All Forum Posts by: Michael Lam

Hi @Lori Bossemeyer

You have a nice "problem" to have.  When you say couple miles away from campus, how long is that driving based on the traffic there typically?  It doesn't sound like walking distance is it?  I think for a vacation home, check out what they are renting for at AirBnB or HomeAway to compare rent rates vs yours in your area.  That could help decide if its worth the investment.  I wouldn't compare hotel rates if you can find these "vacation" rentals nearby.  

Also if your targeting "vacation" rental whats the attraction outside of college events?  The home should be in very close proximity to events to make more sense.  

Yes White is trending, or at least in my area, Bay Area.  It provides a clean look.  But to me beige is classic and I don't think it negatively hurts you.  The white to me is "trending" and who knows if it'll last like what I've seen in "beige"  .

As long you stay away from those high contrasting old school colors, you'll be fine :)

@Ryan Dossey

Thanks for sharing this valuable and yet unfortunate event.  

When you say check insurance,  what terms are you suggesting we check?  Whether our fire insurance covers fires that spread onto our properties?  Is there a specific language /term to reference?

Hi @Jorge Garifuna

I will attempt to answer each of your question

1.  Its much easier to approach friends/family if they know about your real estate business.  I suggest you establish your credibility.  Don't expect anyone to give you money if you don't have projects to show for.  In the event they know what you do, one way to seque into a conversation to talk about a deal where you can discuss the potential profits.    For an example, a family member may be looking to make extra money.  So you can use that to highlight this is an awesome way to get some passive income.  Or if they are not, use the ,"with this extra cash you can buy...<what they want>"

2.   If your real close to family, you'll be surprise some will just let you barrow for a flat fee or sometimes even free if you can return it in short.  A good rule of thumb I've used is it should be between 3-8%

3.  I wouldn't let them dictate.  come up with a proposal and offer them the deal (each the same)

4.  Yes, using one of your rental as collateral is wise and shows confidence in the deal your proposing.  Put a value on your rental, and how much they lend you make it a percentage of equity you'll give to them in a default.  I've done something like this in the past but with one one party.  With many it could get little messy but doable.  Just have someone in law knows how to write proper contracts.

5.  Its called a "Promissory Note".  Look that up on google and its a lot of resource.  (I'm trying to avoid posting links, don't want BP to think I'm spamming)

6.  Cheapest way is probably just doing a direct wire transfer.  That can be done with any bank for immediate access.  The cheapest but long way is have them just mail you a personal check.  Remember, don't make it difficult for the lender to send you money and it shouldn't cost them anything to send to you.  If it does, make sure you offer to pay for that cost (i.e Wire fee)

@Tom Tran

I always love the sign, "Smile your on camera".  I don't believe you actually need a live camera, just one that has a red light turned on.  Most of the time if someone is going to dump, they will first drive by to see if the area is "dump-able" and by seeing these large signs, they'll go somewhere else.

At the end of the day, that just nature of the business, as you incorporate this cost in your budget to maintaining the site.

Hi @Miller Josh

You have a general question that is hard to answer.  However I  can provide some tips.  First, quick background about me, I'm a real estate investor, however I'm a software engineer by degree.  I have a team off-shore that I manage while I'm working on a tech real estate / HR  startup.

1.  Your requirements will ultimately dictate cost

2.  Don't look at pricing as absolute, its relative to value

3.  Local are best but they will be costly in the thousands.  PM me for some examples to give you

4.  "lead generation" hope you understand doesn't just "turn on", it will require a lot of work to bring in the traffic.  either paid (costly) or organically (seo, free_)

5.  IF your really tight on budget, check out https://www.upwork.com/

6.  If you don't know exactly what you want, I highly suggest you have that ready before pursuing further as the cost will add up, unless the vendor includes that as part of pricing.  A lot times they say they will, but as you iterate several times, their patience will manifest and generally haste decisions are made that could be regrettable.

7.  You could use this thread to ask or help get your specs defined.  Either way I'm happy to give advice and help you avoid some pitfalls I've seen my colleague experienced.

Hope I gave you a broad answer  :)

@Charlie Fitzgerald and @Eric Chiu

This becomes more relevant if your looking at an even larger plan.  The question may not be relevant should you enter now since your not looking at appreciation to help answer this question.  However I would ask, "with my current assets/liquidity, is it best to enter now or is there a likely hood of a correction which my assets/liquidity would be better leverage?"  

As investor you look for best deals, as a data driven investor, you look for signals that reduces your risk.  With so much data and information out there, why not leverage this information

I agree that you can't "time" the market,  that is like playing stock market.  But with information you can make sound analysis.  (not same as "sound premise")

Hi @Eric Chiu

I love this question and I get this all the time.  I'm actually going to write a blog about this on my external blog site along with a derivative of it here in BP.

Yes the market is hot, in yy area, Silicon Valley, its insane right now.  I won't go into much details because its a lot that I review and analyize, but I do make my deciison base on 4 factors

1.  Local market

2.  US Economy

3.  World Economy

4.  Sentiment of the Buyers.

This might be a little too much or to some, "over" analyzing, but I do come from a software engineering background, so its ingrained in me to look at all possibilities to make the best decision.  Its a trait engineers are conditioned to have in school.

One quick way, is to compare local market regions, one area that is "less desirable" and another that is "desirable" by general public opinion.  Less desirable homes are area's that have bad reputation.  Generally these area will have a demographic of "low income" people living.  Lots of renters. If you do simple comps to look at historical pricing in that area, and compare that to "desirable" well known areas.  If the two comps gap in pricing are smaller, its a good sign your in a market people are desperate.  Which means to me its "too" hot.

Right now, in my opinion we are at this point in Bay Area.

Hope that helps :)

Love your passion in that post, that is what I like to see.

1.  Horrible experience with your mom.  Look on the positive side of it.  That event made you grow faster.

2.  Working paycheck to paycheck is a problem.  I get that.  But keep in mind, even with that challenge, focus on how much you keep vs how much you make, when i started out i made very very little money.  In otherwords use Frugality to your advantage.  One of the best traits of any successful person is "frugality".  Keep in mind this doesn't mean being "cheap"..those two are separate concepts.

3.  I encourage you to continue dreaming big.  To get that 2-5x leap in your wealth, you have to dream and seek that 10-20x goal.  The bigger the goal the easier it is to get the 2-5x which is incredible in itself.  Many times your worst enemy is yourself.   Being an entrepreneur a lot of times is very very lonely.  Self doubt always creeps in.  Learn to handle that.

4.  How to ask for mentor?  My suggestion is you follow someone here that is established, learn by asking specific questions...that in itself will manifest into a form of mentor (if the recipient is willing to answer you questions consistently or timely)

Good luck, @Zack Ellard

Hi @Matthew Vorce

I'll answer your question in the order you asked them and its great to hear you have specific concerns.  Makes answering questions easier in my opinion and experience.  You should seek professional in their field for clarity or confirmation.

1.  IRS will tax you on gifts.  So to get around this.  Provide paper documentation that your parents is indeed loaning you the money.  Setup a payment schedule so you can pay back.  I've seen this work before but you need documentation to back up.  (seek a license CPA on this)

2.  You can use Gift right away for purchasing a home, but some lenders put a threshold and limitation.

3.  If money sits in for 60 days that is considered "seasoned" money in most cases.  As of late, lenders have been more relaxed in general (this concerns me..but not right post to discuss).  Some picky lenders want 3 months worth of "seasoned" money.  But in general 2 months of bank statement is good enough.  Remember it needs to show money sitting in your bank statement for at least 2 months on each of the statements.

4. @7% its too high in my opinion. Is there a reason why you can't fully finance this yourself? FHA? Some lenders I've read are doing even less than 3% down (this worries me) but there are lenders out there now that are much more loose.