All Forum Posts by: Keenan Patton

I'm thinking of getting out of my work in telecommunications and try to find a investor in CA to work for that I can learn under and work my butt off for. Is that something that people do. Is there people in the industry that are willing to have an employee that want to learn while they work. I need about 100,000 a year to stay afloat and invest at all in CA. Is this a good idea, does anyone in northern California willing to do this.

Would it be more enticing for someone to do this if I signed a contract to invest in there deals for a certain amount of years. A worker that someone is already paying for that will put money back into there deal. I'm thinking that must be a thing somewhere. If this isn't realistic who is the unrealistic people who would take me on.

No matter what I'll find the way just like all the rest of the investors here but learning and working at the same time seems to make a lot more sense.

Thank you everyone for the advice. Looks like I may do some less extensive work to the property and keep the rents at the same or 50 above what they are now with lowering the risk involved with getting the HML.

With the upgrades the rents would go up a couple hundred dollars collectively probably not enough to make it feasible to invest a larger amount in rehab. I will still have to do some work but instead of 50,000 I'll put out about 8k for new carpeting and a new bathroom. With the 8,000 I should be able to lower my vacancy rate by a few percent and charge 50 a month more, adding a annual return increase of about 900, 75 monthly or 9% ROI on the 8k and less work on my end in vacancy issues.

Let me know if that sounds more realistic or if that is a good idea in other peoples opinions.

If you find your own deals and don't have bird dogs getting you every deal than I'd say go for it. Either way the courses that agents take have an abundance of information that could help any investor. Even if you don't want to be an agent than I'd suggest still reading some of the training material anyways just for the knowledge. Plus if you do decide to get your license than you can get commission on deals that you are already making money on. Nothing wrong with bumping up your returns a little extra bit.

Investment Info:

Single-family residence wholesale investment in Citrus Heights.

Purchase price: $265,000
Cash invested: $8,000

Bought this property from another investor. It needed some updating and minor cosmetic work. Put about 8,000 in material costs, and I put in the labor.

What made you interested in investing in this type of deal?

It was an easy property to do as a beginning investor. Lots of cosmetic issues and some modernization of bathrooms and the kitchen made it an easy and low risk investment.

How did you find this deal and how did you negotiate it?

I got this deal another investor that was helping sell for another investor.

How did you finance this deal?

Private lending with no money down for the note. $8,000 came out of pocket for material, and I saved the rest on labor cost by fixing the issues myself.

How did you add value to the deal?

I added value by having the time to fix the cosmetic issues and modernize the kitchen/bathrooms, found the money partner, and deal with the tenant that the current owner was having issues with.

What was the outcome?

A great looking house that produces 300 monthly cashflow.

Lessons learned? Challenges?

Do cash for keys sooner. The tenant was leery to move until we offered to pay for trash fees and cleanup for him.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Not on this one.

I'm sure the rules are different in WA but in CA if the property has a tenant than you have to buy it as an investment and not owner occupied. Though if the tenant is going to move or you can prove that an eviction process is started and the tenant just wont leave than you will be alright. Though if you buy it owner occupied and leave the tenant without having them evicted or trying to get them out than you can get caught up for fraud. 

Obviously WA and CA are different but I'd assume the fraud laws are pretty similar in both states. Definitely be careful.

I'd suggest that if you have reasonable means, without the Roth, to keep afloat in case something financially tragic happens in your life than use the IRA money. If you have enough money to invest that Roth money into a deal that can make you larger returns than do so. If I personally was in your shoes(not that I know your life) I would push that IRA money into a great deal that could make you 10 times the money than that money in a bank account could.

If this is the only money you have though(I'm guessing it's not though since you're smart enough to be on bigger pockets) and you are not educated in real estate yet than I'd hold off and get some knowledge and then invest it later in the right deal.

So I have a deal I the CA foothills. The owner (which also happens to be my grandmother) has a property with 2 houses on it and an apartment above one of the garages. She is willing to hold the note for the remainder of the morgage. Remainder being about 375000. All I need out of pocket is 30,000 and probably about 50,000 for upgrade.

I do not have that cash on hand or even close at the moment. But I think its a good enough cash flow that I need to find out how to get the extra cash. I'm willing to do creative financing obviously but wonder if a hard money lone for the remainder would be best with the brrrr method on a 18 month loan, interest only, if I can find it. 

The note is 2500 a month including taxes and insurance. One house can rent for about 1950, the other house about 1800 and the apartment about 900. So conservatively I could gross 4500 a month. In guessing if a get the hard money ill pay an extra 1000 over the note so a cash flow of 1000 a month.

I haven't done hard money before so I'm a little leery. What does everyone think?