All Forum Posts by: Swat Khan

I would like to start off by thanking Biggerpockets for all this great info. I realized I read this forum a min of 30 mins a day.

Back story:

We had a fire at our apartment complex. It appears to have burned out 2 of the units.

Tenant tried to get homeowners insurance during fire. Not sure if he was trying to collect insurance money.

Questions:

Would the insurance company give us any hassles if we reported it? Would they cancel our contract?

Anyone else deal with this?

Thank you.

Let me know if you still need help here.

Will be in town for a few days for multi-family property.

Swat
310.651.1786

Definitely possible in SoCal but having some of your own reserve capital in case something goes wrong will always help during the fix and flip process.

The key is to finding a good deal then going out there and finding an investor to partner with you.

As discussed previously by Mr. Holdman, most HML will require some skin in the game.

I would recommend networking to partner with private money investors. There is plenty of private money in SoCal. The key is to build relationships and show them how you can give them a solid return secured by real estate.

Every investor will be different, so you have to find out their needs and what it takes for them to be comfortable working with you. IRR, duration, types of assets, their experience investing, etc.

Best of luck.

In the Los Angeles/Orange County area the inventory is low and has been since mid-August. You can still find product in the Inland Empire.

Due to low inventory, the homes on sale have lower days on market (DOM).

It may not be as easy to pickup a deal now, but agressive investors tend to market and will find creative ways to get into deals.

Hello Swat,
I shortened your question for my reply.

I will answer your 3. question first. "Don't jump in here!"

Why?

Lot rent $1,073 per month thats not high thats fatal.
If he asking $4k or nothing if you cannot sell this house in 3 months you must pay $3k in propertie rent. How much will be your sales price then? $12k?
Stay away from this if the seller don't find anyone for OO with $4k you will not find anyone with $12k.

My 2cents. Good luck!

-Uwe

Thank you Uwe for your response. I appreciate your insight.

What would be considered a reasonable lot rent for the numbers listed in this deal?

Why would a park owner set the lot rents so high?

Yesterday, I saw a nice park that was 1 mi from the beach and charges $1000 for lot rent which is much more justified since you're near the ocean.

Hello BP!

Just wanted say I love this forum and I wouldn't be where I am now without it!

I got a lead on a motivated seller for a MFD home in a B- to C+ area. This is going to be a Lonnie Deal.

Specs:
- 1970s 18x56
- 3 bed/2bath
- New heater (2011), New A/C
- has wood flooring in living and kitchen. Carpet in the rest of the house.
- Repairs: needs new carpet and fresh paint.
- Lot rent: $1073
- With utilities bills come out to: $1225 (this is in the middle of the summer)
- Lot rent has been paid until the end of the month. So I can try to sell the home by Aug 31st without paying any lot rent.

Other info:
- Motivated seller, just bought a home and needs to move by the end of the month
- Owner lived in unit for 22 years, bought in 1990
- Park has a pool, a rec room, and playground for kids. Park owner expects you to sign a 5 year lease.
- Market rent for 3 bd/2 ba is $1400-$1800 in the area.

- Buying: He was asking $4000 and I offered $2500
- Selling strategy: owner financing to a buyer, $2000 down, $250/mo mortgage for 72 months.

Questions:
1. Does the lot rent seem high? It's $1073. Will this hurt me in the long run?
2. Is my offer too high?
4. Anything else I should consider before jumping in?

Thank you in advance for all the help.

I'm also curious how the software performs. Anyone use it?

Thanks for the reply. So you simultaneously register your LLC when buying the property? How long is this process?

Since it's expensive, do you feel it's worth it?

Hi biggerpockets!

First off love the forum!

We are submitting an offer on a 4 unit multi family with owner
occupying 1 unit. Owner would like to create an LLC for this multi-family property as well as each MF he buys for tax sheltering, asset protection, etc.

Should the owner create an LLC for the property now with the offer? Or can he transfer it later? How long will it take to create one for the property? Any way to speed it up?

Any other advice we should know about an LLC?

Thanks in advance.

Thanks for all the input guys. Very much appreciated.

Chris: Great work on your first deal. That is awesome. Sounds like the same strategy that I want to implement and it really worked for you. I really need to develop my bank roll so I could get involved in more cash flowing deals and paying $1500/mo for renting a 1 bedroom doesn’t make sense long term. Owner occupied multi-family seems like a good start.

Matthew: As Chris mentioned, since it's an FHA financed loan I would be putting down 3.5%. The last lender I talked to was giving me 3.875% interest rates which are incredibly low. If I were to go out of state, it would be Michigan, as I have family there and I'm familiar with the area since I went to high school and college there. Michigan has ridiculous deals for 10-50 apartment complexes. Another option would be the Phoenix area so I could drive or jump on a short 1 hr flight for the weekend.

Brian: Good points. I am going with a 4 plex as the first deal for added security that my mortgage gets paid. By collecting rent from 3 units I have a higher probability to cover rent even when I have vacancies (luckily LB occupancy levels are 95% and above). But don't get me wrong, if I can find a deal for a triplex with better numbers/CAP rates then I'm all for it. But so far this isn't the case in the region I am investing in.

Anything else I should look out for?

Also, if the property needs work, is there a lower chance to have it FHA approved? I spoke with a lender who mentioned that he has his own appraiser which improves the chance of the FHA loan to go through during escrow. Any truth to this? I thought the business tightened up and appraisers were selected at random now.

I looked at the guidelines and they mentioned that broken windows, missing stove, hanging wires are all reasons for it to not be approved. Anyone have experience with this? What do you think of 203k rehabs?