All Forum Posts by: James Letchford

@Khristopher Burford Welcome to being ‘public’ on BP. I live right in Capo Beach and invest out of state right now. I’ve learned so much on this site.

Looking forward to seeing your success unfold. 

@Brynn H. My apologies here. I have a friend (female) named Brynn. Oversight on my part.

Let me know if you I can help you in any way. I'm right around the corner from you, so we could grab a beer some time.

@Brynn H.: Welcome to the site. I'm a former Marine Infantry Officer that fell in love with San Clemente area when stationed with 1st Marines. You should be very excited that you're jumping into RE investing so early. Your ability to leverage the VA Loan will definitely speed up your success in the future. Best of luck to you and your husband.

Semper Fi.

@Mayer M. I live in California now. The U.S. Marine Corps brought my family West, but was born and raised in South Jersey. I'm from Burlington County and my wife from Gloucester County. I know the area very well.

Besides all that, I feel like South Jersey is a strong area for investment. It's not gang busters, by any means, however it's a slow, consistent growth. With Philadelphia, Delaware, and the Jersey Turnpike and 295 running right through, it leaves a lot of potential for renters.

@Mayer M. Thanks for raising this issue. I'm hoping to purchase auction properties in Gloucester County that are listed as occupied. Would you mind giving an update with what you had to do?

And if you end up kicking in the door, please video for me.

@James Masotti I followed some of @Josh Caldwell's recommendations on pushing back on the seller a bit.

As of now, we're out of contract on the property but were able to come to an agreement to proceed forward on the negotiation. The seller will be putting $3800 (the cost of the full investigation and scope of work for the remediation project) into escrow. In return, I will provide them with the report and they will get a second opinion on the project costs. Once the second opinion is returned, we can negotiate a final price. If we come to an agreement and go back into contract, my $5000 security deposit will be applied to the purchase price and the $3800 will be returned to the seller. If we can't come to a final agreement, I will receive the $3800 in escrow and they will keep my $5000 security deposit.

The truth is, although the project will be a headache, I believe it's a solid property for my portfolio. Further, I've spent so much time and effort on this investigation, it would be difficult for the seller to start over with a new buyer. It puts me in a great purchasing position.

I can keep you posted on this thread, if you'd like.

@Josh Caldwell Thanks so much for the speedy response.

On the original contract that continued to be extended, I had an inspection clause. Once we decided on going into a cash deal at the beginning of March, it was an as-is purchase.

I love your advice on my response on their threat of legal action. It's essentially what I was thinking, but wanted just a little confirmation from someone else. I also love your thought of taking this property in trust. I'm going to look into making this happen.

Once again, thanks for your thoughts here. They were hugely helpful.

In September 2017, I went under contract for a property in Southern New Jersey for $94,500. It needed $65K to give it an ARV of $200K. During my inspection period, we noticed signs of an oil spill around the tank outside. I paid an Evironmental Specialist approximately $1200 to research all the records with New Jersey Department of Environmental Protection. (This inspection was strictly an administrative evaluation of the property.) At the conclusion of the investigation, it was determined that there was "No Further Action Required" for the property.

HOWEVER, the report never referenced or noted the several water monitoring wells located on the property, so I demanded a site investigation and testing. These site investigations, coupled with soil testing and lab tests, caused several signed ammended contracts between me and the seller (which I believe is a wholesaler) over the last several months.

At the beginning of March, the seller approached me via my RE agent about my interest in a cash deal. After some back and forth, we settled on $52,500 with a closing date of Mar 30. If I didn't close by Mar 30, then I'd lose $2,500 of my $5,000 earnest money deposit.

Upon signing the cash deal contract, I employed the Environental Specialists for ($3,800) to do a full assessment and scope of work for the property. I received the project costs for full remediation of the soil and all areas effected today:  $80-90K of work will be required to remediate the subject property and neighboring property effected.

At a $52,500 sale price, this isn't a project that I can take on with a $80-90K remediation ahead. I'd rather lose the $10K or so I have into inspections, consultants, etc. than lose $80-90K on the back end. However, I told my agent that I'd be willing to assume the entire project for my earnest money deposit (which I'd lose anyway) of $5K. I truly believe that the seller has zero desire to take on a project of this magnitude. And at a $5K purchase price, this could turn into a very solid investment for me; as I'm willing to accept the headache.

Here's what I need help on:  The broker/seller brought up that they could sue me for breach of contract and the carrying costs associated until they sell the property. 

• I was originally under contract for $94,500 that was ammended several times while we continued our due diligence. The oil issue was known by the seller from onset. Can any portion of the oil issues be considered carrying costs? 
• I went under a cash contract on/around Mar 1 to close on Mar 30. I haven't closed on the property, but have found an exorbitant amount of remediation required. What are my rights to bail on this current cash contract?
• I'm assuming that the only carrying costs that I could be sued for started Mar 1. Is this a correct assumption?

Thanks for any help you can contribute.

Wow. This podcast was very informative. I'm putting one of my properties through a full renovation right now, so the concept of 100% depreciation at onset will really help me out. Further, I'm loving the BARRRR concept, too. Thank you @Amanda Han, @Brandon Hall, @Brandon Turner, and @Scott Trench. True gold.

@Cara Lonsdale - Thanks for bringing up this topic. I'm an out-of-state investor and have been trying to figure out how I can utilize a system like this for trusted contractors and, eventually, tenants.

Hopefully my reply will get this back on the forum and a discussion going.