All Forum Posts by: Miguel Rivera

@Morgan Wallace, I didn't. I was able to finance it with other funds. Sorry for the late response !   :)

Hello BP community. Has any of you used a promisory note to pay part of the downpayment for a small multiplex (3 units) ? Any problem you have encountered doing this? Thanks

@John Timber. I have been investing in Imperial County, CA (Calexico area) for 3 years and if you can do a flip in Indiana and get $1300 free and clear my recommendation for you is to accept the job in San Diego and continue flipping in Indiana. Get a reliable good handyman or contractor, pay him well and manage the rehabs from California. Even if you have some issues at the beggining it should be worth it. Even though Imperial is not as expensive as other areas, it is extremely difficult to get a $1300 cashflow. I have been able to get $300 per unit in California as free cashflow and it has cost me a ton of work (I also have a full time job and a small business). You might have the best of both states, the income from CA and the cashflow from Indiana.

Thanks for the tips Pete. I invest mainly in Calexico but I am considering Imperial as well. 

Thanks for your insight @Ned Carey . Yes, the developer will most likely use the year to find the financing from a pool of investors. Although the buyer has not offered it, I am even considering participating as an investor where I put the land for the development in exchange for a percentage of the profits of the rental properties. Not sure yet if his is a good idea. 

Hello BP members. I own a lot of vacant land of 9,000 sq ft approximately in a zone that is authorized to build a triplex or fourplex in Southern California (Imperial County area). It is a zone with almost 100% occupancy rate for rental apartments since it is very close to the border with Mexico.

I have been trying to sell this lot through my realtor for one year at a price of $90,000 since similar lots have sold for $95,000. 

I have no rush to sell the lot though.

Last week, I received a Letter of Intent to Purchase from a local developer to buy the vacant land with the following characteristics:

1) Purchase price is $90,000 (this is the full asking price) 

2) Initial deposit of 10%

3) $80,000 seller-carry financing, 12 months, 6% interest all due upon maturity.

Please comment on the following questions I have, since this will be my first sale of real estate, an also the first seller carry deal I have:

Quesiton 1: I think the initial deposit is too low for vacant land, I am thinking in making it at least 40% of the asking price.

Question 2: I think the interest is too low for seller carry , I was thinking more around 8% to 10%.

Question 3: The buyer is interested in developing apartments, so I think 12 months is too short , I am willing to provide an 18 or 24 month carry back, especially with a higher interest rate.

Question 4: What information should I ask to the developer to "approve"the seller-carry?

Question 4: How can I protect myself in case the developer starts building and asks for a loan , and such loan is in first position and they default for any reason? 

Thank you in advance.

Hello Diego. My recommendation is that you go to the City council planning department and ask to speak with the supervisor. Before you go, do your homework and read the city ordinances that you can have in the city website. Those ordinances will indicate the minimum lot sizes that are required. If such minimum lots required are larger than the 2 individual lots you want to have it might not be possible to sell as separate units. Hope this helps. Glad to see another person from Calexico. I believe we are the only 2 persons from Calexico in BP! 

welcome Ruben! 

Thanks for your comments @Kyle J., @Brian Garlington, @Ed Nelson. 

I am considering keeping the tenants in place that are on section 8, but I also wanted to know the process for terminating their contracts as an alternative.

This will be my first apartment building in section 8. Existing rents in the 4-plex are very low, currently at $775 and I know that market rates for a remodeled unit can be  $950 as a minimum because I own another building only 3 blocks away and I am charging $950 for a two bedroom (the units in the 4-plex are three bedrooms each). I also own another building two blocks away and I am renting a three bedroom unit in $1200.

My concern is that the Housing authority won't allow me to rent the units this high. 

I found a sweet spot for nicely remodeled units. Nothing too fancy, just imitation wood ceramic tile with stainless steel appliances and nice shutters, but there are no units available in the market with these characteristics, so I have had up to 23 people going to the open houses and my units normally rent in a couple of hours once they are remodeled. 

Again, thanks for your comments.

I am considering buying a 4-plex in California that currently has section 8 tenants. Each unit is being rented at $825 and I know that improving the units I can get a rent of at least $975 per unit. 

Can anyone please help me with the following questions:

1.-What is the process of moving out the section 8 tenants once their lease expires so I can remodel the units and charge $975 per unit to non-section 8 tenants?

2.-Can rents be increased for section 8 tenants?

Thanks.