All Forum Posts by: P.J. Bremner

@Eddie T.

It was irrelevant.  They only cared about the deposits for the business accounts, but they knew that I owned real estate, manage a couple rentals that were not owned by me and the eCommerce business.  They base the qualification from the deposits though, it's always about the $$$ :)

Hey BP,

I am helping my eCommerce business partner with a real estate transaction and have come across a small snag.  She used to do spec home building in Chicago back in the day and apparently there is a world of difference from there and California.  Here is what she needs:

• A trust account set up to hold the vacant lot - she pays for legal fees to set up
• Does not want her name to be searchable (hence the corporate trustee)
• Wants to buy and develop a home in the middle of downtown LA using said trust account
• All transactions will be paid for cash, so no financing needed

Thank you in advance for your help!  I'm hoping someone can offer a referral or be able to handle this on their own. 

@Kristen Jackson

Computer algorithms do not give accurate comps because there are so many variables when you run comps that are difficult to program into a non-thinking software. It is much better to run your own comps. I use the MLS, but I could do the same thing with some of the other site out there. My personal favorite is redfin. Here is what I would recommend:

• Sold properties within the last 6 months
• Within 1/2 mile from the subject property
• Within 200 square feet of living space (subject property is 1,000 then you search 800 - 1,200)
• Property build date within 10 years of subject property, 5 years either way (subject property built in 1980, you only look at 1975 - 1985)
• Similar bedrooms and bathrooms

If you run comps on these criteria, you will be pretty close.  You need to take into account other factors like attached garage, detached garage, no garage, lot size, etc.  But you can get it pretty close without looking that far in.  If you are having trouble finding comps to your subject property, I generally like to expand sales dates back first, then distance, etc.  If you have to expand your search criteria too much in order to get good comp data, then your subject property is unique and you should be extra cautious.  If you are having troubles, just imagine what an appraiser will have to do?  Above all else, be conservative and err on the side of lower estimates than higher.  The worst mistake I see most noobies make (or crook wholesalers who don't know how to wholesale properly) is that they look for specific data that fits what THEY want to see, not what REALITY is.  If you find a property and are having trouble running comps, just post it on here and I'm sure someone would be more than happy to help.  If I see it, I'll give it a shot :)  You're probably better off getting a local person's opinion if you can get that though.  Best of luck!!

@Scottie Price

Congrats on being interested in real estate!  This is very much a loaded question as it really depends on how you want to enter into the market.  Here are some options to look into:

• Buy-and-hold - Long term rental which yields modest returns each month plus tons of benefits over the long term. I bought my first house using FHA - $250,000 house that I was able to get for 3.5% down - total out of pocket was around $9,000.
• Fix-and-flip - Short term, high risk and needs a lot of money but generally big rewards.  To do this, you need to have lots of cash.  Either full cash price of the house + cash price of rehabs, or enough to make the hard money lenders happy to lend to you.  Houses I flip in my area are bought for around $200k - $300k + average rehab of about $30k, so all cash I would need around $350k to be comfortable.  With hard money, I could probably do the same with about $100k.
• Wholesaling - Short term, low risk, needs a marketing budget and the rewards can be big.  You can do a lot of the market for free, just do lots of leg work to get started (get business cards and maybe a printer - $100 all in should set you straight plus gas money).  To do direct mail marketing, you should expect to budget at least $1,000 per month to get reasonable results.  I personally spend $1,500 - $2,000 per month in my marketing.
• Working Retail - There are several ways to work in real estate on the retail side that will allow you to make tons of money while learning the business.  Retail home sales, mortgage originator, property manager, apprenticing with investors, etc.  To get licensed to sell real estate, you should expect to spend about $1,000.  Mortgage originator maybe $700, but these numbers vary greatly by the state.

My personal opinion (which may or may not be right for you, take it with a grain of salt): get a job in the real estate industry and learn as much as you can WHILE you are saving up money. For example, if you can get your sales license and partner with an investor or find a brokerage that doesn't have anyone specifically helping investors, you could fill the gap for them and handle investor clientel. Once you start to make a little cash, have 2 years of commission checks under your belt, you can get an FHA loan and buy a single family home(I like 5+ bedrooms and rent the extra bedrooms out - read up on house hacking, or buy a multifamily and do that same). Without steady income and some cash, you won't be able to qualify for a starter home.

Another option, which is trickier to do, is to find someone who is willing to sell you their home and carry back the financing or offer their property subject-to (you basically take over their loan payments).  While I cannot offer much advice on this path because I have only a small level of experience with this, I do know it's possible.

I think your best bang for your buck would be partnering with an investor who will teach you everything, or getting a job related to the real estate industry and learn as much as you can until you can qualify or find that first deal.  You will be getting paid to learn the industry you want.  Best of luck!

@Abbas Jamal Eddine

While I think most people do bring up a valid point about difficulties in living with other people, they are really only telling half of the story.  I've been in several rooming situations, even with a significant other, and it always worked out well for us.  I know that one bad tenant can ruin everything, so you just have to be cautious and make sure you select the right person.  Keep it month to month and boot the ones that don't work out.

On a side note, it sounds like a good majority of the people that are difficult to live with are on here spouting off.  If you're a pleasant person, can ignore slight annoyances and have a mature method for handling difficult conversations, then you will be fine.  I suspect some of the people are projecting their "my way or the highway" method of negotiating, which makes sense if you DON'T want someone else living with you.  If you rent a room out, you are giving up the right to privacy in the common area and your tenant has the exact same rights as you to live there in the common areas.

If you and the wifey are on the same page about wanting to make it big in real estate, then renting a room out can be an excellent way of getting started.  As long as you both are together in the decision and willing to give up a little privacy, then it shows you are dedicated to making things happen.  This is no different than the "delayed gratification" effect.  Most people would rather buy the BMW when they first get that big job, blow their money away and live in debt.  I guess being successful and wealthy does come at a price... you won't be able to stroll the hallways naked (although judging by some profiles i've seen, i'm not sure they should be doing that anyways LOL - joking).

@Joe Westmoreland

I understand your predicament, it's quite an interesting dilemma and I would like to offer an alternative way of looking at it... Allow me a couple sentences to set it up:

How much would you need someone to pay you to clean really nasty, smelly, poop-all-over-the-place toilettes?  I'm not talking about once a year when your rental unit turns over, I mean 9 - 5 job and all you do is clean someone else's $hit.  For me, I would probably do it if someone paid me $250k per year.  Any less than that and I wouldn't even consider it.  That's what I value my time as.  However, if you were to post a job listing on a web page for janitorial services, you would probably get some responses for $10 - $15 / hour (maybe even less in some areas of the country).  Think about that for a second... because it's NO DIFFERENT than what you're asking a partner for.

If you feel that 50% of the profits is fair for someone doing 100% of the manual labor, but not having to do any of the backend (financing, finding the deal, legal structure, etc.) then that is the structure YOU are willing to pay for.  Your partner may feel the same.  For me, I know how hard it is to figure out how to put together a deal in the beginning.  It's not easy to get a house purchased with enough room to make money, arrange the financing, have legal structure to protect your assets, facilitate the sale, handle the accounting, etc. etc. etc.  Once you do a couple deals, all of this becomes routine and it seems like you are "signing a paper in the beginning" and not much else, but you have to keep in mind how much work you did to get to that point.  Not only that, you have to keep in mind how many people try to do the same and fail.  You are basically taking the hardest part of the real estate business and streamlining it for them.  The rehab is generally the easiest part of a flip in my opinion, especially if you use the same materials for each project. 

My opinion, 50% is too much for doing a rehab because there are tons of contractors that are willing to do the work for much less and the quality of work is just as good.  Think about it: if you have a $30k profit flip, are you willing to give up $15k just because you can't raise another $25k for rehab??  If you have a successful flip under your belt, I can show you 10+ people who would be willing to lend you money at 15% interest for your rehab.  Let's say a rehab costs $25k and you borrow it for 3 months --> $312.50 per month x 3 months = $937.50.  So you give up $15k to save $937.50??  Maybe you can't find anyone willing to lend you the money at 15%.  So double it, pay them 30%, your cost is a little over $1,800 which is still way less than $15k.  Do you know anyone who would love to make 30% on their money short term???  It's possible to leverage your time and experience by hiring someone else to do it for you and pay them with Other People's Money (OPM).  Just another way of looking at things :)  Great job on the flip by the way!  

@Manolo D.

Ah, I misread your first post then.  Okay, sounds good!  Let's setup a time to chat and get a bid for both jobs and a rough timeline to get this started.  One of the homes will need a new layer on the roof, so possibly a little extra to pick up for ya there.  I have a guy that does roofing so I would like to get the roof bid separately.  I'll get your number from Fay, talk to you soon!

@Manolo D.

I have been reading that any contractors installing solar systems must have a specific certification.  I have attached a link, 4th paragraph down:

http://www.gosolarcalifornia.ca.gov/csi/step2.php

"Installers required to register with the California Energy Commission through its online database. Except for those systems that are self-installed, all systems must be installed by appropriately licensed California contractors in accordance with rules and regulations adopted by the California Contractors State Licensing Board (CSLB.) Installation contractors must have an active A,B,C-10, or C-46 license for photovoltaic (PV) systems. All systems must be installed in conformance with the manufacturer's specifications and with all applicable electrical and building code standards."

I assume that means that the city will not sign off on anything done unless a certified solar contractor is completing the work?  I'm more than happy using someone else if it's possible!

Also, aren't you working on Fay's property right now?  Your name sounds familiar...

@Account Closed

Yeah it is a really good return for me because I have HUGE electricity costs... This year during summer, my 3,500 sqft student home had a $950 electric bill :*( Of the 2 properties that have solar, one is using a leased plan from Sunrun that is saving me about $70 per month (annual bill is normally around $3,500 so it's a mediocre savings - I will not be doing that again) and the other has 100% free and clear panels. That house would normally have about $3,500 - $4,000 in electric costs but I had maybe $350 for the first year and $1,200 for the second (tenants got crazy with 66 degree cooling during the summer, now the thermostats are password locked lol) and the total system cost was roughly $20,000 minus the 30% tax credit. It's a legit ROI if you have the need for it. I would probably NOT use this for a traditional rental, but I cover all utilities for my rentals, so they certainly make $ense. My recommendation is to buy the system cash through a wholesaler, which there are plenty online, and have the contractor install it for you. The cost will be roughly HALF of what the big companies charge to install, and you still get the 30% tax credit.

 @Peter Ryabikin

I just had a conversation about this earlier today actually.  I am in the Southern California market and one of my investor friend said that the higher end properties ($750k+) are sitting on the market a bit longer.  I have not personally noticed it in my area ($300k - $400k) but I'm also not looking for the market trends this time of year because of how slow it is traditionally.  I cannot say from personal experience, but I have heard from several other agents/investors that prices are starting to plateau in SoCal market right now.  Let's hope the good buy-and-hold prices come back soon! :)