All Forum Posts by: Rob Adams

Paul I tend to agree with your conservative philosophy of modeling, but it's still fun to explore the various options and nuances of every kind of risk.

Mike, interesting idea, although in that scenario who's responsible for marketing and showing the property?

Right, which is why my question originally focused on the broker. If I can manage to do a 1% commission that leaves more like $80K in the deal, which is a little better for a $700K investment. Yes it increases the risk of doubling the carrying costs but I don't see how else this deal makes sense. 

I'm trying to convince myself that it's possible that this product lends itself to a simpler sell. It's not a super high-end or trendy neighborhood – competition to grab a house here at the retail level is fierce, it's a bit bohemian, and the buyers know full well they're dealing with a thin-margin culture here. 

OR...I could lower my offer to where it makes sense to you. 

Haha I agree 100%. Two questions: what does "don't fall in love" mean in this context? And 2) In all the stuff I outlined, costs, etc., what other areas jump out at you as the main areas to focus on to tweak this deal in my favor? 

Choosing SoCal as the locale to do my first deal ever is like learning to juggle by practicing with chainsaws. ;(

Subject property is distressed and gutted 2/1 in an up-n-coming historic area with small restored bungalows with high-end, tasteful finishes. Think college professor buyer. 

The ask is a reasonable $570K based on MLS comps, demo has been done down to the studs, footprint has been made for addition to 3/2 and 2 car garage.

ARV is a plausible $800k based on MLS comps. Rehab is $100k. Carrying costs $9k per quarter. Financing costs $3k per month. Closing costs $10k.

I'm putting up the money and obtaining the loan. Licensed GC is my brother and is running the rehab at wholesale and splitting the pre-tax profit on the flip 50/50. 

How do I make this deal work? If i go with a cheap seller's broker who does bare minimum I could get away with paying 1% when we sell...but it could drag on. Or we pay a good realtor 5% and she closes quickly, but takes 5% of an already extremely tight deal. And what if the rehab is slow and we have to carry for another quarter? 

Thoughts? 

"you need more research on which area you want to invest." 

ok, pls break that process down for me beyond "hitting the keyboard."

People I know who do this well find their niche and neighborhoods by circumstance and at the right moment in time; some admit this outright, others act like it was strategic and have no empathy for people starting out who don't have any specific factor pushing them into one specific area at the right time.

Meanwhile, I have a large area to consider, and it's not exactly a buyers market – I'm looking at all of LA County and beyond. If you think cruising around the web is enough and asking a broad range of opinions is worthless, okay, noted.

How do you go about getting in touch with a "true" wholesaler as opposed to a time-wasting one who doesn't offer true wholesale prices?

Thanks Grant. That's what I thought. I'd like to talk with you if you're up for it, I have (and also have access to) cash for the right deal and b/c I'm new in town I'm trying to talk to and meet investors and management companies. I'm in bev hills area. Reach out if you want to talk. 

I'd like to look for value add small multifamily (anywhere from 2-12 units) near LA (within 0-2 hour drive). goal would be to buy, rehab, push rents, stabilize and refi after Y1. assuming i have access to cash and contractors what would be candidate neighborhoods for this sort of thing. everything is overpriced out here but I've read this can happen in san bernadino, or possibly bakersfield. i've found it's hard to do a deep dive into a vast area, so i want to target one or two small areas that are known to have a lot of deals taking place.