All Forum Posts by: Jason Mak

@Mike B.  Mike, thanking you again a year later.  I did look into what you said about applying the tenant payments to everything else on the ledger first.  Unfortunately this wouldn't hold in a court of law in California.  However, I can always try it and re-adjust the ledger as a threat to the tenant and deal with with the ledger later if I have to evict and go to court, hoping that it doesn't have to go that far. 

  My problem is that I have a large complex and I don't want word getting around that tenants can avoid paying the RUBS without recourse.  

Hello BP and all commercial guys

I own retail property and have been talking to potential tenants about a vacancy.  I'm considering to hire a leasing broker to help me navigate and negotiate the lease.  The leasing agent obviously doesn't have to spend the time marketing and showing the property but I would be leaning on his expertise and market knowledge to get the best least possible.

How much should I expect to pay the leasing broker to help me negotiate the deal?   

Any advice or experience on this would be helpful.  Thanks

Hi Brant,

I don't mean any disrespect from to all the agents out there but what type of investor are you and have you bought/sold many properties?  Are you good at sales?  If you've done it a few times and you are comfortable with the process, then why not list it yourself?  There are a lot of value adds that an agent can offer but I would argue that if you put in the time and are resourceful, you can certainly do a lot of the work yourself. The commission you pay will certainly dig into your profit so you just have to be honest with yourself and ask if you can do it yourself.

Hi Matt,

Very interesting.  Quick question - what's the difference between Sober Living Homes and just renting out rooms to conventional tenants?  Does your friend have a particular source of tenants (such as a sober living program) who were willing to pay $950 per month to share a room?  And do these tenants have sponsors or people paying their rent?  Otherwise, I don't see this any different from just having a house and renting out the rooms to random people (provided that you can get them to share a room).

I've seen strategies like this for disabled individuals and folks who just get out of jail as well.

Jason

You aren't necessarily trying to get a better interest rate though that is a major motive.  You are just pulling cash out of the house and using that cash to reinvest (the final "R") in a new property.  That's the basic strategy and how you can keep on building value in your real estate portfolio over time.

I'll give it a stab Rickey.  Keep in mind, i might be missing an "R" definition but i think this should get the point across.

Typically after you renovate (the 2nd "R"), you will be able to rent (the 3rd "R") the property out for a higher price.  This will increase the value of your home.  So when you got to refinance (the 4th "R"), you house is at a higher value then when you bought (the 1st "B") it and you can get cash from the bank via refinance. 

Here is an simple example:

You buy a house for $50,000 with $25,000 down, 50%.  After renovating and renting the house out, the it is now worth $100,000.  You refinance the house now with a new bank.  Let's say you take a new loan at 75% loan to value.  So you the new bank gives you $75,000, of which $25,000 is used to pay off the original loan.  The remaining $50,000 goes straight into your pocket.  

@Celia Chu 

You are most definitely welcome.  I have learned a lot from the bigger pockets website so I try to return the favor.  I agree, trying to talk to many local brokers off of loopnet is no fun...there is a lot of attitude out there!

@Jessica Zolotorofe Thank you for your response and yeah I definitely see your points.  

@Tim Ryan  Love the motto!  I agree, LA doesn't make for a good place to invest and I haven't bought a deal here in over 2 years.  My last deal was this deal out in Riverside but since then I haven't been able to find any new deals.  

I've began to look out of state but haven't taken the leap yet so to speak haha.  Many of my partners have been doing for several cycles and have preferred to stay in the coastal cities.  I'd love to hear more about your process and system of investing out of state sometime.

I see you are from Arcadia.  I live in San Marino but I'm redeveloping the former All Pro Fitness site at 56 East Duarte so I'm in Arcadia all the time.  We should grab a coffee sometime and trade notes.

@Jessica Zolotorofe  Hi Jessica - Thanks for taking the time to give me a detailed response. 

What you said about due diligence, financing contingencies and non-refundable deposits are pretty common place here and in line with how I've executed most deals in the past.  Unfortunately, in my market, these terms are getting squeezed as you mentioned.

However, I raise this question because in listening to BP podcasts and reading about "creative financing" other creative deal structures on BP, I find them hard to believe they can be done in the SoCal market. 

One example is wholesaling, I've seen it around for smaller residential properties, but most commercial owners with a moderate level of sophistication would never allow their properties to be tied up by a wholesaler when their are willing cash buyers on the market.  Same with land buyers who try to buy offers "contingent on entitlements". 

These types of deals are talked all over BP podcasts and the forums which begs me to ask if anyone in large high-demand metro cities such as Los Angeles or the NY/NJ areas are actually able to "tie up a seller" using such deal terms.