All Forum Posts by: Juan Mora

Hey Eric, im local to San Diego; chula vista actually.  

I run a hvac and plumbing company but looking to get started in flipping.  

Like the previous posts; the only deals I found were on the MLS and the price they asked for made it really hard to make money even in places like Spring Valley and Lemon Grove.

Im open to meeting up and sharing some ideas.  I have access to hard money loans and contractors due to the nature of my biz.

I’m looking at this Zillow deal and running the numbers as a 90 day flip. 

https://www.zillow.com/homedetails/2311-Di-Foss-St-Lemon-Gro...

ARV comps $729,000

Purchase $540,000 hard money loan 

Rehab $80,000 

Carrying costs $20,000

Gross profit $90,000 

I have about $350k in savings and plan to use hard money and heloc to keep my savings safe but ready to deploy if needed. 

Thank you all for your replies; it has help me understand that the $600k price tag is too much and I should focus on smaller price homes.

I found this one below which is a bigger lot and about $40k less than the first on I inquired about.

https://www.zillow.com/homedetails/1435-Madera-St-Lemon-Grov...

3/2 1200 Square feet

$560, 000

This one has ARV of $765k

I have been watching from the sidelines for a few months now and narrowed down what home I can buy and renovation budget.  Looking for feeedback on this potential deal:

1832 Englewood Drive

Lemon Grove, CA 91942

Purchase Price: $600,000

Renovation Budget $90,000

ARV: $745,000

Quote from @Dan H.:

>It almost feels like these sellers have already flipped their properties within the year and now they want to unload their properties before a recession.

You are looking on the MLS. in general properties on the MLS are low risk and in at least decent shape.

If you want properties that are not in decent shape or have risk items, get on some wholesaler lists.  Very few of their properties will have 0 risk and be in decent or better shape.  These properties are to be purchased by investors willing to take on the risks or deal with their condition that often means they cannot qualify for f/f financing.

>What do you guys think of the units above? I would be renting one of the properties to my brother and qualify for a FHA loan and rent the other.

The first 2 are in lower class areas of San Diego.  The 3rd is really small and seems to want to charge for their planned value add that is not penciling out well enough

I wanted to circle back to this property from last month. 

You are right. It was over priced and it hadn’t had any buyers. 

They lowered the price by $100k. And I’m not sure it even worh that much. 

The property is actually 2 small studios each 450 square feet. They can probably rent for $1800 at the month for a monthly income of $3600 

that is definitely not enough to over a $4500-5000 mortgage paymen. 

Quote from @Gary L Wallman:

Quote from @Juan Mora:

I have experience in residential HVAC/Plumbing installations and the estimate provided is within the ballpark for a legitimate, contractor who operates a profitable business with well trained technicians.  Not your cheap side job guy who will do it for $300 a sixpack of beer.

I am sure you can find a cheap guy who will not give you any warranty for half the price just like you can for flooring, kitchen, hvac, painting and landscape.

The proposal estimate shown above is from a software company called Service Titan.  Only top notch companies use that software, all the cheap companies who don't have real shops or employees just use pen, paper or a free software. I think the lower cost option would be just fine for a basic tank.

AS homeowners or flippers, sometimes we have no idea how much things should cost and have no idea how to run a service/contracting business.  Thats why we automatically say it should only costs XXXX amount. 

I encourage you to get another quote from a reputable company and see whats their ballpark. If you really want the cheap of the cheapest like many flippers; expect to pay cash to a guy who will do it on a saturday but ZERO warranty if something goes wrong. 

est of luck in your repairs

 Juan,

Almost 5k for a water heater replacement? Sorry but your dead wrong. I own 150 plus doors, have replaced  dozens of hot water heaters and haven't spent more than 800 bucks, labor included. The exception being my personal residence which required an 80 gallon tank and that was still half of what this contractor is quoting. Regardless of his fancy software, he still seems like a crook to me. IMHO.

Additionally I would fire the property manager. Likely crook #2, in my opinion.

Further, who replaces a non leaking water heater because "it's at the end of it's useful life"? A prophet of some sort? Give me a break.

Respectfully,

Gary

 Congratulations on the 150 doors, thats a great accomplishment.  I have no idea how to even get to 10 doors yet and that's why I am here learning the biz.  I only have one rental worth over $1mil in sunny Carlsbad CA and a $900k home in Chula Vista. 

I don't know about flipping yet but I do have experience in contracting and know how to operate a multi million dollar business.  There's contractors for all types of customers; we deal with high end customers in La Jolla and Rancho Santa Fe.  It all depends on the level of service one needs or wants. 

Again, theres a cheap contractors for cheap customers.  There is nothing wrong with being cheap, price conscious, budget friendly or the most popular term "reasonable" or  whatever you want to call it.  How much is reasonable?

We see it everyday and theres contractors for every customers.  

That does not make me wrong; just different opinions.  

Again, in my opinion, that's a fair price for a legitimate, licensed and insured company.  Not your weekend side job guy.  

Please don't try to make this between ME and YOU because I have no idea who you are, or what you do for a living.  I am here to learn flipping. 

Quote from @Carlos Ptriawan:

This is why, at the end, customer is more like paying for software cost, than the actual cost of the hardware itself. The tech cost is just too much markup, I see it many times for jobs that involves large hardware.

At the end of the day , I would rather pay a nice-standalone-guy-thats-working-on--saturday using one piece of paper.

And that’s perfectly fine. That’s the best part , there’s cheap contractors and expensive ones. 

It all Depends on the level of service the customers wants.

I have experience in residential HVAC/Plumbing installations and the estimate provided is within the ballpark for a legitimate, contractor who operates a profitable business with well trained technicians.  Not your cheap side job guy who will do it for $300 a sixpack of beer.

I am sure you can find a cheap guy who will not give you any warranty for half the price just like you can for flooring, kitchen, hvac, painting and landscape.

The proposal estimate shown above is from a software company called Service Titan.  Only top notch companies use that software, all the cheap companies who don't have real shops or employees just use pen, paper or a free software. I think the lower cost option would be just fine for a basic tank.

AS homeowners or flippers, sometimes we have no idea how much things should cost and have no idea how to run a service/contracting business.  Thats why we automatically say it should only costs XXXX amount. 

I encourage you to get another quote from a reputable company and see whats their ballpark. If you really want the cheap of the cheapest like many flippers; expect to pay cash to a guy who will do it on a saturday but ZERO warranty if something goes wrong. 

est of luck in your repairs

Indianapolis, Indiana, 46208

$312monthly cash flowFind a local investor friendly agent

Monthly cash flow

$312 /mo

Income

$1,500 /mo

Expenses

$1,187 /mo

CoC ROI

13.13%Year 05-year annualized return19.04%Mortgage payment$671.09

Rental income

$1,500Rental income$1,500 /monthEdit details

Expenses

$1,187Custom expenses$0 /monthVacancy5%Management fees10%Edit details

Loan details

Total cash needed$28,600Purchase price$130,000Loan amount$104,000Loan term30 yearsInterest rate6.7%Edit details$1,187 Monthly expense breakdown Total expenses$1,187Mortgage$671Taxes$81Insurance$60Variable expenses$375Fixed expenses$0Fixed expenses$0electricity$0gas$0water & sewer$0hoa fees$0garbage$0Other$0Variable expenses$375Vacancy$75Maintenance$75CapEx$75Management fees$150 Returns NOI$11,808CoC ROI13.13%Pro forma cap9.08%Purchase cap9.08% HELPHow are returns calculated? 50% Rule Total monthly income$1,50050% for expenses$750Monthly P&I$67150% rule cash flow$78 HELPWhat's the 50% rule?

	-	Year 1	Year 2	Year 3	Year 4	Year 5	Year 10	Year 15	Year 20	Year 30
Property value	$130K	$133K	$135K	$138K	$141K	$144K	$158K	$175K	$193K	$235K
Equity	$26K	$30K	$34K	$38K	$42K	$46K	$70K	$99K	$135K	$235K
Loan balance	$104,000	$102,880	$101,684	$100,405	$99,038	$97,576	$88,604	$76,075	$58,575	—
Cash flow	$3,754	$3,991	$4,231	$4,477	$4,728	$4,983	$6,340	$7,838	$9,493	$13,335
Mortgage payment	$671	$671	$671	$671	$671	$671	$671	$671	$671	$671
Profit if sold	$1K	$5K	$13K	$22K	$31K	$40K	$93K	$158K	$238K	$454K
Annualized return	—	17.87%	20.88%	20.67%	19.9%	19.04%	15.54%	13.31%	11.8%	9.88%

I have been researching different markets such as SoCAL, Arizona, Mexico, Cancun and now Indiana.  I live in San Diego and have about $150k in cash and Cds earning 6%.  I would like to get started with my first Investment Property Out of State.

My plan is to put 15% Down and finance the rest with a Conventional Loan at 6.75% and keep it as a Long Term Rental for my first LLC. I have been in touch with some group members who pointed me to this website with some good properties.

I found this entry level duplex for $140,000.  I ran the Rental Property tool on BP and it pencils out.  

https://property.mibor.com/dow...

2442 Indianapolis Ave

Indianapolis, Indiana, 46208

$312monthly cash flow

Monthly cash flow

$312 /mo

Income

$1,500 /mo

Expenses

$1,187 /mo

CoC ROI

13.13%5-year annualized return19.04%Mortgage payment$671.09

I found this second good one but it is out of my comfort budget for being out of state.  

https://www.zillow.com/homedetails/1407-S-Alabama-St-Indianapolis-IN-46225/1084439_zpid/?

Does the first one look like something you guys would jump on?