All Forum Posts by: Geo Cruz

@Eric R. Dehner

Rates are definitely one of the biggest reasons to buy at this time. I remember a couple years ago, people were stoked that anyone would lend them a huge amount of money for a rate below 4% and thought that was borderline stupid! Now imagine today? Money is cheap, use that to your advantage and of course be smart about it. 

For all those taking on extensive value add projects, keep in mind the recent material price increases when figuring numbers.

Because of limited supply due to Covid and fires here in SoCal, lumber has been climbing and it’s at it’s all time high, up by 75% since Spring. Concrete will be up 6-8% through end of the year possibly until Spring of 2021.

Be conservative with your renovation numbers and feel free to reach out if you would like any input on particular costs.

@Matt Devincenzo

Hi Matt, I have also heard the same about finding the right niche, specially as a new investor. Im learning that all markets will have the right opportunities depending on individual goals. 

Which civil do you work for? Im also in the commercial and multi family development industry on the GC side and understanding the clients goals is always key. I would love to connect and chat more.

@Andy Eakes

Thanks for your reply, very informative. I am currently in North County and agree with you about ADU as a tool for positive cash flow. I would love to connect! Ill shoot you a PM

@Joe Villeneuve

Having a better idea of the property condition in real time, controlling who moves in next door, maybe savings on repairs by combining primary and investment capex expenses (IE, a painter might give us a better deal painting both properties at once), really knowing tenant and planning for future lease extensions or termination.

All arguable of course.

@Theresa Harris

Yes, fees are definitely a value for the deal. I’m trying to think of intangibles also. I think the more we can put on the table on how we can help them by buying without listing, the better our opportunity of buying.

As mentioned, this could all just be an exercise on how to approach an off market buy for our future endeavors and I'm all for that. Real life experience and process is a huge value for us at this point of our REI journey.

@Kris H.

Possibly, but there's also appreciation, tax benefits and all other IRR to consider which in our area are the big drivers for long term. Cash flows are very marginal, at least starting off.

Thanks for looking Kris. I’m loving all the feedback.

@Peter Mckernan

I love that idea of possibility selling our primary and having 2 next door rentals. I agree about coming down to how good a deal we can get and ultimately it will come to that for us. I think if after weighing in cash flow, appreciation etc, it’s marginal, we might be better off elsewhere.

We will run different scenarios and take into account all pros and cons before we commit for sure.

The immediate goal for us right now is to be in a position where we have an option to buy or not without competing in the market. This could very well just be an exercise for our future endeavors on approaching off market opportunities. Thanks for your input Peter. Keep them coming!

@Joe Villeneuve

I agree that there could be many disadvantages to be a next door landlord and yes most likely if that were the case, it’s probably smart to be anonymous....but there are a few advantages as well. Thanks for your input joe. Definitely gives us more to consider when weighing all the pros and cons!

Hi guys I just want to get your advice on a potential off market investment opportunity for me and my wife. We are currently looking for our first long term investment and are networking and talking to friends and family about what we are looking for. We happen to briefly share our intent to buy with our next door neighbor and they surprisingly told us they are ready to downsize and were willing to sell to us before listing.

Of course we told them that we would be interested to look and see if we can work something out. What ideas would you guys suggest to present to them to entice them to sell to us, hopefully under market. I know this is a loaded question but in general how can we make an offer that's a win win? We will be having a more in depth conversation to learn in detail their goals and for us to share what we're looking for but in general they are downsizing and we are looking for first a BRRRR but also open to long term rental.

Our first thoughts on how this would benefit them are that we would take property as is, we would be flexible with timing for closing, we can possibly leverage my construction network for their next property. Any other ideas we can bring to add value to them and offset an offer so we can achieve the best under market buy? What do you guys think would be a good starting point for an offer?

Home is probably valued at high 600k to low 700k. Rents in the area are 3000-3500. Public record shows they had a ELOC and Cash Out 5-6 years ago for about 360k. Latest rate and term refi recorded was 2012 at 200k which has been estimated to be reconveyed but who knows. This info might all be irrelevant but just thought I would share to get a better picture of approach strategy.