All Forum Posts by: Jonathan Julian

 @Mya Toohey

Yes it is a big project for our first flip, the benefit is me and my partners have experience in finance, project management, and construction so we have a good footing.   Cash buyer is our back up plan, the issue is that I have very little experience in the wholeselling game in CA.  I am not a licensed agent/broker and have heard it is frowned upon for regular joes to wholesale here, they put a ton of rules around it -- I am giving myself until wednesday next week to get the funding secured otherwise I am going to reach out to find a cash buyer and start the uptake of navigating wholeselling in CA.  I will reach out to your contacts today -- thanks again. 

Thanks for the quick feedback Kevin, 

So, we don't have "experience" in traditional flips.  We flipped our primary residence (slowly) and our business partners have 2 rental properties -- I wonder if that will suffice.  The biggest issue is we have to close BEFORE 10/4 which is very tricky on our timeline -- otherwise the state will sell the property regardless of our transaction

Good Day BP!

My team and I have found a fantastic fix and flip that we have a very strict time line to acquire. I have been talking with my traditional financing team and they got me in touch with a hard money lender.  From my previous research, I was under the impression that hard money could finance the repairs on the property.  

As of right now,  I am being told they will only lend the hard money to the purchase price. This requires 30% down, all repair funds in cash, and reserves plus collateral on the money itself. 

We are located in the Sacramento area. The property in question does have to be completely closed by 10/4/21 -- otherwise we will lose the property and any capital in this deal to a tax deed sale. 

The property itself has an ARV of 540k on a low estimate (last sale of this model was 667k, but since then our market has cooled down and the 540k is taking an average of sales over the year for a margin of error).
We are looking to acquire the property at 315k, with 85k in necessary renovation. 

We currently have 140k in capital ready for the deal and access to slightly more if necessary, but we are worried about the hard money requirements for reserves.

What are our options? 


Thanks!

@Jacob Fussell

To address the actual question as ethics you must not have found any fruitful deals yet. The seller is paying a fee to the whole saler for the service provided of finding a buyer. Regardless of the legal side of how these transactions occur, providing a service incurs a fee.

Any service rendered makes the exchange ethical. However taking an advantage of a seller through unethical practices disqualifies any ethical argument attributed to services rendered.

It's a matter of how you are doing business not the business you are in. There are fools who pay for any service the question of whether or not they are capable of providing the service for themselves becomes moot, because they are willing to pay before seeking a way themselves.

@Paul Smythe

I've thought so too. What being an investor means is fining the niche you fit. Just as any other time those who look for a way will win.

View report

*This link comes directly from our calculators, based on information input by the member who posted.


Hello All,

This is our first out of state deal and we are looking for a little feedback.  I have talked with the agent on the listing stating the bones of this 1910 home are good, he said the wiring does not look original but that would all be stuff we determine with our inspection.  The price listed in the report is the listing price which I am not sure we would be paying.

The building is a 2 unit 2/1.  the lower level is approx 700 sqft and upper is approx 600. the 700 sqft unit is rented month to month on the lower end of market rents with a tenant who has been there for 12 years. The 600sqft unit is rented under market rent but needs light refinishing (adding cabinets to kitchen and paint).

"Some" sections of roof have been replaced.  

What other information should I be gathering for this out of state deal?

Location dependent in my opinion.  If this is on the east coast -- its fine. If this is west coast and in california, you may get more for the "curb appeal". This looks to be like every other driveway in B-C neighborhoods on the east coast. 

Until its going to cost you money (via opportunity or damage) don't replace.

With any investment there is risk -- the question is what is that tolerance you want for this property.  

Of your "all other expenses" how much of that is slated for vacancies?
Have you contacted property management in the area? what are vacancy rates in the area?  

The next question is what are your retail space rental terms? -- ie is this a net lease/triple net? when does this lease expire? what is the size of the retail space (larger retail stores are more likely to reup a lease because the time down will eat their own margins)

These are all the factors that are going to navigate you to the risk associated with this particular property. 

I know some retail investors who immediately take the lease to their retail occupant and renegotiate terms to keep them in place, or extend the lease, just for peace of mind that small piece doesn't fall out. 

I am so thankful for the ease that bigger pockets has put into my life with posts like these. 

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $335,000
Cash invested: $30,000
Sale price: $537,000

Purchased in an upcoming area, identified by reading prospectus from local governments to show planned community development in our area.