All Forum Posts by: Jonathan Orr

I need help. My fridge went out in my rental in Los Angeles and I am looking for a place I can get a new refrigerator and stove. It is a higher end property so I am not looking to go cheap but rather get quality appliances. Anyone know of a place in Southern California? If they deliver that would be a plus. Thanks.

@Christopher Winkler Appreciate the info.  I will take that into account.  The notes are from a lender I connected with.  These notes are bank originated, in his pool he has performing and non performing notes.  

I want to target performing notes and monitor them if for any reason one to go non performing to start the forclosure process to make sure I would be able to take title (if it ever came to that).  

As for the evaluating, can you recommend or pass along any underwriting that I could use to financially evaluate.

Again, appreciate the help.

Originally posted by @Tim G.:

Originally posted by @Jonathan Orr:

@Tim G. I recently worked with an investor who was thinking of a very similar thing.  She had a home in SF and wanted to get out of it because they felt that it was at the top of its market and felt she could 1031 into a much larger property outside of CA.

It really depends what you want to upgrade to.  If you wanting to get into commercial (retail, MF, hotels, office, etc...) then the only way you can take something down is to go out of state.  That is, unless the property is a couple million.

I worked with brokers in areas that I have done deals in the past with and also did alot of searching on loopnet for a multi family property for the investor.  We found a 32 unit deal just outside of Chicago that is cash flowing nicely for her. Reason we went with Chicago is she likes the area and a friend who lives there recommended we look in the area. After investigating it actually turned out to be a good area for investing.

If you are looking for commercial it really is where not to invest rather than where to invest. Yes there are places like Texas that are more recession proof than somewhere like New York but just remember that you can surround yourself with a team to help you even if it is across the country.

Just in my opinion I would avoid the following if you do not specifically live there or do alot of deasl in the market:

Houston

Memphis

Parts of Florida

The New England States

To each his own, just my opinion from what I have done in the past.  Just remember that if you find a deal you like, make sure the numbers work and do your homework on the area.  You can use a multitude of people like local Brokers, PM companies and local investor (BP is a great place to find them) to help you.  The safest way is to not do it yourself but to surround yourself with pros in the area to help solidify your decision.  It is not a overnight thing to find that hidden gem, it can take time. 

Good Luck!

Thanks for the input. Could you share the figures on the SF home sale and what they moved into. Purchase price, gross rents and net income? Thanks!

Sale Price SF Home :$750k

$350k equity (syndicated remaining portion of equity)

Acquired: $1.35 million 32 units (70% LTV Fannie Mae Loan 30 yr fixed)

$25,000 gross rents per month

12% Annualized ROI Year 1 with a rent increase model over 5 years.

@Tim G. I recently worked with an investor who was thinking of a very similar thing.  She had a home in SF and wanted to get out of it because they felt that it was at the top of its market and felt she could 1031 into a much larger property outside of CA.

It really depends what you want to upgrade to.  If you wanting to get into commercial (retail, MF, hotels, office, etc...) then the only way you can take something down is to go out of state.  That is, unless the property is a couple million.

I worked with brokers in areas that I have done deals in the past with and also did alot of searching on loopnet for a multi family property for the investor.  We found a 32 unit deal just outside of Chicago that is cash flowing nicely for her. Reason we went with Chicago is she likes the area and a friend who lives there recommended we look in the area. After investigating it actually turned out to be a good area for investing.

If you are looking for commercial it really is where not to invest rather than where to invest. Yes there are places like Texas that are more recession proof than somewhere like New York but just remember that you can surround yourself with a team to help you even if it is across the country.

Just in my opinion I would avoid the following if you do not specifically live there or do alot of deasl in the market:

Houston

Memphis

Parts of Florida

The New England States

To each his own, just my opinion from what I have done in the past.  Just remember that if you find a deal you like, make sure the numbers work and do your homework on the area.  You can use a multitude of people like local Brokers, PM companies and local investor (BP is a great place to find them) to help you.  The safest way is to not do it yourself but to surround yourself with pros in the area to help solidify your decision.  It is not a overnight thing to find that hidden gem, it can take time. 

Good Luck!

Hey BP community

I recently was introduced to an opportunity for purchasing performing and non performing notes (1st and 2nd position).  I have little knowledge about it and wanted to know if anyone had good advice of what to look for when evaluating whether it would be a good financial decision or not.

Also, if anyone has recommendations of possibly any excel underwriting or pro forma for it for purchasing notes that would be huge help.

Thanks! 

-Jonathan

Originally posted by @Account Closed:

@Vaden Hoffman No problem, glad it helped.  You always want to work it out with lawyers on these things.  I always like to remind myself that one wrong ignorant move can alter my livelihood. 

@Jonathan Orr You are correct sir you need an address for Nevada LLC as well. Not sure about Delaware but in Nevada, you can get registered agent service to get around that, I believe. Unless they changed the law.

Yea, we used a Registered Agent. I know my attorney was looking at Nevada but the tax implications when we sell was much worse than DE. I guess long story short that CA will charge you the same regardless of LLC filing (so they can take our money).

@J Scott and @Rob Harris are correct.  Any city or municipality will require the work be performed by licensed professionals.  This is because of the risk of if you have unlicensed people building it and something happens to a person living in it, the city is at risk of being sued along with the builder/developer for allowing the project to happen.  

You can run the project and be the developer and sub out everything from architecture to plumbers to tile guys etc... that is what I do with my developments.  However I do find it easier and more time efficent if I run point on the project and am the decision maker and let a GC take care of the construction.  Yes it does cost more but it will save you time and potentially money in the long run.

Additionally a bank won't lend for a new build with no license.

@Vaden Hoffman You should be fine to use a out of state LLC as long as the LLC has a state address where you file it. Also remember just because it is out of state, it still needs to be approved as a out of state LLC for CA.

Just recently I purchased a property in IL and used a DE LLC because it was a syndication. We created it through our attorney and then had it approved in IL.

I think you will be fine, however I am not an attorney and please consult your local attorney for confirmation.

Also, if I am not mistaken even if the LLC is outside of CA but doing business in CA you will still have to pay that $800

Welcome @Mark Hamrock I am also in Orange County and focusing in multi family and commercial real estate (mostly ground up development).  If you ever want to grab coffee, let me know.

Hey BP Community

I have been searching for more REIA and meetup groups that focus in commercial properties or at least have people involved in the commercial side of Real Estate. I have not attended many meetups due to being busy with projects, however I want to make it a focus to get out more into the community in Los Angeles and Orange County. Also the few events I have attended were almost solely people involved in SFR. With that being said I am involved in SFR but would like to focus more on multifamily and commercial real estate.

My goal would be to find groups in Southern California that has either a commercial focus or has a good mix of people to network and develop relationships with. Focusing my business in commercial development I find it difficult

Any recommendations would be great! Thanks!