All Forum Posts by: Justin Yurong

Hi all. I'm a new wholesaler and I'm curious to hear other people's experiences recycling their cold call list. I created a list of distressed property owners of about 18.5k records. My VA has called about 11k of these records in about 2.5 weeks so far with decent leads that I've put into my pipeline.

She has instructions to recycle the list and continue calling people until she gets a "do not call me again" response from each person. I am wondering whether or not I should create and skiptrace a whole new list once she calls that current list once, or if I should just have her continue calling the same list. 

Skiptracing can be costly and I want to make sure I get my money's worth out of each list but I also want to make sure that I'm not wasting anyone's by calling the same people who never respond. Any feedback or stories of your personal experiences help. I just want to feel like I'm moving in the right direction.

Hi Las Vegas Investors,

My name is Justin Yurong and I am a 23-year old real estate investor and Realtor in Central California. I have been involved in a little less than 10 residential flips, wholesale deals, and have owned one rental property for 2 years. I currently live in Clovis, CA but I intend to move to Las Vegas, NV to be close to my new baby niece and some family.

I would love to form some Vegas connections. If you would like to connect, please reach out.

@Deepa Jan I’m in the Clovis and Fresno markets and would love to connect! Feel free to reach out any time

Thank you all for your input. I appreciate it.

@Angelo Wong The reason there are so many people involved is because I haven't found people wanting to contribute 50k+ (at least, the people who I have a prior relationship with). There were a few interested in investing over 50k, but they were people I did not have a prior relationship with. I'm starting out with people I know and already have relationships with, as advised by the attorney structuring the entity. Also, the CPA/bookkeeper costs are already factored into the calculations. The margins aren't necessarily enormous, but they're enough to satisfy the current investors in the group. 

With my current group, what would you recommend? Anything helps. I always appreciate hearing the negatives, but I would love to hear your pieces of advice on how I can make this happen.

@Chase McArthur Thank you for your advice. Luckily, I've built a relationship with the attorney structuring the entity and he is interested in using the initial legal costs are his "investment amount" into the deal. 

While there are many hands in the pot, everyone essentially earns the same return that the building returns. I'll give you the example with the building I'm about to offer on tomorrow under this structure.

This is a general example of how an acquisition would look like. Say the building cash flows around $1,800 per month after all expenses, which is likely what this building would cash flow when using market rents. If the initial investment is 180k, the cash-on-cash ROI is 12%.

Let's say one investor had contributed 18k into this deal. This means they would be a 10% owner. Out of that monthly cash flow of $1,800, they are entitled to $180 every month (10% x $1,800). For this particular investor, their cash-on-cash ROI would still be 12% ($180 x 12 / $18,000). Did that make sense?

@Justin Kane Thank you so much for your reply. Would you be able to further explain what you mean by subscribing all 180k as 1 constituent as a single entity for financial management?

@Chase McArthur They are not. They would be considered sophisticated.

I've been working on putting together a deal with my friends, family, coworkers, etc. They would all be considered sophisticated investors. As of right now, I have an informal commitment of funds of $180,000 with 35 total investors (including myself). 

The quick and general idea is to purchase a small apartment building (5-16 units) in the Fresno/Clovis area of California, and everyone's ownership interest is proportional to the amount of funds they contribute. I wanted to structure it as an LLC, so that each investor would have limited liability unless they are going to be a guarantor on the mortgage.

I'm in contact with a commercial mortgage broker and lender, and it seems like lenders may require 60% or more of the LLC ownership to be guarantors (12 people, for this particular group). Ideally, it would be me and 1-2 other investors to be guarantors of the mortgage, not 12.

Has anyone had any similar situations? Have you found a better way to structure the entity so that not so many people would be guarantors risking their personal assets? Or, have you found ways to negotiate with commercial lenders to accept less guarantors?

Any piece of advice helps.

Thank you all so much for the replies. I really appreciate every single one of you. 

I'm working with the current tenants, and they have been very accommodating and understanding. I let them know that they could be responsible for the rent for the remainder of the lease, but that I would like to work with them so they don't have to. I told them I would like to have their replacement tenant ready to move in the day after they leave, and they're more than happy to clean up the property so that prospective tenants can view the inside. They even offered for me to keep the security deposit for the trouble. 

The property is currently being marketed, and I've already began pre-screening prospective tenants.

Again, thank you so much to everyone who commented. 

I am self-managing my single-family home rental in Fresno, CA. My current tenant just notified me that they would like to move out by the end of next month. However, their 1-year lease is effective for 6 more months after their desired move-out date. They have been fantastic tenants so far. They are set up on automatic rent payments, and they have never been late. They send maintenance requests as needed, etc. 

My lease allows me to have them pay any costs associated with their breach of lease, which includes the rent they would have paid if they stayed the whole term.

How have you all handled situations like this? Any piece of advice helps. 

Hi Tyler! I'm not familiar specifically with your area, but here are a couple of general pieces of advice that may benefit you:

• Just because the property already has a tenant doesn't mean they're a good tenant. They might be, but it's good to be prepared for the worst-case scenario. A question to ask yourself might be: Why is the seller selling the home if it's a perfectly good cash-flowing deal? Has the tenant not been paying on time? 
• If the numbers work for you, then see if it's located in an area you'd be comfortable buying in. At least where I'm at, a lot of the deals with good cash flow are located in the not-so-great neighborhoods. That isn't necessarily a bad thing. It just means you have to evaluate whether or not you're willing to accept that, and possibly accept a lower quality tenant. The solution: find an agent/investor in your area to go to for advice when it comes to location, because location is everything.
• The home is old. I would say to budget for repairs with a home as old as that. Again, it's not a bad thing. You just have to see if the numbers still work with extra repairs.

I hope this helps you at least think of things differently.

Yes, @Jeff Zimmerman is a fantastic resource for you to use if you are looking in the Fresno area. He helped me with my first deal, and I will continue to use him in the future. I highly recommend reaching out to him.