All Forum Posts by: Lawrence Bland

Wow Lawrence your post was so inspirational to read. You have had such a full and wonderful life and the fact that you still have dreams and goals to continue to build a even bigger legacy is amazing. 

I am a California realtor and certified investment specialist so I would love to be one of your contacts on your team. When it comes to building vs buying it really depends. A lot of multi family landlords are long term holders but every now and then some deals are on the market or I find some off-market people looking to sell. With building it can be a task with all the bureaucracy but if you have patience it all just depends on the zoning and all that fun stuff but due able I work with developers now that have built where others would have deemed impossible. If affordable housing is your priority for your strategy going the building rout in California may not be as beneficial as buying something you can rehab. Hope this helps you and we can connect.

Hey there @Lawrence Bland

Congrats on jumping in big.  I'm glad to hear your health is better.

I was a mortgage broker for 12 years before getting licensed as a real estate broker 12 years ago.  Been investing since 2008.  What a rush.  

BUILD / BUY

Both have their advantages.  In today's building environment, a lot of markets don't have the necessary income for a 4-plex to support the cost of building a new one.  To offset the build cost you need more units to carry the lower margins initially.  If you don't have the skills and licensing to be your own contractor, it may make more sense to buy existing.

BUILDING A TEAM

This is all about relationships and not transactional.  Make friends.  Offer your skills and knowledge in exchange for theirs.  It's a journey, so enjoy the ride with people you enjoy working and playing with.

STRATEGIES 

Sustainability is the real question. There are a lot of different ways to skin the cat, not just one. Keep an open mind and don't be afraid to be creative. LTR, STR, MTR, BRRRR, Multi-Family, Businesses, Cash Vending, Note trading, Tax Liens, etc. Sustainability is a very personalized thing depending on what juices your soul.

With my background in mortgage lending, I love finding creative ways to do deals without banks.  Every deal is different and every structure is different.  It depends on the other party. 

I'm happy to connect.

@Lawrence Bland

Welcome back to BP! CA is a beautiful state.  Multifamily has multiple angles of investment. Some of our clients like to buy turn key and other value add. Building can be a long process depending on the state and county you're in. Reno, NV has some good multifamily opportunities and in this area it's better to buy and rehab than to build from ground up.  It will depend on your time, resources, energy, and goals. 

@Lawrence Bland, all of this is from my own perspective, which is likely different than yours.

I see buying as a much "harder" process than building.  By harder, I mean finding deals that actually pencil to even modest positive cash flow returns.  And since you are looking to build legacy, typically that comes from building a buy and hold portfolio.

I don't mean to assume that find land, getting it entitled as needed, and then building a property of any size is "easy", but with the added work often comes the potential for better returns, both in cash flow and value.  Additionally, if you are looking to hold long term, having new construction is going to keep your repairs, maintenance and capex lower for quite a while, typically.  Of course, a tenant flushing action figures down the toilet and allowing their kid to color all over the walls is always a possibility.

Like-minded professionals: meetups and REIA groups. I am assuming that between Lancaster and into the LA area there are many to attend.

Strategies: again, there are people making money in a lot of different ways.  LIHTC development, Section 8 focus, or just finding really inexpensive real estate and intentionally keeping rents lower than market to provide affordable housing for the area.  Some of this comes down to you and how much you want to make.  

I hope you're enjoying this heat wave along with the sunny days! 😅

There are so many "it depends" answers to your questions! I have a couple of investments in LA that I got at a discount (that ended up being a much higher discount after appreciation), and since I love getting my hands dirty, I usually put in a lot of sweat equity for anything I buy. However, at least in the clients I typically deal with, a lot of people are feeling a financial crunch right now and the sellers are generally trying to get way more than a property is worth, making negotiations difficult. Don't let that get you down, though. All you have to do is make a compelling point for them, and having a broken property that they don't want to fix can be a reasonable one.

Anyway, allow me to give you a couple of points to think about.

Downtown LA has been suffering because of the working-from-home shift and the effects of the homeless. I'm telling my commercial clients to stay well away from downtown if they're going for large residential because there's a good chance everything there will continue to reduce. It's getting pretty hard for us to fill those apartments up for them anymore. Avoid the downtown area, but most suburbs are up for grabs.

(I'm sure you know as ex-mortgage, but I'm putting it out here anyway for others) First, make sure you have your pre-approval for any financing you'll need before you even start your pursuit. We usually don't work with those who haven't done that yet. It's definitely a prereq.  If you're working with an agent, be super clear about the difference between your maximum and your ideal property cost and what those levels mean for you and it'll get you started on the right foot.

It sounds like you have a decent idea of what kind of property you want to buy (a 4-plex). I would suggest you start talking to non-resident owners in areas within your price point. I would do a quick look on Zillow (MLS in my case) and find past sales to get a rough graphical idea of where those properties are, and then I would actually walk the streets. I do this anyway because I've been doing a lot of door-knocking to find new clients, and it's pretty interesting to see what kinds of gems pop up when you aren't just looking at a Google map. Find some that look interesting, write them down, find the contact information using a tool online. A lot of people like ListSource but it depends on what you're doing and there are a lot of alternatives, just search around.

Once you get hold of the owner, ask what their situation is. If they're set for life, cool, leave them be and keep looking. However, if you can manage to find the very few who either don't want to be an investment owner or would prefer to upgrade their capital into something more profitable for their stage of life, launch on it. You'll want to run some comps to be very aware of the pricing in the area and then it will help to have some construction costs in mind. LA can be super expensive if you're getting construction done for you, but it can also be super cheap if you play your hand right. Once you get a good number in mind, plus costs for repairs, plus a rough perspective of appreciation in the area (because BRRRR doesn't really work until you factor that in here), you can technically make an offer yourself. However, these situations can be complicated, and it's to your benefit to have a realtor on your side (if you don't already) to help you negotiate and stay within the law.

Your post was pretty general, which I appreciate, but I don't know if I handled all of the concerns someone in your shoes would have. Feel free to ask specific questions!