All Forum Posts by: Michael Alford

Thanks @Dawn Anastasi.

I should have mentioned it earlier, but I'm also wondering the quickest way to sell those items that someone might pay for.

I know that there are companies that do estate sales, so I guess I'm also looking for references for those.

Hi folks,

I have a property that has quite a few items that will need to be cleared out before listing it for sale.

Does anyone have any tips for how to handle this most efficiently in a respectful manner?

Bonus points for any referrals that I can use here in San Diego!

Thanks!

thanks for the links Collin

Agreed Jason.  I'm still going to give it a shot for the next week or two before I settle into a longer term scenario where I wouldn't be using a conventional loan.

My question to myself is how much cash flow should I give up in order to be able to use the lower interest rate from a conventional loan.  Sounds like a math problem!

I'm hoping to put an offer on a San Diego property within the next week or so.

I plan on using a conventional loan, so for now I'm not considering cash only offer requests.  I'm pre-approved, and looking for something under $700,000... Hopefully for closer to half that amount.

My goal is cash-flow buy-and-hold, with a primary interest in 2-4 units, ideally in a neighborhood where I can envision some appreciation.

I'm looking for a property that I can upgrade to force some further appreciation. 

In posting here, I'm hoping to hear about off-market properties that reflect actual deals, vs. wholesalers sending me MLS listings with their mark up added. ;-)

Thanks for your consideration.

Mike Alford

Thanks Vincent, I appreciate your input!

I'd heard seller-financing discussed on some of the podcasts, but hadn't considered it for this property.  I suppose it's worth considering for the tax reasons you mention. I'll need to look into it more once I can come up for air on my immediate investigations. 

Thanks for your offers of support down the line if I end up working in your area.  Like I mentioned, finding quality people will be a big part of my city selection criteria, so I'll keep you in mind as I near at stage.  :-)

Mike

Thanks Aaron!  I just sent you a colleague request, and would love to meet up.

Thanks Antonio. Looking forward to connecting in person! I plan on self-financing the rehab, so no issues there, but Inhear what you and Bruce are saying about living in the rehab. I'm hoping to pick up another small multi to live in if I decide that it won't be productive to live in he rehab.  I had great success in upgrading one unit at a time in my current duplex.

Thanks Bruce!

It will definitely require permits. My current plan is to expand the kitchen into the current back patio, in the process upgrading the existing den into an adjacent great room. Then build a grade-A master bedroom suite above the new kitchen. We'll add a private deck for the master BR on top of the existing garage, and a view deck on top of the master suite to make up for the loss of the back patio. We will also need up upgrade the existing 2-3 bathrooms. My goal is to move the property from the $800-850 range to $1.2M. Nearby homes comp anywhere from $700k to $1.4M and beyond, depending if they are smaller/old school or have been fully tricked out and have a view. The view on my property exists, but isn't perfect. I'm told by a GC that works with flippers and has done some big jobs that the rehab will take about $200k, and about 6 months from permit approval for the approx. 800 square foot addition to the 2000 square foot house. Obviously, my key decision inputs are the ARV and rehab costs, which I'm hoping will firm up as we develop the plans. I have J. Scott's two books btw.

And so the next phase of my life journey begins...

I've decided to build my own future by focusing full time on my REI effort, rather than running out and getting a new job. It would feel really good to use my process development and project management skills to improve my OWN business, rather than just helping another big company grow bigger. (I have a half-year of severance pay, and I'm pretty sure that I can get a new job later if necessary, although it may involve a pay cut.)

My goal is to lay the foundation for a scalable business that can support me full time, build passive income for my retirement in ten years or so, and has at least a chance of making "real money" if all the stars align.

Initially, I will focus on building my methods here in San Diego, while putting processes in place that can eventually be replicated out-of-state. My thinking is that it will be easier for me to quickly learn what works by initially keeping things local, even if it's harder to find properties that cash flow here in SoCal.

So here's my current game plan... (Following Joshua and Brandon's advice in the podcasts, I'm trying to map out ambitious actionable steps, so forgive me if I sound like I'm going to solve world peace in my first full-time REI effort.)

1) This week, confirm that the high-level numbers are there to conduct a major remodel on a Point Loma SFR that I just inherited. It's initially looking like I may stand to make about $100,000 or so, during the course of the next year. (With low holding costs, as me and my sister own the property free and clear.) We plan to sell the house next summer, once the rehab is done, as the rent we could get doesn't justify holding that much capital.)

2) Over the next few weeks, move out of my current duplex, which I love and will be sad to leave. That way I can rent out the second unit, and as a bonus, establish what its market rent is. (It's the nicer of the two units, but has never been rented since I rehabbed it.)

3) Move into the Point Loma SFR property that is being rehabbed. That way I can be on-site full time to monitor/project manage the rehab.

4) Over the next few weeks, build my initial team and then launch the Point Loma rehab, with a couple of initial stage gate steps to rerun the numbers as the architect's plans and GC SOWs are developed/refined. My hope is that during the course of the project I won't have to micro-manage my GC, thus leaving time for...

5) Within the next few months, further develop my initial strategy for building a scalable REI business. I'm currently thinking of starting with a direct marketing machine that will feed my future local flips and holds, while wholesaling the rest. I'm still deciding on the target audiences. I have some savings that I can use to get this kicked off.

6) Kick off my new local marketing business, and give myself a year or so to refine my methods here in SD.

7) Once I have a proven process developed, launch it in an additional city that cash flows better, to establish a track record of managing the business remotely. My hope is to build a local team that can purchase, rehab, and sell properties that my remote marketing engine finds. Initially partnering, then eventually converting a few key people to employee status with significant per-project bonuses to align our incentives while retaining the knowledge of how we do things.

8) Rinse and repeat in other cities, based on how quickly the business can expand, vs. the amount of risk that I want to take on. Obviously, finding competent/trustworthy ground troops in each city will be a key determinant in how quickly the business can scale.

9) See if I can train my niece and/or nephew to eventually inherit the business. (I don't expect to have any kids of my own.)

10) Having built a scalable business that doesn't depend on my daily hands-on actions, over time slowly work myself out of a job as I move into retirement. (I'm 50 now.)

11) Enjoy my full retirement for a couple years, and eventually die happy feeling like I won at the game of life. (Fingers crossed.)

Any input is welcome. I've been mostly lurking for a while now reading the forums and listening to lots of podcasts, and I would REALLY value any advice from the BP community.

I will be posting more detailed posts about each of the topics above, to help collect more detailed feedback. For this post, I'm hoping to get input on my general game plan, and immediate next steps... And maybe a little encouragement for a new phase of my career that feels both exciting and a little scary. ;-)

Thanks in advance for your support and advice!!

Mike Alford

PS. If you're local to San Diego, hit me up either here or at upcoming REI events. I'm really enjoying meeting new folks as I build my local network!