All Forum Posts by: Peter K.

@Bijish Raveendran

 Hello and welcome!  There is a great BP community here in the Bay Area.  If you haven't already connected with the following local investors, I would recommend doing so. 

@J. Martin Host a South Bay Meetup.  There is a meetup next Thursday at Whispers Cafe, near Oakland Rd and Hostetter/Brokaw/MurphyAirport Blvd. ...the street that changes names 4 times in 3 miles, lol.    More info here: http://www.biggerpockets.com/forums/521/topics/187...

As far as getting started, developing your strategy and whether to get lic'd or not....

It's easy to get lost in all of the info and different investing approaches to real estate.  I would recommend this:  Take an honest inventory of your skills, likes/dislikes, strengths/weaknesses.  

If you chunk up there are two main ways to invest in real estate, actively and passively.  Are you looking to buy and hold to generate cash flow, or wholesale (dealer) or flip?   Which appeals more to you?  Are you trying to replace a 9-5?  Or are you looking to build long-term wealth part-time?  Are you hands on?  Do you like talking to people, marketing, networking or would you rather analyze deals and manage remotely?  

Set your high level goals.  x$ / month of passive income within x years....or $250K of active income per year within x years.  Once you know what you really want...why you want it, and are honest about your strengths, and what you can bring to the table, it will be easier to see which is the best path for you.  If you are not great at setting goals, look up SMART goals.  It's a great goal setting template.   Don't forget to keep asking yourself "why?" for each goal until you get to the underlying emotional reason...this will be the fuel that keeps you going when the setbacks happen, and they WILL happen. 

As far as getting a Real Estate License and/or becoming a Realtor, I am both. I can tell you that especially in the Bay Area, where it is very difficult to find deals on the MLS, it is absolutely not necessary, nor all that helpful most of the time. I did 5 flips last year, none of which we found on the MLS.

The pros are:

- It lends some credibility (for whatever that is worth)

- You do learn what is legal, ethical and accepted practice in the area (but you can depend on an agent partner for that)

- Access to MLS, so that you can be the 20th offer and get outbid 99 out of 100 times.

I am not knocking it, and I pay my dues/fees to keep my lic active, but I'm also using it to generate income as a Commercial Loan Broker.  

IMO unless you plan on generating income with the lic or maybe are getting access to the MLS to invest in an area that is not getting multiple offers, your time/money can be more wisely invested in marketing or networking or actual investing.

You don't need a stock brokers license to invest in the stock market. 

Good luck.  Feel free to reach out. 

Pete 

I'm thinking someone had a hot date on Friday.  Should I be offended that we took a lower priority?   :-)

@Johnson H.I'm looking forward to seeing you again and hearing how the investing is going.  

Hopefully, I'll be closed on our first wholetail deal by then a la Michael Quarles. 

@Account Closed    You're probably right.  Am I too early for the next cycle?   Lol. 

See you Friday.  

Hi Johnson and Y'all.  (I heard that Texas is a hot RE market so I'm brushing up on my Texan). 

Look forward to seeing everybody on Friday.  

Thanks as always @Johnson H. For putting this together. 

@J. Martin  I look forward to catching up. 

Peter

@Thomas Kwan  Anytime!  Good luck on the project.  I hope it works out. 

@Richard Vang how did this end up?   I hope it went smoothly.   

I had a tenant complain to my propert mgr about mold, and that she was having health issues.   She was pregnant.  She even said that her doctor confirmed that it was from black mold.  

Luckily I have a great PM.   They immediately called my insurance, who payed for an inspection.  The inspector was skeptical.  They found mold but it was around the vent.   They put a humidity recorder in the attic by the vent for a few days without explaining to the tenant exactly how the instrument worked. 

They found that the tenant was taking hot showers for over an hour at a time.  Either they were romantic showers or they were trying to increase the mold on purpose.  Probably the latter.  

In the end it worked out in my favor because we were able to document the long showers, neighbors statements that the couple were getting a divorce.  Husband lost his job, etc.  they were trying to get out of the lease and milk us for payoff money.    Turns out when we asked for a copy of the doctored note, it simply stated that a possible cause of her coughing could be black mold.  It was very general.  We just let them out of the lease, but kept deposit because of the repairs needed after they moved out. 

I would be very careful to handle these kinds of situations professionally.  It could mean the difference between a successful investing career and bankruptcy.  

@Jeremy Tillotson   Well written.  I know that a lot of flippers use handymen and day laborers instead of lic'd General Contractors.  It can be very risky, sometimes more expensive in the long run and often turns out inferior product.  

As you mentioned having to redo the same work again, because of inspectors calling something out, or a buyers home inspector's report, can cost even more than doing it right the first time. 

If I were to do a lipstick project, I may consider hiring a couple of lic'd subs as a homeowner.  But our projects are usually studs out rehabs and we definitely use General Contractors. 

The trick is finding a good, affordable contractor.  Not easy but worth the time investment. 

As for the timeline, I agree with @Adam Anderson    I haven't done a project in the San Jose city limits but in the surrounding cities, counties I have had pretty good success getting someone in the planning dept on the phone to answer basic questions like time frames.   

I would also check the San Jose planning depts website.  Some have an FAQ that will give a step by step overview of the process.   If not, you'd have to go wait in line and ask live.    Or ask an experienced local contractor.  They will know.  

Hi Thomas 

Good to see another South Bay / San Jose member on BP.   

The answer is...it depends.   Haha , don't you hate that?  It will depend on things like, are you adding s.f. on the same foundation, or need to expand foundation?   Are you in the city limits with sewage or septic? Etc.  

I usually spend between $30-50 per sq foot for a major, studs out rehab.  This does not include adding square footage.  But it does include moving walls, adding beds or baths within the same footprint, new everything including kitchen, baths, floors, permits, etc. 

Cost of adding adding square footage can vary dramatically but in San Jose for a median priced home, should range between $100-200.  Things like high end fixtures, new driveways, can add up really quick, so beware of any major expenses. 

Having a couple of contractors bid the job would be most accurate estimate.  Or if you just need a quick estimate to see if the numbers work on an oppty you could use the following...

Existing sq ft x $40-$50   

Plus additional s.f. x $100-200 

This should give up you a conservative range that you can probably improve on.  

Good luck!