All Forum Posts by: John Giang

thank you @Dmitriy Fomichenko

@Peter Mckernan correct, the 200k was my part of the investment. My partner invested another $300k for the build. the house was from the foundation up and we kept part of the garage and expanded with the house.  Our deal wasn't good because of the fees and the timing on this project in 2009 when the market was down.  we would have done great in this market.

your $275-$325/sqft build before inflation is about right but depending on the finishing materials you used (higher end lighting, sinks, faucets ect.) you can save some more on per sqft.

I'm looking at another new build project with high ROI on vacant lot in LA. Be good to learn about your construction loan company you used for your projects.

materials and labor increased so much that it will be very hard to make the numbers work especially with all the track builders there. If materials cost decreases and you can find a reasonable price contractor to build around $140-$150/sqft then it might work.

i would say apple valley does have higher home value, especially near the  lake area when i was building there in 2004-2008. lots of new development in 2004 and home value was high then.  There are more vacant land in hesperia and lower value homes vs apple valley and victorville.  Land value decreased significantly after crash in 2008. purchased a 10 acres lot in 2005 and lost its value. just sold it 4 months ago. Home value seems to be increasing in these areas now.  Hesperia is next door to apple valley.  

Material costs is 4 times higher now vs 2004 so it will be hard to make the numbers work.

Investment Info:

Single-family residence private money loan investment in Arcadia.

Purchase price: $645,000
Cash invested: $200,000
Sale price: $1,248,000

purchased house with partner to build 4beds, 5 baths 3,928sqft house.

What made you interested in investing in this type of deal?

brought in a partner to purchase house in Arcadia , prime location in southern California. House was old and needed a complete redo. High potential return of capital.

How did you find this deal and how did you negotiate it?

partner found this deal and agreed to build together and sell.

How did you finance this deal?

private money lender

How did you add value to the deal?

complete rebuild of old homes.

What was the outcome?

completed house after 1 year of building. lost money due to market crash in 2009.

Lessons learned? Challenges?

should have refi to get cash out and pay private lender. loan value was too high to rent so could not keep house to rent. lessons learned is to get better financing options to do these projects.

Investment Info:

Single-family residence hard money loan investment in Victorville.

Purchase price: $50,000
Cash invested: $120,000
Sale price: $180,000

purchased 9000sqft lot, build a 3beds 2 baths 1632 sqft house, completed house with certificate of occupancy in 3 months from date of permit approval. Rented out for 1 yr and sold for $180k.

What made you interested in investing in this type of deal?

vacant buildable lot and good price. build home to sell in quick amount of time.

How did you find this deal and how did you negotiate it?

found this deal from a local R.E agent, cash and quick escrow.

How did you finance this deal?

Cash from hard money lender.

How did you add value to the deal?

built a beautiful new home on a vacant lot. the first new build home in the area at that time.

What was the outcome?

completed construction and got the certificate of occupancy in 3 months from date of permit approval. Market crashed in 2007 so had to hold the house and rented it for $1k month. Held the house for 1 1/2 year then sold.

Lessons learned? Challenges?

learned to build homes more efficiently with coordination of contractors and materials preparations. worked closely with city inspectors for approvals. Should have refi to get cash out and kept the house for and rented out until now following the BRRRR methods.

Investment Info:

Single-family residence private money loan investment in Apple Valley.

Purchase price: $50,000
Cash invested: $150,000
Sale price: $360,000

bought vacant .51 acre lot, build a 1831 sqft, 4 bedroom 2 bath and sold house in 6 months.

What made you interested in investing in this type of deal?

high returns on a 4 months build. 3 months listed on market and sold for $360k.

How did you find this deal and how did you negotiate it?

found this deal from a local real estate agent. purchased the land through agent and paid in cash.

How did you finance this deal?

hard money loan

How did you add value to the deal?

build as ownder builder with my team of highly skilled contractors.

What was the outcome?

from date of permit approval to certificate of occupancy was 4 months. sold in 3 months and profited $130k after all fees.

Lessons learned? Challenges?

should have kept the house and rented out. wished i knew the BRRRR method then.