All Forum Posts by: Drew Leo

I'm a fan of ADUs, and through my research, you may want to try a Modular GC who works with a factory to get you the dwellings you need.  Unlike what we think as traditional ground up custom buildings, Modulars (not manufactured trailers) are factory built and approved by state standards (usually higher and more thorough that local regulations).  Consider them as doing this type of building weekly with 4-8 homes and getting them approved with the same state inspector at the same location year round.  Most average cities don't know what the hell they are doing or saying because they don't see ADUs except for 5x a year and simply deny them.

My tour and research of a company called US Modular in California has the GC getting the feasibility study done for $3500 (used as a credit towards the build but is a fee if you don't move forward with build).  Essentially this is 90% of the round map of how they and you will build this dwelling.  There are a handful of local criteras the company will abide by but I was told if the state regulation that they can build to specs are legal, their modular home will trump the local rule.  I was skeptical because it boils down to if I'm willing to battle with locals even if they are wrong.  

If the success rate that this business claims as 90%+ building ADUs for their customers is true, I can see the optimism.  I understand the huge unknown but there maybe few and unique builders out there that are putting these things in the ground.  They figure out the rules, they know the state rules, the GC puts the foundation in, while the factory builds the 1600sqft building in 4-5 months, drops it in and all is complete in 2 days.  Happy learning!

Ditto.  Enjoyed the purchased audio and have been searching to the appendix/bonus features.  Please forward me all the info that everyone is getting. Thanks BP

FOUND IT.  Disregard request

Its a tough situation however you are looking for more options.  I say try other means to secure collatteral because the down side to the tenant is they get evicted which is a reality they most likely accept.  Maybe you can have them transfer ownership of their vehicle to you now, and when all is paid and up to date, you can transfer it back (all fees they pay for).  Yeah yeah...all the wanna be lawyers will say it's tangling more into the mix.  This is just a brief suggestion to get something in the likihood they fail to catch up; then you have some up side.  

Of course draw up a contract or get a 3rd party involved to accept the vehicle.  Probably don't take the vehicle or a court will assume it is to pay for the rent (you just want something as collarteral AND encouragement for them to pay).  Most of the other suggestions provide no extra incentive or positive to you.  

Hell, say you have a friend who will buy their veh for $3K under value.  Transfer, pay him out (your "friend" that is), have them agree to put into an escrow account for payment only for monthly rent.  

This may kick the can down the road and is no guarantee but it's an option.  Some Pawn brokers may even help, they receive computers, equipment, car and once the parties are square, they pay for items or return at a fee.   Wierd and scares some people but I'd be more scared not having another backup option.

Buildium has some high rankings.  Today I emailed them for an extended longer training period.  I don't have the need for it now but I explained I rather be trained and then implement it seemlessly.  

Nice Joe.  I owe you for the words of wisedom and I should be clear minded to evaluate w/ science when it is necessary and apply my situation to the deal. Walking away is 100% money in the bank.  Now change your photo and smile. 

About buying the biggest/or bigger houses in the neighborhood, it wasn't my intention however this foreclosure has been on the market for almost 3 months, the value vs investment produces great & fast equity.  

When I remove my financial situation, opinions, wants, budget, personal basises as much as possible, the equations reveal positive value that I haven't been close to getting with my other research & investment hunting.  I hope it's wise to say " If my bank account was 200% what it is now, would this be a good deal not to pass"?  I think it is a good deal.  

I am on the fence about comparing comps strictly to the units inside the complex. Although I admit it's the only true way but doesn't most comparables done in an area wider than a few houses from the listing property? It's customary to measure against sales several blocks or even miles away? Looks like its way too strict perimeters to say appraising is only done against the properties next door or in eye sight.
After 36 hours of my post, I am concluding this is a very viable prospect for my 1st investment.  Not to worry, I've been running, rerunning numbers, scenarios ***Thanks for reminding me build cost over runs!***

I'll keep taking any evaluations and always thank those that open my eyes and kick me to wake up! Laugh. Thanks Joe V.

1st investment on a Foreclosure of a 1 detached home in a 8 house complex in Santa Ana, Southern California, 2000sqft (larger than average for popular Southern California), built 1994, 4bd/3bt, very convenient to multiple markets, stores, one of the best I've seen, 70% Mexician population, B neighborhood.  Listed for $440K , will try for $405K bid: add $35K rehab (got quote already from 2 contractors who toured the house w/ me so I'm quite sure of the cost) + $5K closing brings it to $445K all in. The conservative comps are $525K for similar homes not rehabbed in the area.  So the instant post rehabbed value is a healthy $85K.   I need to bring $115K cash (down, rehab, etc) to bring this property to rent condition.

 $1800 monthly mortgage + $900 expense (tax, $200HOA, insur, vacancy, 8% mgmt, etc) = $2800 above average expenses.  Rent will likely be $2600 = operating -$200 monthly.  

Concerns:

- 2 months rehab + 3 months to rent = 5 months x $2800 = $14K

- $14K + $115K cash already put in = $129K , I have $145K in savings so 88% of all my money to operate at a loss. 

- selling after 1 year (6% sell commission, 15% tax, etc) will reduce $85k added equity to about $15K profits.

Is the big increase in home value worth the risk of so much of my funds?  

Does the after rehab value large enough to accept the high initial investment & negative monthly cash flow? 

I am familiar with a niche type of property mgmt, more like personal assistant services.  It's taking care of higher end clients and their personal properties (think vacation homes, a relatives house, errands, etc).  It's like being the manager for the  #1 real estate broker in town ; handle his/her cars, both investment & personal houses, sign and verify construction work, etc.  Because my business focuses on wealthier demographics, 60% of my efforts goes to less than 10 homes and I delegate the remaining 40% to my staff of 2.  It is a 24-hr, 7-day business and every month there's issues but man the freedom and I love moving about, getting the sun and sweat on me.  Healthiest I've ever been and that's after years of office, law enforcement, consulting, military. The mileage I do on my van a week is like 180 miles because I barely get on the freeway; my properties are highly focused near me .  

If you have light construction knowledge, I say try it out in Denver or where ever you can.  We've all heard good handy man or general contractor is worth their weight in gold.  You're established in your world now, you can experience other things so go for it.  The obvious risk is another 5 years on that 2 hr commute and doing something you haven't show more than %2 learning growth from the previous year.  Learn my investors.  Keep hungry for knowledge AND experience.  

In summary you are NOT lacking equity, funds, stability, better housing.  The highest risk is doing the same thing and not doing something you have interest in and may love.  Property Managing may pump that blood in your veins by knowing it's a living thing with faces, families, working on the facilities, something with your hands.  

Mr KH:  Your info and response is Golden.  I can begin to see how people can and do help each other out.  My recent journey on BP keeps me finding 2-4+ years aged information (like this tread) than anything useful.  Looks like I have to be actively involved to build the community and rekindle threads.

The photos I've seen appear to have missing stucco & staining along the bottom exterior walls (that back alley garage) that make it look like nothing but aged rotting which likely will invite termites.  Local agent responded that they are asking for cash offers only. 

If I can be as successful as you in Fresno, do you recommend I grow a stache and don dapper bow tie?  I'll do it.