All Forum Posts by: Josh Gorokhovsky

Hi Melanie, 

A good lesson we learned several years ago was about getting properties delivered vacant. If you intend on managing a building or buying a building that is coming vacant as a part of escrow, double check that it is ACTUALLY VACANT before you close or take over the units.

It seems like common sense but you'd be surprised at what agents will tell you to get you to close. Only trust your own two eyes!

We were buying a duplex in Los Angeles that was to be delivered vacant per the seller. The units were occupied by the seller and his daughter. A couple days before the close of escrow I swung by the property and saw the seller was gone from his unit but there were still belongings in the second unit. When we brought this up to the agent, he said not to worry and they are the seller's daughter, they know they have to go, and will be gone in the next day or two. 

Being inexperienced, I took his word and closed the deal. After the closing, I showed up with my crew to change the locks only to be greeted by the sellers daughter who claims she was unaware of the sale and is not leaving!

Along with all the legal action that took place, we also had to pay extra money to the seller's daughter to leave, physically move her out, and find her a new place. We did all this which took precious time and money to solve.

Needless to say we always triple check a property will be vacant before closing escrow now or hold back significant money until it is.

@david shill it makes your life a whole lot easier if you have a local apartment association you can join which usually has lots of resources such as standard leases and other helpful forms. 

Make sure to outline what belongs to you in the property, what appliances the tenant is responsible for bringing, what utilities are covered, property "rules" such as quiet time, trash, landscaping etc. Obviously when the rent is due by and when considered late, what the late fees are, and make sure you stick to your guns. Document EVERYTHING including maintenance requests, repairs, monies spent, and all tenant communication.

Lastly, insurance insurance insurance. Make sure you are covered and don't be pennywise but pound foolish just to save a few bucks. Get a good policy that covers your butt if something bad happens.

@Kirk Zandier no it was through a mutual family friend so a little different than most

Exactly! That's what I'm leaning towards @Blake Dailey but wanted to see if anyone had a different perspective. Appreciate you.

@Kirk Zandier of course my man! Paying it forward as someone (many) has done for me. 

Yes I was fortunate to find a mentor 5 years ago and I followed a similar path to what I laid out. My first deal as one I found direct to the seller, brought it to a different investor I knew and asked to received a percentage of the back end profit as well as be involved and associated with the deal. Along with the money and experience, it also gave me some credibility with agents and investors. The mentor I met in the beginning is now a partner of mine on many deals and a life-long friend.

Hi BP Familia,

If you're reading this, I hope your families are all healthy and staying sane!

My company is getting to a deal flow point where I can no longer handle running the show myself. We are a fully integrated real estate investment and development firm so I have done everything the past 3.5 years from origination, acquisitions, construction, and asset management with the help of contractors and subcontractors.

I need to free up time to continue running the job sites under construction and increase our pipeline but do not feel I am at a place to hire someone full time just yet. Probably by the beginning of next year I can transition to that. My thinking at the moment is to bring on 2 people: a book keeper (monthly to do upkeep on accounting) and a virtual assistant. My goal is to outsource or hire the "$10/hr tasks" that I shouldn't be spending time on anymore such as:

Pipeline and Lead Generation:
- Identify potential properties to buy near existing job sites
- Project research
- Deal analysis
- Connect and message agents, investors, appraisers, attorney's and fiduciaries on Social media
- Reach out to press publications
- Contact sheets

Development and Construction:
- Contacting utility companies to remove and start service - set appointments, etc
- Contacting Los Angeles Building and Safety for documents, submissions, appointments, etc
- Get bids from vendors
- Schedule appointments with vendors and follow up

Does anyone have experience with this and what has your experience been once you've gotten to this point? What mistakes can be avoided and what are things that must happen?

Thanks in advance.

Hi BP Familia,

If you're reading this, I hope your families are all healthy and staying sane! 

My company is getting to a deal flow point where I can no longer handle running the show myself. We are a fully integrated real estate investment and development firm so I have done everything the past 3.5 years from origination, acquisitions, construction, and asset management with the help of contractors and subcontractors.

I need to free up time  to continue running the job sites under construction and increase our pipeline but do not feel I am at a place to hire someone full time just yet. Probably by the beginning of next year I can transition to that. My thinking at the moment is to bring on 2 people: a book keeper (monthly to do upkeep on accounting) and a virtual assistant. My goal is to outsource or hire the "$10/hr tasks" that I shouldn't be spending time on anymore such as:

Pipeline and Lead Generation:
- Identify potential properties to buy near existing job sites
- Project research
- Deal analysis
- Connect and message agents, investors, appraisers, attorney's and fiduciaries on Social media
- Reach out to press publications
- Contact sheets

Development and Construction:
- Contacting utility companies to remove and start service - set appointments, etc
- Contacting Los Angeles Building and Safety for documents, submissions, appointments, etc
- Get bids from vendors
- Schedule appointments with vendors and follow up

Does anyone have experience with this and what has your experience been once you've gotten to this point? What mistakes can be avoided and what are things that must happen? 

Thanks in advance.

Unfortunately Terry, just like any other sales gig, it's a numbers game. Out of 100 agents you will have your fair share of ones that never respond, say they will send you deals and never do, send you "deals" but they're really not, and ones that actually do send you deals. 

Keep following up with them, add them on social media, send them interesting articles, etc. Show them you are serious and not just another would-be investor. Unfortunately some REA have been burned one too many times or think they are too big time for new investor clients. Pay that no mind and keep doing what you're doing. Also try different approaches to see what is working better.

Things to keep in mind: What value can you provide to them to make their job easier? How can you prove you're serious? Do you sound like you've done your homework and know exactly what you're looking for? 

Hi @Kirk Zandier, 

I was in a similar situation not too long ago and I tend to agree with @Brian G. on this. I think you can go one of two ways:

1. Find a mentor or partner through networking and reduce your risk by leveraging their experience. You will need to bring them value, because if they are worth their salt, they probably have others contacting them asking for guidance too. I would find a mentor that is focusing on the asset class you would like to work on and get very intimate with the numbers and finding these types of deals. Once you come across a deal, you can offer to do it together. If they agree to this, you may be able to leverage their experience in many different ways: from less expensive lenders to less expensive contractors, timing, etc. If they don't go for the partnership, give them the deal and ask to be involved without making any money (or a small finders fee or small profit on the backend). The experience you would gain going through this would be far more valuable than the money you would make doing it on your own IMO.

2. Dive in on your first deal anyway you can. Most people have to take out hard money and I tend to agree that a flip would be the best way to grow your money faster. For flips to work it's all about timing and minimizing costs so make sure you have enough cushion in the deal you decide to pounce on for the inevitable mistakes that are made on everyone's first couple deals. Also wouldn't be a bad idea to get very intimate with your costs by having a contractor or subs give you pricing on a similar project (even if you don't really have it) before you close on the one you will actually do. 

In either scenario, you will have to get very intimate with the numbers and bake in a contingency for error (which happens and is totally part of the learning experience). Just make sure the errors are not fatal and remember taking action is better 'waiting for the right time'. 

@Nabil Suleiman can you PM or email me the address and any other info? Thank you!