All Forum Posts by: Jason Hsiao

Check the zoning ordinances for permitted use first @Theodore Renka. It'll actually give you some ideas as well.

It's apples to oranges @Matthew Crawford, holding period for development is so much longer, capital requirement is higher, more complicated than a flip. Of course developers make more because the risk factors are higher. Does it make sense for someone with no experience to get in without a trusted partner? Prob not.

What was your motivation to get your license or what do you plan to do with it @Seth Farrell?  All things equal, I'd go for where I can get the best training like @Adan Mendoza said and I have a feeling it's going to be better for someone local close to you or the area you'll be working in, those brokers are going to be more familiar with it. If you have good rapport w/ someone more remote and get the same training, by all means go for it. Ask if that broker carries E&O insurance and if they're comfortable with it, and also ask if they're part of the realtor board in the area you're working in or at least have reciprocity with said area.

Happy to meet for coffee or lunch @Tim McGarvey. I'm down in SJ area a lot. Which GC company are you at right now?

Fly out to Cali @Matthieu Benoot and I'll take you to one of our job sites and give a quick and dirty run down

If it's 20-25 years the math technically should make sense @Brad S.. People don't like to build new bc you end up having to catch up on rent you could've been collecting for 3, maybe 4 years depending on how fast you can get through the planning department. Sure you'll be able to charge a premium rent and maintenance will be lower, but in general it doesn't make sense.

40 units, let's assume $2,000/mo rent, at 36 months you've missed out on $2.88MM of rent, 48 months that's $3.84MM. This also hasn't even factored in the capital it requires to build the new property and the opportunity cost. 

I'm not familiar w/ the build cost in SAC, I assume it's higher than normal bc of spill over from Bay Area and shortage of labor, but let's say $200/sqft to build, avg unit is maybe 800 sqft? 40 units it'll cost you $6.4M in build cost along, prob another $1M in pre-construction costs like engineering, architecture, etc. Cost to acquire the land I dunno, $2M? Yeah, you can finish the math from there. You're not missing anything; the numbers typically don't make sense.

You can build, lease up, and then sell to a fund somewhere. The returns still doesn't make as much sense as fixing up an existing old building though, but hey money is money. So many people are looking for value-add multi's it's worth considering alternative strategies.

@Brendon K., you can probably look up in county assessor's records to see if the properties were transferred to his name or the entities he claim to do business in.

For partnerships, vet them thoroughly. I have some that work out great, some not so much. A quick easy way I've found is ask them about projects or when things didn't turn out as planned and what they did in those situations. You can pretty easily tell if someone is full of BS w/ that question. And yeah like what @Account Closed said, get things in writing bc people have bad memories.

@Puran Zach Grewal @Manuel Reyes @Srikanth Reddy @Eduardo Zepeda @Kurt Rieschel @Sean Walton @Olga Levin @Mark Pedroza Yall should come to this! It's gonna be jam packed with helpful info and lots of cool people to meet.

I've been able to stretch and grow my investing through partners @Caleb Coblentz so sounds like a good idea to me. Just make sure you fully vet them out and they have the right experience and skill sets. I've def have gotten involved with people that over promised and had to get myself out of a pickle before.

Not knowing all the details, the basic question you have to ask is do I like the Bay Area and how long do I plan to stay here @Steve E. If it's long term, then you'll be able to hold thru the ups and downs of the market just like w/ stocks; if you think likely you'll move in the short run, the costs of home ownership won't make sense--closing costs, mortgage, property tax etc.

BTW, if anyone tells you mortgage and property tax is essentially free bc they're tax deductible they're doing fuzzing math. You'll have to consider what your tax bracket is. They're tax deductions not dollar for dollar tax credit.

Feel free to ping me or use me as a resource. A lot of my friends are facing that same buy vs rent question.