All Forum Posts by: Juan Escarcega

@Karl B. Awesome, thanks!

@Dennis M. It’s in the mid 500’s right now, but my overall debt and credit limits are low so it can swing up relatively quickly. I have a couple people I could “borrow” finances from as well but not sure if they would co-sign.

@Karl B. I’ve given myself until June to finish renovations and have the city stuff done because it has been red flagged by the city. If I rent it, I run the risk of having to pay relocation fees. I just had the electrical permit pulled today, but I’m doing a lot of the cosmetic work myself and could use a prep guy or 2, but stucco/drywall/paint might be something I would hire out at a reasonable price. Much appreciated!

@Jason Franklin I wish I would have a year ago, but at this point it’s just a matter of pulling a few permits and getting through inspection, which I can open and patch things up myself if needed no problem. My concern would be more so the holding costs and shortening my learning curve in navigating the rental and refinance process.

Hi all,

Long story short, (see previous post for long story) I bought a giant headache as my first property and am waaayyy over budget, but good ol’ LA real estate has amazingly enough exceeded my deficit. I still have another leg of the project to go and am running out of time/cash but the equity keeps going up. It’s located in South Los Angeles just a few blocks south of the USC coliseum. I bought about couple years ago and the area just keeps getting better and better.

Ideally I’d like to rent it out, cash out refinance, pay off my debts to keep it as an income property then potentially build units in the future (9-10 allowable), but I can sell right now for a small profit and a good learning experience.

Are you ready for the problem? It’s an illegally converted (vacant) TRIPLEX=>DUPLEX in an RSO rent control area with no certificate of occupancy and likely some parking issues, still in need of some electrical mechanical permitting. I’ve gotten through the housing department and am currently doing a major cosmetic remodel to capitalize on equity, but am foreseeing problems in the refinance. Here are my 2 main concerns.

1) My credit is in bad shape after weathering the storm and had to drop to a part time job in the process, so I look pretty weak on paper. I talked to some lenders and would be able to refinance with hard money, but that might be cutting my spread a little too thin, especially since I can’t legally rent it yet and am still a bit of a rookie.

2) Being that it's my first property and there are still some lingering issues, I'm wondering if taking on a financial partner to help turnkey and finish the BRRRR process would be worth it. Because I'm so over budget and I'd have to pay off my current loans first, I'm not sure if the offer would be attractive enough. I've also never formally structured a partnership before so any recommendations on that would be great.

I’ve kind of boiled it down to taking on a financial partner or selling at a very modest profit unless by some miracle the building and safety inspection goes off without a hitch. Looking forward to hearing your thoughts!

Hi Joseph,

Not sure if I specified but I’m in the Los Angeles area. Are you local?

Hey BP,

I have a duplex in south LA near USC and I’m interested in starting a co-living community, which is essentially a dorm style, work/live space for young professionals.

I called the housing department and they didn’t seem to have any issues with it as long as I adhered to the rent control lease terms and max occupancy laws, but I wanted to double check that there wouldn’t be any zoning conflicts or other hidden unknowns.

Anyone have any experience on the legal side of things? Otherwise any RE attorney referrals would be great.

@Ira Harden

Hi Ira,

I came across a private lender the other day that offer loans at 30K+.

He was recommended to me by an investor friends realtor and seems like a stand up guy. I ended up not using him this time but I’ll send you his info.

Hi all!

I own a duplex near USC in South Los Angeles that I was looking into converting to a triplex, but was presented the idea of a shared housing community by a contractor friend of mine. After speaking with some private lenders, I'd be eligible to finance the remodel from duplex to triplex based on the ARV, but the cash flow would be significantly less than the shared housing and the remodel much more costly. Obviously I'd like to spend less on the rehab and cashflow more, but it kind of botches my exit strategy.

2 part question:

A. Because I would be keeping it as a duplex and not adding much value to the property itself, although the cashflow would be great, it would reduce the ARV and am not sure how private lenders would look at something like this. Any ideas on creative financing, or is this something that lenders can work around?

B. After the remodel is complete, my renters would consists of many short term leases which are not accepted by my banks for refinancing and I’m unlikely to personally qualify for the refi on my own. Are there banks that will take on these types of properties based on cap rates?

@Michael Tripp

I realize I’m asking for a lot but maybe I can get 2 out of 3 of those traits haha. Thank you!!!