno budgets. Happy to assist as needed.