All Forum Posts by: Khoa Ha

@Sal M.

If the check box is not clear then why don't you just not check it and attach an addendum with the statement: "A $50 non-refundable screening fee per applicant collected prior to processing." This way you can collect the money and use it to screen the applicants. I use an addendum in my rental application too and I put anything that cannot be clearly stated on there all the time. 

KH

@Emre Görü,

Sorry ahead of time if this is long,

We added the sqft in 2 phases. The first one was adding some extra space in one of our room and a restroom to turn that room into a master. At the beginning, my house have 3 beds and 1.5 baths but both bathrooms are outside. So when we know we will have a baby girl we decided to add a bathroom into our room to make it a master. For people with baby a bathroom inside your room is a must. Also, having a bathroom inside one of the room make it more desirable if you want to sell. Anyway, I started out working with an architect. He drew up a plan of what we want. Then we submitted the plan to the city to get approval. Make sure to keep tap with them. They can sit on your file for a long time if they dont feel any pressure from you. They said they will call me back when it is done but I have to called them multiple occasions only to find out they mailed the file to a third party that are approving the plan (they didnt have the staff to handle the workload). I went back and forth between the two offices for a few times before my plan got approved. Then comes time to hire a contractor. I got 2 separate quotes, the first guy gave me a quote of $38,000. My wife and I literally flipped out because that was way over what we budget for it. We thought it would only be around $20,000 or so. Luckily, our second quote came in at $25,000 (labor and material included). If you want you can separate the two out and just get a quote for the labor. You will handle the material cost. However, I think it is more efficient for me to have the contractor handles everything. I have a full time job and a side business that takes most of my time so I dont have time to constantly working with the contractor regarding buying the materials. So we ended up hired the guy that quoted us for $25,000. The contractor also help us tweaked the plan a bit. Word of advice, if anyone wanted to increase sqft of a home make sure to work with the Architect and Contractor at the same time. Dont separate them out because they complement each other. What happen was the architect didnt realize that by making the foundation as concrete it would have saved us close to $2,000 in labor cost. Our home is a raised foundation and the plan was draw based on that. So when the contractor came he said if we would have done it by lay the foundation in concrete it would have been much easier/cheaper. But during that time we were pressed on time and going back and updating the permit will postpone the project so we decided to just do it the way the plan was submitted to the city. Also, the contractor also advised us to turn the restroom 90 degree over. The original plan left too much space between the front of the restroom and the patio door that we won’t be able to use the space for anything. Turning it 90 degree reduce the empty space and making the space where we put the bed to be much bigger. The different is noticeable.

Our contract stated that he will finish the work within 6 weeks. So we broke our payments into 6 separate payments. Pay him at the end of each week after we see the progress of the work. This worked out really well. Also, we tried out best to pay the contractor at the end of every week even though once or twice he said it was not important and we can pay him later. To me that gives him the impression that we are up front and that we keep our promises so he should keep his order. I know of another friend that uses the same contractor but her project was delayed for a while. I am not sure the exact situation but from what my wife assuming (my wife is a good friend of the other landlord) that it might be because they were short on money and so the contractor delay the work until he get pay. Our project went pretty smooth. Completed in 7 weeks, the reason was because he had a small delay in getting the city inspector to come out and inspect the work before continuing. They inspect in several phases so we have to get it sign off before continuing the other work. Also, make sure that the contractor will be taking care of greeting the city inspector and take note of whatever they recommend too. Like I have mentioned, we work on the weekday so we can’t be home when the inspector came. Sometime the inspector will give you a time range of a few hours and you literally have to sit there and wait for them because if they misses you they will require you to reschedule. Also, make sure that the city inspector know that someone is home during the appointment. My contractor had his wife waited for the inspector at the back of the house one time and when he came he didn’t see any car and after he rang the front door bell for a while he left. Made the contractor have to delay 2 days of work to reschedule him.

The second phase of our expansion is an enclosed patio. This time it is much easier since we submitted a play using the preset configuration from the city. You can just go to the city and as them to give you the package of the preplan. All you have to do is choose the type of support you will use and the size of the patio. With the pre-approved template we received our approval much quicker.

Lessons Learned:

1) Work with Architect and Contractor at the same time.

2) When applying for the permit make sure to call the city and check with them on a regular basis. Do not just sit and wait for them to call you back. Sometime they forget and you will be left hanging.

3) Get multiple quotes.

4) Treat your contractor same as you would like to be treated. If you treat them good they will return the same treatment. (I have a handyman that I use for all of my non-permit repairs. I have been working with this guy for a very long time now. Since we purchased an apartment back in 2009 and a second apartment in 2011. I asked him for help whenever I have things I need him to repair. Sometime I send him over just to take a quick look and see if he can fix an issue or not. Whenever stuff like that happen and he cannot fix himself and I have to call in the specialist I tend to pay him something for the assessment. I think by doing that he value my business and always ready to help me out even when he is in a middle of other jobs.)

KH

@Frank Jevitzky,

Yeah real estate in Orange County is insane now. I bought my primary resident back on December of 2016. (3 beds, 1.5 bath, 1250 sqft) for $515,000. A month or two later I saw another property on the same street (about 10 houses down) renovated and listed for $680,000 (3 beds, 2 baths, 1600 sqft). I laugh and said no one will buy it for that price (I have a broker license and access to the MLS so I can get comps). Anyway, a few months passed and no one bought the place at that price so they reduced it a bit. It ended up sold for $645,000. That is $130,000 more than my house and only have like 350 sqft more. I renovated part of my house and the cost was roughly $150 per sqft. So even if I add the extra 350 sqft to my house it should only value at $515,000 + $52,000 = $567,000. Still $78,000 less than the price that sold half a year after. Now after I look up my house on Zillow they estimated it to be $640,000 (3 beds, 2.5 baths, 1600 sqft), I have added roughtly 350 sqft since I bought it.

KH

Hi @Frank Jevitzky,

Thanks for the introduction. My family and I have 2 multi-family units in Orange County. For the last few years, most multi-family seems to be way too expensive within Orange county (assuming 25% down). Base on my calculation most, of them have negative cash flow. I have been looking into LA county and Riverside county as of late. You have mentioned that you are looking to start with wholesaling and also have experience in property management. If you don't mind please add me to your multi-family buyer wholesale list. I would love to receive off market deals from you to analyze and maybe purchase. 

Thanks,
KH

@Alex Deacon is right. It will take literally a month or so and maybe a few hundred dollars in class and exam fee for to you get that real estate license. After that you can send your lead to other agent with a 25% split and not need to worry about any issue that might come up with managing a brokerage yourself. Most of the time the 25% is pre split too, that means they will have to give you 25% before splitting it with the brokerage they work for so it is a very significant amount if you dont want to do the work and still make money from your leads. 

KH 

@Joe Yeh,

Just a word of caution I have been looking at multi-family units within LA, Orange, and Riverside counties and not too many of them will be cash flow positive. I am talking about having a 25% down and an interest rate of 4%. In order for you to possibly see some cash flow for a 3 million dollar purchase you will need roughly $18,500 of rent per month. That mean each of your 8 unit will need to bring in $2312.50 per unit. Below is what I can come up with.

Assumption Notes:

Tax: 1.1%

Insurance: $300 per month.

Vacancy: 5%

Maintenance: 10%

Management: 10%

Break Even at $18,500 per month in revenue. 

@Patrice Penda

Thanks for your help. I will reach out to them once I get my fund in order. 

Thanks,

KH

@Joe Splitrock,

Thanks for the advise. No wonder I cant find too many 20+ property when I check the MLS. @Patrice Penda gave me a few websites and I have seen few reasonable priced property on CBRE. I will probably follow them closely until we have the cash to fund the investment. 

Just a side question: Have anyone work with CBRE before? Most of the property on there do not have a list price. Does that mean I need to contact the listing agent on there to get the information or what is the best way to approach it? Sorry if the answer is trivial in just contact them. I just wanted to know in case there is another way to get that information.

Thanks,

KH

@Kevin Fox

I like to invest closer to where I live so Orange Counter or within an hour or two of driving distant. 

Thanks,
KH