All Forum Posts by: Jan H.

First I thought it was a joke...kept reading and was waiting for the part where the author would say "it is a fictional story"...lol One can't be so naive to do such a deal, no way!! You're extremely lucky to tell this tale without losing a lot... The good news is that you have BP, but you have a lot of "catching up" to do!

Our legal system is screwed up, letting people do thing like this. I guess my bad tenant experience was a 'walk in the park' compared to horror stories people have... What angered me the most was that there are legal organizations and actual lawyers are out there who educate bad tenants how to fight evictions and work the system. I am having a court hearing on the 20th following an eviction proceeding where my ex-tenants moved our before eviction trial. I am already getting ready to be amazed by our great legal system again...;)

I think you better off getting separate coverage for each property that provides sufficient protection for liability. If you create one LLC for ALL properties, you expose all of your assets even if something happens with one. Unless you want to create an LLC for each property, but that can be costly.

@Juan Diaz, great insight, thank you for your ideas.

One thing is not clear though: You are saying that  if you're building 2000 sqf at $250/sqf, you have a great deal at the sale price of $400k? Would it not cost $500k just to build it? Am I missing something?

Question for you developers: does the $250/sqf figure include all plans, permitting, infrastructure-related cost (water, sewer, utilities etc.), building? Or is this figure just a construction cost?

I know a few smaller developers who buy old homes on the peninsula, demo them and build a new custom home. They make a killing on them, but could never figure out how to raise $1.5M-$2M to play in that game. Emphasis on 'couldn't ' as now I am figuring it out...;)

I doubt you can find anything in the BA with positive cash flow, at least not in SF...

I think most investors do not invest for cash flow, but for appreciation. To me that is a very risky business, just as we had already seen in the late 2000s. I wonder how investors make the numbers work in the SF Bay, I know a few that flip high-end homes with great margins. As far as rentals, I am not really sure....

Hi Rob,

How funny, my office is in San Leandro. Yeah, Mountain House is nice, but getting out of control again. De ja vu 2004-2005 with bidding wars, pre-collapse patterns. Lol

I think your thinking is right, the central calley and Sac may be good areas to look at, I recently started to look too. Done rehab in Sac, not in Stockton and Modesto. My rentals are in Stockton. Been talking to a few out in these areas, the competition for flipping is fierce. Many guys with big time cash, most deals do not have a lot of cash in them. I'll let you know if I find anything, planning to go to the court auction soon to check things out...

I doubt you could find a flip candidate in the Bay Area on MLS, unless it's a demo/rebuild.

Most rehabbers use wholesalers who have creative methods for finding the diamonds in the rough. Other avenue is courthouse auction if you have a lot of cash.

If it walks like a duck, quacks like a duck...guess what! It's a duck! I do think too that there is a pattern with such tenants and you have to be careful. Just because they pay on time, doesn't mean anything. If they don't they will get evicted and they know it. Do not lower your rent, you will loose control of them and will be looking ahead of more 'bad smell'. You treated them fairly so far, so just call them bluff! I would raise the rent and remove the disposal as some already suggested. Good luck!

I am working with a very knowledgable gentleman who lives in the Tracy area. He owns rentals and has been a great resource for me. Very solid. His office is in Stockton though, but we have been interacting via email and phone.

If you want to connect with him, pls let me know.

I am in a similar scenario.

Currently I have a single ember LLC (me) that I am planning to use to flip houses. One of my friends would contribute capital (same amount as me) and I would do most of the work. (Acquisition, managing the rehab, managing the sale, etc.). We will use contractors and an RE agent who will get compensated for services performed.

Basically we both would be 50% in the deal financially , both of us would agree to do (or not do) a deal and split profits 60/40.

Option 1. I become the manager of the LLC and he will be a member. Both individuals provide a loan to the LLC and receive interest for a fixed term while the LLC is using the money for flipping. Profits get divided 60/40. I get 60 for doing all the work and he gets 40.

Option 2. I leave the LLC as is (single member-only me) and we would have an agreement that he loans the money to the LLC in exchange for 40% of profits on the deals. Of course everything would be transparent, and both parties would have access to all financial details (expenses, profits, etc).

Anyone has any suggestions on what the best way doing this?