All Forum Posts by: Jason S.

Kevin,

Was I off track? I was giving you precise Gold on how to profit from your walks and to make your walks valuable.

I have purchased homes that were leads from guys like you that I met, guys that know the area. I have seen guys like you build relationships with owners by stopping and talking to them when they visit their properties.

Knowing the neighborhood is one thing, analyzing that neighborhood and "really knowing" what is going on is what I was going to show you. You need to look underneath the surface, what an experienced investor will see on that same walk is different than what a new person sees.

Do you know every home in your area that is for sale without a sign?
Do you know all the homes that are in default?
Do you know what homes were recently fixed & flipped?

There are a thousand of these details that I will gladly walk you through in this thread if interested. But if it is not what you were looking for, then that's cool. I misunderstood.

OK. Let's walk you through this and let others chime in. I am going to address one thing at a time and we can make this thread a conversation for all.

1. You need to watch what happens to the homes that are for sale and run down. When it is bought, you watch what happens. Is it being fixed or did a family move in? The ones being fixed, you stop and talk to their workers and to the buyer - sometimes one and the same, sometimes not. When you do see the owner/buyer - you let him know you are watching the neighborhood for more deals and see if he is interested in another one.

2. When walking around, watch for out of towers or former owners that are standing around with or without realtors, out in front, discussing the property. Start up a conversation. Maybe they are selling it or renting it or whatever, but let them know you know the area and if you hear of a renter you will let them know, if they are selling let them know you know some buyers that buy with cash in the area.

3. Find a home that needs fixing, monitor what happens to it.

4. Are there any homes that have been renovated and are for sale? Look up the ones with for sale signs on Realtor websites and see if they say "fully renovated" etc. Now you know to watch that property, see if the owner stops by to check up on things, talk to him. Watch to see what it sells for.

This is all about learning your neighborhood. It is also about networking. I have bought some of my best inside track deals from guys who are local and do all of the above.

So let me know how about the above and then we can talk about what to do next.

Are you certain that the LA values have gone down far enough yet? It seems most markets have not fully corrected, yeah I know desirable parts of LA are different, but actually they're not.

The problem with non permitted work is there is a health and safety issue - this is the same with illegal second units in garages etc.

If you are aware of the illegal addition and it catches fire will your insurance pay? What if someone is hurt or killed? What if there is an earthquake or other disaster and the people inside are hurt due to lower quality not inspected construction or whatever.

I tear out all illegal additions for liability reasons, in the end, I cannot tell a judge that I did not know it was illegal nor can I say that I did not know.

I am only saying all of this because it seems from the posts some advocate leaving it etc - don't ask don't tell - - I do not.

There is a legitimate business plan behind this but it would be prudent to seek the advice of an attorney and to investigate any cases that arose around the other organizations that have previously implemented such a program.

Whether the wording is enforceable or not, most bank will not honor a conditional endorsement and you need to have a special arrangement where you verify the endorsement before the item is paid.

I believe Beneficial finance or maybe Houselhold used this idea at one time (maybe mid 1990's) where they sent out $5,000-$10,000 checks and people that cashed them had an instant second mortgage, maybe it was unsecured, but the homeowners believed it was secured by their Real property.

I have no problem buying as an REO or at the Trustee sale the same homes I built during the boom times and sold for 5 times as much.

Build it and sell it for $200K, buy it later for $45K. Good times.

As for feeling bad for the bank, think of how much love they have for you.... none.

As Rich said, it will depend on how busy you are keeping the GC.

If you are doing a single 1500 sq ft home at $60/sf * 10% = 9,000 and you are doing one home then I would imagine that would be difficult to swallow for the GC - at least in SoCal, unless you are literally funding him to simply hire out to subs and he is doing nothing else. But even driving to a job to check up on things costs a minimum of $50 in gas alone. So if he makes 40 trips for the entire job that's 40 * $50 = $2,000. Can you imagine that? and that's just gas.

On the flip side, you can hire a K&B superintendent for probably less than a $100K/year, get him his GC license, and he can manage 100+ home tracts and get dozens of homes completed every month. In this day and age I bet you can find one for <$80K/yr.

Are you doing infill or tract?

Can I see your prospectus/offering? just thought I would throw that in...

One last thought, there are a lot of GC's that would welcome regular work, maybe cut a deal with one and hire him on if you are completing enough homes. May be a lot cheaper.

Gotchya. This thread is so long I forgot about that overdraft scam mentioned. But of course that is the typical, or at least was the typical, way in which all banks handled overdraft fees. I worked at a bank (not B of A) for 10 years at one point in my life and that's how it worked. As for the issues on recordings etc, lets face it, every bank makes errors. BofA makes more because they do more business.

I do not mean to be contrary here, its just that it seems like BofA is just as bad as the others. I have seen, long ago when I was in banking, so much crazy stuff that nothing I have read here amazes me at all. Stuff just happens. Any of you know that. Think about your businesses, how many things have "just happened" to you? If nothing has ever gone wrong then good for you, but most of us know that sometimes you build the model homes and have the tract ready for its grand opening and they burn down the night before. Arson? Yes. But still. Stuff happens.

BofA is just as bad as most every bank, really I believe this, and it is hit or miss if you ever find someone that knows what they are doing.

Contractor's unfortunately are not sales professionals.

Some talk too much. Some not enough. Some are too rough and rude, other not.

I run into Realtor's, Investors, and people in all walks of life with the same issue. Maybe these guys are nervous? Maybe too much is riding on getting this job..... maybe the guy is stressed out. Or maybe he is on Meth or just drank an energy drink.

It simply seems over the top to hammer these guys for something that is seen in all social circles.

It does not matter anyway, most investors never listen and never hear anything other than what they want to hear.