All Forum Posts by: Account Closed

@Terrell Garren, that sounds more familiar, but I'm working rural Northwoods, not the SFV. I'm doing 1-5 split right now where the county fee is $1260 plus the cost of a survey. I'm expecting about four months once the application is submitted. 

You need a civil engineer to divide one lot into two? You can't just do it with a survey and an application? 

@Bjorn Ahlblad, what is a 'tax catch up?'

Hi @Jeremy Fiest, How’d it turns out for you. I’m working on my partnership agreement now and I’d love to hear about your process. Thanks!

Hi @Randy Stuart, I don’t see any responses to your query. I’m trying to figure this out myself now. How’d it work out for you? What did you decide to do?

@Solomon Kim First, very smart on the Rich Dad Poor Dad read. I’ve only recently read it and have been intentionally investing in RE for 7 years. It’s a great book.

So, what I mean about being flexible is this rule that "You make all of your money when you buy the property." That's not meant to be taken literally, but it stresses the importance on getting good really good deals so that you maximize your ROI. Most of us on here have made mistakes early on that resulted in less than ideal returns. My deal like that was my first land deal, which was 40 acres split by a tributary river. The property also had a highway easement running through it. I thought I was getting a great deal, but I didn't understand important things like setbacks and topography back then. Ultimately, I figured out it wasn't as valuable as I thought, so I got out at a little more than what I paid for it, but with taxes, holding costs, and fees it was a net loss.

While you’re stacking your chips, sharpen your tools. Start analyzing deals and get smart, super smart in the market and type of investment that interests you. This is crucial because when you get smart, you might find a deal that you can’t pass up, that’s why you have to be flexible. Some people feel like you ‘just got to start somewhere,’ beginners don’t have as much room for mistakes. Be patient, be smart, be flexible, then pounce when you see the right opportunity.

@Solomon Kim I’m not sure what situation permits you to live rent free or how much of a drag that must be, but every month you live rent free, you are investing. I lived in a camper for almost 2 years at very low cost, which allowed me to pay off a mortgage on a rental, then I remodeled it and sold it, which really supercharged my next investment. It’s best to set a goal, an amount you want to save and a date you want to save it by. Make sure it’s flexible because you have to be ready if the right deal comes along. The right deal is very important, especially for your first one, because you need some room to make some mistakes, and trust me, everybody makes a few.

There's a lot to unpack with your post there, @Rob Massopust, and I agree with a lot of it. However, on your last point I think most people in this venue will disagree with you. I see you're from California so you might be looking through a straw alittle bit, you think? Where you are at the market is saturated with investors, it is the most populated state and still among the 10 fastest growing populations in the nation. Investors are not to blame for the housing shortage. Municipalities who have failed to zone properly and large corporations, especially in the Silicon Valley, own much of the undeveloped real estate near the highest paying jobs. Look, nobody is required to stay in California, so I'm just not buying the 'investors are to blame narrative.' Finally, there is already a great deal of evidence that millennials prefer the mobility that renting offers. Despite interest rates at historic lows, young people prefer to spend their money on experiences instead of locking in a 30-year liability that comes with a traditional mortgage.

I recently cold emailed an agent about one of her listings at about 8am. I didn't hear anything back after a few hours, so I called her. She said she was a full-time school teacher and I just happened to get her at lunch. I said not to worry and give me a call back later. She did not call that day. The next day, she messaged me to see if we could arrange a time to chat. My schedule was tight, but I had about an hour free at the same time she was free. She did not call and later messaged me that she was "with a student." I was very frustrated because my question wasn't that difficult to answer, but did require a dialogue that doesn't really work with email. I was disappointed too, because I love teachers and I know they are not paid enough. I thought it was really great that she was pursuing real estate as a side hustle. However, if you cannot be reached most days of the week, you are costing yourself money and more importantly, you are costing your clients money. I would be hesitant to hire a part time realtor. Though, I really like what @Joseph Ranola wrote. I think he did a good job of managing expectations and was fair to all of his clients (including himself). 

New to BP and I guess I didn't know there were different forums. I wonder where I was posting my questions...Anyway, thanks @Andrew Postell, learn something new everyday. @Kim Handelman, I have an alert set up for 'subdivide' so your post found me. I'm working a subdivide right now that has some similarities. It is all waterfront, will be 5 parcels and has an existing structure on it. 

My thoughts are that your deal doesn't sound that complicated to me. You've already reached out to an engineer, so you have a good idea of what you can do. So, I don't think you NEED a developer. A partner, another investor, perhaps. What I plan to do is immediately subdivide the property and sell off three of the lots. Conservatively, this will return everything I put into the deal, plus cover all the rehab costs of the home. Then, my profit is the home and the additional vacant lot. I plan to be in and out in 18 months. 

The big items you have to worry about are access and utilities. In my county, anything serving 10 or fewer lots can have a 'private road.' That's good for me because there are almost no restrictions on private roads, it's more like 'recommendations.' Since it is well and septic there are a couple of things. I wouldn't drill any wells or put any septic tanks in, but you can at least check to see what it costs. Some counties will also have a 'well index' where you can check all of the surrounding wells to see how deep they are, gpm, etc. That will give you an idea of the cost. Perc tests are not that expensive and it is something that you would definitely want to do. You should be able to get one done on all five lots for $1500-$2000 if you do it at the same time. You can reach out to @Greg Dickerson, too. He is a developer and answered some of my questions including a quote on a private gravel road of $5-20/linear foot. 

$900k sounds like a huge number, but the property is already returning $4600/month. That would cover a huge chunk of your payment. I think you can do this on your own and make a killing. What sort of financing options do you have? Good luck!