All Forum Posts by: David Friedman

It really depends on what deals are available in your area and what return your competitors expect in your market.

If you plan to live in one unit and rent out the other unit, then it is just as much a personal decision as it is an investment.

Are you choosing to live in one of the units because it gives you a good location to go to work or go to school?

As far as the investment side of this deal, have you compared it to what other 2 units in the area of the same condition are selling for?

Maybe this is a good first deal for your level of financing. It is not easy to get into a home with FHA financing when you are competing with cash offers. I suggest you do more research on what other 2 units are selling for. Ideally, you'd get this deal for below market. It really depends on the market though.

If your contract is contingent upon them evicting the tenant, then you have all of the power in this situation. You are in the driver's seat. When this happens to me I usually do one of two things:

1. I tell them I won't let escrow close until they evict the tenant. How they do it or how much it costs them is not my problem. They cannot cancel escrow if you have done your part of the deal, but they haven't done theirs. (I usually take this option if I already know the tenant is going to be hell to deal with).

2. Offer to take on the tenant at my own risk if they credit me or reduce the price. Several times, the seller has chosen this option just to be rid of the head ache. I used this method on a $155,000 property in San Bernardino, CA and asked for $5,000 off to deal with the tenant after the close of escrow. It ended up costing me about $750 in attorney fees and one month to deal with the bum tenant. I was able to add value to the deal by taking care of the tenant myself.

It sounds like you need a new property manager or some better boots on the ground to help with your rentals. If they cannot handle the repairs that the city is requiring, you could probably call a few contractors yourself using Yelp or other websites and see if they can do the work.

I had a landscaper do a job in San Bernardino that I never personally saw in person. He took pictures along the way and provided many references to me before I gave him the deposit to start the work. You have options. Hang in a little longer.

You should talk to your broker. Many brokers won't charge you a split if you are buying the house for yourself. Depends on what kind of relationship you have with your broker.

It sounds like a bad deal honestly. At best you are paying full market value for a property that is non-conforming and needs work (4 beds with only 1 bathroom).

At worst, you are paying 10% interest (Higher than even most hard money lenders) and you are renting to your friends (It's best to never mix family, friends and business).

If your friend stops paying rent, do you feel comfortable kicking them out?

It sounds to me that you need to keep networking. There is no such thing as a perfect investment house. If you've had the opportunity to walk the house several times and it hasn't sold in-between, that means other investors are passing on it. You should be asking yourself why is that?

Now, if you are buying this house from the viewpoint that you will be living in it and the location suits your lifestyle, then that is a different story. I wouldn't call this an investment in any sense of the word. It's more of a personal purchase.

Are there any investors out there investing into Opportunity Zones in California?

My company submitted several tracts in San Bernardino that were approved by the government and we are now focusing our efforts to buy in those zones and improve the property. My partner is an accountant familiar with the new tax codes that were recently released by the IRS, but I still have yet to see investors discuss this method.

For those that do not know, if you invest in a business or improve real estate in an area with poverty levels 20% or greater, you can completely write off your capital gains in 10 years if you decide to sell the property.

I am looking to develop 40+ units on approximately an acre of land in California. In the past two years, I've started to see a lot of new modular construction startups in California. I am considering using a modular construction company to build these apartments, but so far, most of them seem to be focused on ADU or luxury modular builds.

Does anybody have experience building multifamily housing? Was it more cost effective than building on-site? Do you think the future of construction is going to be modular (Built off-site)? Why or why not? Other states can pitch in as well! California has notoriously expensive costs to build.

@Paula Wallace

Your posts sound like advertising to me. Are you being paid to make these posts?

I've never heard an investor say: "Terms don't matter to me.."

Your posts are misleading. Any new people to real estate, be careful of people like this. As for the company you are hocking, I cannot speak for how good of a HM lender they are, but if they did pay you to make these posts, you're surely hurting their image.

Hi Adam, I noticed on your profile that you are a real estate agent/broker.

You're in the same place I started 7 years ago. I'm sure you have showed clients a home that they thought was disgusting, but with a little vision could be turned into a great home. Those are direct opportunities that you could be taking advantage of. Maybe nobody else sees how to add value to a property, but since you are touring properties every day, you might catch a diamond in the rough.

That being said, do NOT limit yourself to the MLS. Most deals happen before they reach the MLS. Do research on what a real estate wholesaler does and start to network with people who have wholesale deals. Create your own deals by talking to agent friends that may give you the inside scoop on a house before they list it publicly. There are always deals to be found in any market. If you aren't finding deals, then you should focus on networking more.

Hi @Matthew G. Welcome to BP!

I notice that you are from Pasadena. I'm currently in Toluca Lake! We are about 10 minutes from each other.

What is it that you are looking to get out of the BP community? Are you looking for your next deal? Looking for partners? Looking for a construction team?

Would love to hear more about what you have accomplished in your 6 years of investing!