All Forum Posts by: Sergey Tkachev

Welcome to BP!

Wow, thanks for the quick responses, I really appreciate it!

@Derek Daun - thanks so much for that idea, going with the multi option is something that seemed more risky initially, but it does make sense, especially if that area is mostly a rental area.  That gives me something more to think about ...

@Jake Weir - thanks for your input, lol, what a coincidence that you know which property I'm talking about :).  Yeah, the individual I talked to did mentioned the duplex to condo conversion across the street (although I think he said it was a 4plex initially, or maybe that they split into 4 condo units).  I'm definitely interested in learning any more info you have on the area, I will shoot you a message!

@Gordon Cuffe - thanks for your input as well!  Yeah, I realized later that I did not press enough to find out what they wanted to for the property, I'm meeting them again and will try to find out.  And I've had the wholesale route as an option in the back of my mind, but looking to be more involved in the deal/project.  But that's still an option, I will keep it in mind and let you know :)

Thanks again for all of your input!  Anyone else is welcome to add their thoughts/experience :)

@Derek Daun, does the insurance company know of the visual damage to the garage roof or were they just concerned about the tree limbs resting on the roof, which you have already taken care of?  If it's the latter, I would just take a picture from the distance of the tree and garage so that it can be easily seen that there are no limbs resting on the garage roof.  

If it's a fire insurance policy we are talking about, then their main concern is that you don't have anything resting on or close to a structure (such as a tree) that can cause damage in case of fire, etc.  

In my experience, they are mostly looking for evidence that all potential hazards have been mitigated and the best way to give them comfort in that is to provide good photos of what has been taken care of already.  In that case, items like 10% wear on a roof can normally be looked over as insignificant compared to all of the other significant items that have been addressed.

I wanted to share my first yellow letter potential deal and get feedback from you guys on this scenario...

I received a call in regards to a yellow letter I sent about 3 months ago, the caller is a close friend of the owner, who is 70yo, has power of attorney and is trying to help him sell the house.  The house is an old 1900 Victorian'ish house in downtown Sacramento, had a partial fire, has been gutted on the inside, work was partially started but then stopped due to lack of funds.  

Current condition: inside is about 80% gutted, has an illegal addition attached to it that is probably cheaper to tear down (it's in really poor shape and not built well) and rebuild than make legal, has a finished basement unit with kitchen but it's illegal, city wants it returned to basement/storage.  Most of exterior and structure seem ok but it pretty much needs a full rehab, from roof, to electrical, plumbing and so on.  Built in 1900, 1300sqft, has high ceilings (10ft?), can be brought to it's original character.  Garage can be added in backyard.  Rehab is at a minimum $50-60k without any additions, if I manage it myself.

Coming up with an ARV has been somewhat tricky - the property is in the Mansion Flats area of downtown, which as far as I understand, is not the best and not the worst area, but more of an improving part of downtown Sac. There are rental fourplexes in the same area, as well as condos converted from 4plexes. The owner may consider owner financing. There is a current mortgage of around $200k and they are looking to catch the existing equity above that 200k. They haven't really stated what they are looking to get.

The options I see are: 1) Tear down illegal addition and add a new one to expand the current 1300 sq ft to 2000sqft or so, add a garage in the back (there is alley access) and return downstairs to basement.  This has potentially more profit but more risk than (2).  2) Remove illegal addition and restore the original 1300sq ft, return downstairs to original basement and possibly add a garage in the back. 3) Turn it into a multi-unit, and either rent or sell - selling units individually would seem to make most sense (as opposed to renting) but this is higher risk for me as I have not had that kind of experience before.  Exit strategy in all cases is to rehab and sell.

Because I'm not confident on the ARV, my thoughts are to potentially work with the owner on sharing equity after rehab, i.e. - offering a low price and an equity share of profits at sale. This way I can potentially purchase at lower cost initially and have less risk of putting up too much money. At the same time, owner has a potential of making more on final sale of ARV (hope that makes sense).

I'm open to any other ideas and input, maybe from someone who knows the Mansion Flats/Downtown area well.  Pretty much looking at all my options.  Apologize for the long post, I probably missed something so if something doesn't make sense, let me know - I tried to summarize as much as possible to keep it short. :)

Just an update - I won't able to make it October 16-29, hoping the meetup if one of the other days if it happens in October :)

To me even $9k sounds a bit too much, assuming it's a basic shingle roof.  

I'm a big do-it-yourself'er but I still have my agent sell my flips, even though I have my own license.  The reason is she knows the market, has connections with other agents, stagers, etc.  And even it's a good piece of the profit that goes to the agents, I've found it's worth it because the house sells quicker and for a better price than if I had tried to do it my self.  

I'm not saying you can't sell it yourself, but sometimes it's worth having an agent do it for you (and sometimes it may not be).  And in the higher end price range it's even more important to have an agent help you sell it for best value.

Congratulations!!

@Gregory Jay, whether you decide to tackle a flip or a rental first, you'll need to make sure you have a good team that has strengths that will cover your weaknesses.  The biggest thing is you'll have to take the first step for anyone to want to do business with you and you have to be able to offer something.  So if you have financing you can offer, you are likely to find someone to partner with.  Or maybe you have rehabbing experience, etc.  So pretty much you have to bring something to the plate.  

Or if you want to tackle a project all by yourself, you have to be ready to really hussle and do what it takes.

Your determination and dedication will be the ultimate factor of your success :) 

Welcome to BP!