All Forum Posts by: Sammy Lyon

Oof, that's tough. as a realtor I'd say you need a CMA from a realtor (or someone with MLS access). But as a realtor, I don't want to keep doing ARVs for investors for free. LOL. Have you been hitting the mark on your ARVs with your system so far, or are you just starting out?

There are new laws affecting California transactions in 2024, some of which are very relevant to investors and house flippers.

According to the California Association of Realtors, starting July 1, 2024 most 1-4 unit properties that are resold within 18 months (aka flips) must disclose:

- repairs, renovations, room additions and structural modifications that were performed by a contractor with whom the seller entered into a contract

- the name and any contact info for the contractor for any work over $500

- any permits obtained

So you still can be an HGTV star, just make sure you do it by the book. :)

Have any of you flipping in the Los Angeles area been affected by these new disclosures?

It hasn't come up for me on a transaction yet and I'm curious how it's playing out in practice!

For more info, check out the law itself AB968: https://legiscan.com/CA/text/AB968/id/2764362

https://www.car.org/riskmanagement/qa/New-Laws/2024-New-Laws

I'd probably do a house hack in CA with a MTR back house or ADU. But if you are looking in Cleveland talk to @Tal Tamir, he can share what areas would be better for a mid term versus long term rental.

cool sent over the ADU contact as well as engineer and architect!

You can also check out Small Change https://www.smallchange.co/

We didn't end up going this route on our remodel, but there were 2 designers we talked to who do everything virtually which saves a ton on costs. So they'll help you pick the finishes and hand you a shopping list and then you do the rest DIY. One only does it for short-term rentals and one does it for homes too! Happy to find their info if that's what you were kind of looking for.

Have an amazing one but feeling selfish bc he's working on my house now. You can't have him til 2025! haha. but can certainly send you my architect/engineer they have also been amazing. Also have a good full service ADU contact.

How come realtors always say it’s a good time to buy? Isn’t that kind of weird — how can it always be a good time to buy??

Well, think of the concept of dollar cost averaging in stocks — instead of buying stocks one time, you invest consistently.

Sometimes you buy low, sometimes you buy high.

But as long as you stay in the market, you benefit from the tendency of the market to go up over time.

People think of buying a house as this one time thing, but it’s actually more likely that you will buy, sell, refinance a few times over the course of 30 to 60 years. This is the real estate version of “dollar cost averaging.”

So even though home prices do go up and down, they tend to go up overall.

If you get in the market you are getting a piece of the pie, versus waiting and missing out.

For example, you might end up selling when prices are lower, but then you are buying a new place when prices are lower too. Or vice versa. Or buying when rates are high, and refinancing when rates are lower. Or buying a property in a seller's market, and then buying another one a few years later in a buyer's market. Or ideally, always buying and never selling. :)

It tends to even out – AS LONG AS YOU ARE IN THE MARKET.

I know we are all stinging from the 2008 crash. But frankly, the only people who are losing now are the ones who are trying to time the market.

So, I don't think it's just a weird sales tactic to say it’s a good time to buy, I think it's reflective of the fact that it IS technically always good to buy… as long as it’s a payment that YOU can reasonably expect to pay over the next few years.

The reality is, it’s a good time when YOU are ready to take action!

What are your thoughts? Is it just a cheesy sales tactic to say it’s always a good time to buy?

I wouldn't limit yourself so strictly on either/or. Let's say you are really, truly actively looking in the market. First, I'd suggest connecting with a good realtor (@Tal Tamir in Cleveland and @Anthony Petitti in Columbus are folks I've worked with and love) as well as a property manager in that market. 

Everyone's obsessed with "off market deals" but a realtor who knows their stuff will be your true guide in the market.

Secondly, I recommend asking those folks for good lenders, and also finding and connecting with other investors in the market (who have nothing to sell you). 

(I also suggest an in person visit to meet folks and get to know the areas, not to see a particular property but to build relationships.)

Once you are active in a market you will start to connect with investors who may be selling, wholesalers who have assignable contracts, and your realtor may also have access to off market opportunities. 

You won't be getting access to these if you are a tire kicker, so having some actual purchases under your belt will show you are serious. By all means, finance these initial ones!

But think of your capital like a fund - some purchases make sense to finance, and some you may get a screaming deal if you come in all cash with a quick close. So you may buy one property with traditional financing, one all cash for a BRRR, and one with seller financing with a lower down payment (for example). There's no reason to go ALL financing or ALL cash, but to be strategic about how to use your funds to acquire more properties as opportunities present themselves.

Hope that helps with your thought process. Above all, take action! :)

I got to 10 units in the first 10 months (not 10 properties though, some were duplexes) with a mix of 1. traditional financing, 2. JV partnerships, 3. hard money lending, 4. private lending. Quitting my W-2 job after the first purchase forced me to be creative too!

Unfortunately 10 units proved to be too much for my property manager at the time to handle, (a mix of them being bad at their job and also that they were just shady) which slowed me down and I had to do some damage control before buying more.

But the mix of different strategies and partnerships for financing taught me a ton and helped me learn firsthand how they work, so I don't regret a thing! (except not firing the PM sooner, oh well..)

I also was thinking like you originally, that I would just keep putting 20% down on each, but each purchase taught me a new thing, and each opportunity presented itself at the time and I had to be open to creative ways to purchase, since not every property will be a perfect fit for traditional financing. 

If I have one piece of advice it's to do 1 at a time and make sure that on each purchase you are learning at least 1 new skill you didn't know before.