All Forum Posts by: Jose Reyes

This is a tough one. I am also a contractor and have invested in many properties over the past 10 years. In the Los Angeles area no less. My perspective would come from a contractors point of view. 

First of all. Did they sign your construction contract? If it was outlined properly I'd suspect you'd be in the clear, but I'd still say you're in a gray area. 

I see both sides of the coin because I have lived it on both sides. The investors/partners likely only want to see a nice return on investment and would probably not even batt an eye at what the cost of the rehab was if the return was met or exceeded expectations. 

What is the current status with the property? Is it on the market? Pending? Sold? That'll shed some light on your the status of the situation. It sounds like the project is in the luxury market, and the price reductions in this market are prevalent. From the outside looking in it may appear you're the fall guy if the anticipated returns turned sideways. 

Back to the construction. I'm not sure that most people truly understand the time and cost of a large scale project really include, and how often the timeframes and cost of goods fluctuate. This is where I feel for you if it really was a break even project for you. I've been there, you've basically worked for free for several months and now the clients/partners want more, and likely because outside parties have filled their heads up with non comparable cost comparisons regarding quality of work, materials, licensed subs or just flat out lies. I know this because I've experienced this first hand.

Again, if your construction contract was outlined correctly and signed by all parties you should be good. But that's also a lot of partners at the table that are coming for you. Their must be more to the story. 

Last question. Prior to this project had you ever completed a project with these partners? Do the partners personally know one another? Are they seasoned investors? 

Have they paid you the $275k in full for the construction services? 

Best of luck...

Curious of everyones thoughts. I purchased a property and am now being offered significantly higher then my PP as-is, without doing a thing to it. Question:

Would you rather make $50k in a couple of weeks or appx $85k (maybe/probably more) in 4-5 months (rehab and resale). 

I'm not cash poor and don't have a ton of projects going on right now, but I always lean towards the quick money. I deem $50k is a lot of money. I won't have to deal with managing another project, budgets, contractors, time and building and safety depts..

Any thoughts?

Thanks 

Brian 

Count me in. I live in Covina and this would be fantastic. I've been attending Bill Tan's REI in Arcadia for over a year. But would love to join in a new one.

Please keep me posted and let me know if there is anything I can do to help. 

Thanks 

Yes. Building an investor buyer list is easy. The hard part is finding out who is actually serious and who has money. 

In Los Angeles you have a ton of investors. But finding the real investor that makes the final buying decisions and actually has the money to pull the trigger is roughly 1/10...that's my guess. 

Your easiest source to find out who is legit is contacting some hard money lenders (good hard money lenders), they have bonafide investors that have actually closed deals. The other would be to contact listing agents of homes that are currently on the market that are flipped, or have recently closed. Everyone is looking for a deal. If you have one, finding an end buyer in LA is very easy. 

Curious. This is posed to all the wholesalers and rehabbers. Do most people run a one man/women shop? Are you the marketer, deal analyzer, prospector, designer and accountant for your business? Or do any of you actually have any full or part time employees that help you with day to day operation and marketing? Have you found that hiring or building a team around you has increased your business or was it a waste of money?

I've been solo for slightly over 10 years. I've had a few fly by night "marketing assistants", but they never panned out. I have came to the conclusion that you have to pay good money for good help that will see the big picture and will stick around and know what they are doing. I have now convinced myself that I do in fact need to run my business like a business and hire someone that can do the things that I lack will power or knowledge to do myself. For me it's a marketing assistant. 

Any thoughts or advice on how to get a successful business to the next level from someone that either developed a team or bit the bullet and hired someone to push them to the next level?  

The ONLY way I know that this is possible is to locate a killer deal with a huge spread. Bring it to someone that has money and experience and negotiate a profit share with that person. It might not seem appealing to do so, but the experience will be very valuable and as stated. If the property is a great deal, the money or credit isn't an issue. Someone will jump on it. You have to walk before you run. 

Other then that, I have not met a person that has purchased, closed, rehabbed and kept 100% of the profits. If you listen to the gurus, they'll recommend upping all the limits on your credit cards, beg family for money and or sell a kidney on the black market. Anything to push you off the ledge. 

I have done 1 transaction with them. I actually wholesaled them a deal and it went smoothly. 

As far as the properties they provide...the ARV's are usually inflated. Some interesting properties but nothing amazing quite yet. They are simply another avenue for lead generation. If I can purchase 1 property a year from them I'd be happy. There service is free so you don't have anything to lose.

@Pedro Oliva if it's a great deal, try and put it under contract before it goes on the market. It makes the property much more appealing to investors, and if it hits the market and is a good deal. The agent will get bombarded with agent and investor calls and you'll wind up competing. 

Good Luck

Bubble with an eminent crash, no way. Market pricing correction? Yes. As rates rise, home prices will become more affordable to offset the spike. Credit guideline have been too tight for a melt down, people that purchased in the last few years can afford it on paper, unlike the programs that got everyone in trouble 8-10 years ago. 

But as rates do increase and the market shifts just a bit, I'll have to imagine there will be the return of creative financing. Stated deals with hefty downs I'd imagine. Something veered to the self employed borrower. Nothing near the easy credit guidelines of before though. 

As far as how I'm preparing. I'm probably the most conservative investor I know. I'll only buy deals that I cannot lose money on and have multiple exit strategies for. And in areas that I am very familiar with. I see investing as a marathon, not a sprint. If I do 4 great projects in 2015, I'll be happy. I know several investors that take on way too much and convince themselves into buying deals that were marginal and can't sleep at night when they are in process. 

Overall, I don't see any major waves is either direction coming. Just my 2 cents...

This should be interesting. I personally know people that have attended and felt the whole thing was a sales pitch to lead them into buying the next seminar. 

Each and everyone of them felt it was a ripoff and a waste of time (for the most part). And I don't think I've come across a person that has gone onto have a great career in investing after they attend. 

I've also had other lunch/coffee meetings with multiple people that want to learn the basics of the biz after they have attended the free and weekend seminars and I was told they learned more from a 1 hour meeting with me, then they did in an entire weekend from this or other similar seminars. 

I always tell them the same thing. Hands on training from a local active investor is the best, always. Attend a local REI. Read BP forums for tons of info that is free and lastly seminar gurus are ONLY in it for 1 thing, MONEY.

Like someone stated in another post. The only seminar I'd pay for is specific marketing techniques in my local market.