All Forum Posts by: Jeff Hsieh

Thanks everyone for your comments, they're all very helpful!

@Frank Wong - As you suggested, I've responded asking for some sort of rent-back clause and deposit if they want to keep the 3 days in there. Waiting to hear back from them.

Hi,

I put in an offer for my first investment real estate deal and received a counter offer. The counter offer price is still good and works with my numbers in terms of cash flow positive, but they had some other terms in the counter offer that I wanted to run by the forum here. 

I would appreciate any feedback and thoughts on whether or not these terms are red flags.

This is in California. Property was built in 2008 and judging from pictures it looks move-in ready.

Terms:

1) Appraisal and home Inspections contingencies to be removed 12 days after acceptance.

2) Property to remain in backup status until all contingencies are removed.

3) Seller's choice for all services: Escrow, Title, NHD, and termite

4) Seller will only provide sections one of termite clearance

5)  Possession to buyers no later than 3 days after close of escrow. (currently owner-occupied)

6) Property sold As-Is, therefore, inspections and final walk through are for buyers information ONLY and NOT to be negotiated items beyond this original offer and counter offer

Thanks very much, any feedback is appreciated!

Best,

Jeff

Hi all! Thanks for your responses so far. I've updated my post above with additional information after speaking with some more contractors this weekend.

@Nicholas Leone- thanks! I received another quote for about 130k to do the project. He quoted only about 1-2k to demo the shed, instead of 15k. Sounded much more reasonable.

@Carolina Solorzano - We bought the house in 2014.  If we do this remodel, the idea is we would stay in this home for at least 5-7 more years. One of the contractors I spoke with is going to the city on Tuesday, and I asked him to speak with them for me to make sure they don't see any issues with this project.  If signs look positive, then we will probably proceed to get an architect/engineer involved to do drawings and pay for the permits.

@Vinay H.- the 220k includes upgrading a separate half bath to a full, completely moving a full bathroom (so layout isn't weird), demo'ing a shed, and then finally adding the expansion. But it definitely sounds pretty steep. I'm crossing my fingers and hoping the other quotes come back more reasonable! 

@Sherwin Gonzales- thanks! Yeah I've got 2 more contractors coming in tomorrow to provide a quote, we'll see how it goes. Thanks for your help so far!

@Travis Rasmussen- that's a great point about speaking with a local realtor. I don't imagine the $600/sqft scales linearly. Can you elaborate a bit more about it breaking even if putting a long term renter in there? If I am not financing any portion of it, I won't have any monthly payments. At most there would be some additional utilities and cleaning expenses, but that *should* be easily covered by the airbnb price based on my research of homes in my neighborhood on airbnb.

Thank you for your response @Sherwin Gonzales! I am in a similar situation as you where I do want to add value and also have a place for my out of town family/friends to stay when the visit. When friends/family are not visiting, I'd keep it open for airbnb. 

Right now we rent out 2 of the other bedrooms to friends so we have no room for guests.  If I were to do this expansion, I would forsee myself stay in this property at least 5-7 years more until we have kids and may want to consider moving to a better school district.

Do you (or anyone you know) have an idea of the amount I was quoted is reasonable? This would be my first step into any sort of renovation project and I'm having a hard time grasping reasonable costs.  And sorry, one more question, would my home have to be reappraised right after the project, and if so, would that affect my property taxes going forward?

Hi everyone,

I currently live in a 3bd/1.5ba home in South San Francisco, CA.  I'm thinking about upgrading the 0.5 bath to a full, and adding about 500 sq ft extension to the back of the house. This extended portion would be a small living area with kitchenette, a full bedroom and bathroom. I could use it as a guest room, or a private portion of the house to airbnb/rent out. I've gotten a quote from a contractor for about 220k to get everything done and I'm here to get some perspectives on whether or not the price is reasonable, and if it's worth the upgrade. I am meeting with a few more contractors this weekend, but wanted to see if I can get some thoughts here first.

A few facts:

-Assume all permits and drawings are approved by the city.

-Most homes in my neighborhood are 3bd/1ba. Am I over-upgrading my home?

-Homes here sell for about $600/sqft, so if the expansion is approx 600 sqft, then it would add 300k to value of home. Is this too optimistic?

-We have a 640 sqft shed in the back that needs to be demolished. (quoted 15k, included in the 220k full estimate)

-The 1/5 bath needs a shower, and because it's small, we need to move everything around, and also move shift the door a few inches. (quoted 27k, included in the 220k)

Please let me know if I can provide any additional details and thank you in advance for your help!

Jeff

I am also an aspiring investor living in the Bay Area, and recently from my research Pittsburg is an area that I think has great potential for cash flow properties. I'm looking to learn more about this area, and would be happy to both chat and drive out there.

Thanks,

Jeff

This is all great feedback, thanks guys!

Appreciate your response!