All Forum Posts by: Jian G.

@Dan Schweit

It’s not easy but they are still out there both Los Angeles and San Diego.

@Mindy Jensen

Ordered 2 one of my wife. Can’t wait.

We have a lot of posts on BRRRR properties but not a whole lot on buying land to build multi families . The purpose of this post is to discuss, share experiences, ideas to explore on the subject further hoping we can have a greater understanding of it. I think the reason for this is the barrier of entry is higher? we will need a team of people with experience to execute it? In major metropolitan cities like San Diego, most Class C properties are expensive and most doesn't even cash flow. I have spent the last 3-4 months analyzing deals the broker sent me and what I can find on the market. The number just doesn't make sense. I did found 2 properties that were 5 units and had a lot of upside but they were in escrow. we are focusing on acquiring 2-4 units at the moment but also playing with the idea of buying land with development opportunity and build 4-5 units. I will be going in with a friend that can execute the planning and construction. I think one of the top goal for the mayor is to solve the housing crisis in our city and build affordable housing. I think San Diego is trying to remove parking limits for new developments. (I know they are talking about it but not sure where we are at). I think I'll just list out the pros and cons and we can have an open forum for people to add comments to each area.

Pros:

1. higher the risk higher reward, whether it is building it for rental income or building it for sale, the reward is greater on the ROI than BRRRR and flips

2. It is exciting, the extensive legworks and preparation turning an idea into reality. Creative and sky is the limit. from is flat piece of dirt and turn it into nice housing that people will enjoy living there is rewarding and a sense of great accomplishment. 

3. skill building, it require many areas of expertise from start to finish. the amount of knowledge and skills one will learn is a lot more than just flips or buy and hold. from the understanding of zoning, city planning, drafting up plan with architect and engineer, approvals, documentations and financing. the list goes on and on. maybe this is as much as a cons than a pros depends on how one sees it. 

4. development low income housing, we have a housing crisis, and developer are not focusing on people with low income, they have their eyes on where the money is. dealing with state programs can be lengthy but worth the effort in my opinion if the outcome is to build something that is profitable at the same time giving family a better home/environment so their kids can thrive. I truly believe that improving a neighborhood can have a great impact on kids future. I was one of those kids are easily affected in a bad area but with the right enviorment that my parents work so hard to put me through and I became successful. At least comparing to my peers. 

5. self growth, not just skills but just like any successful business, there will be undoubtedly difficult going down this path, but the willingness to push through when things are hard, when things goes wrong, and dealing with each problem with absolute determination to solve it. we talk about a lot that its so important to get our first deal for people that observing on the side line vs actually committing on doing their first deal. same idea here, you can work for a developer for years and wait for the right moment to start your own or you can just build a team around you and just do it. d

Cons:

1. Very lengthy,  managing everything at each phase so it can move into the next phase. they say less than 50% of a project’s duration is the visible construction period on site. the essence of development typically involves pre-purchase, concept stage, purchase, town planning, working drawing and documentation, pre-construction, construction. 

2. The risk, lots of things can go wrong even with good experience developers let alone someone doing it for the first time. financing coming at the right time as needed? building issues, under budget, housing market goes down, list goes on. 

3. location, location, location, isn't that what we hard all the time, so finding a piece of land with development opportunity in the right location would require a lot of legworks and understanding of that particular market. 

4. most high demand areas doesn't have a lot of land sitting there, maybe need to buy it with a piece of property on it and do demolition. 

I hope some of you find this as an interesting topic and would love to hear your input!

@Brandon Penn

Congrats man! We have 9 right now hopefully be in contract at the end of this week for a 4 plex putting us at 13. The goal is to have 20 units in San Diego at the end of the year. We are currently looking to buy land and build 4-5 units since deals are very hard to come by.

Hi, I am looking to consolidate our pro-folio in San Diego with one small local bank and all future purchase in San Diego. I have heard that people get really great interest rate sometimes when you park your money there and have all the loan with them. We are primary in the 2-4 units space and maybe 5 units + in the future. Does anyone have any recommendations before i pick up the phone and call every single local bank lol?

@Ryan Pozzi

I would say depends on your goal and how bad and how soon you want to achieve it. I remember the earlier days of my business success I lived a pretty lavish lifestyle, although it gave me a lot of great memories but it is not sustainable and not very purposeful. Right now I try to find a balance between spending time with my family, business and REI and conscious about my spending. It really helps when you set goals and get the priorities in order. The rest will follow pretty nicely. If what you do doesn't align with your goal and it's easy to tell yourself this is not the best way to spend your time and money. Hope this helps!

@Jim K.

Haha wouldn’t say drunk but after work with a glass wine or two reading up the forum and search for topics of interest that’s usually what I do. In eastern culture, most businesses are conducted with large amount of alcohol. I see this quite a bit in San Diego too where business professionals meetup after work in breweries.

@Nicholas Baughman

Hi Nicholas, did you ever end up doing any tax deed auction properties in SoCal? We are currently in the process of bidding on a few and would love to learn a little bit more if you have done it.

@Shiloh Lundahl

$1 million is not merely enough to be wealthy or allow you to retire and live comfortably. HUD is giving low income housing to millionaires. If you assets is value at over 1 million you can still qualify for low income housing. I think the qualification have more to do with the monthly cash flow/income. Wealthy family kid go to private college and room and board can cost around $200k a year(how many kids do you have?) can you send them to private college? Can you afford have couple 80-100k cars in the driveway and a big house? I think wealthy is to have at least $5 million put to work with the minimum 10% COC return. When you have enough money working for you and being able to afford a nice house and nicer cars without being a big part of your liability, then I think I would consider wealthy. Nevertheless, welcome to the club, you are one of the 36 millionaire in the world out of 7.5 billion people. It's a great milestone!

I am not big in networking right now due to my business(non real estate related) and spending almost every second of my off hours absorbing information on apartment investing. my family and some close friends are all in REI so I talk to them a lot, we are constantly looking at deals and try to close as many good deals as we can get our hands on right now and asset management on our current properties. my recommendation is first to really ask yourself what are you willing to sacrifice to do this. allocate the time and go out and meet with people in these real estate events. Your local meet up, seminar, classes available in your area. surround yourself with the likeminded people and you will learn and grow so much faster. although I have not attend to a lot of these events, I will put more time and energy there once I accomplish my current goal, which is to acquire properties within my current niche with the funds we have and learn the skills in multifamily. so my need is not to go out and try to meet people. If you are just starting out and you don't have investors in place, go out and find people with interest in real estate and connect with them. I think that would be the first step and continune education on REI for yourself. you will get in what you put out, that is the fundamental of entrepreneurship. best of luck!