All Forum Posts by: Sean H.

Hi Guys,

My client and I have a project and I'm trying to give her some help, so naturally I come to BP!

She is looking to remodel the kitchen by knocking down a load bearing wall, as well as move the kitchen sink/dishwasher plumbing from one end of the kitchen to the other (about 10 ft). At first we thought that we could apply for just a load bearing wall replacement permit, over the counter. That way we could avoid applying for a plumbing permit as well. 

However the load bearing wall also has the sink/dishwasher on that side, so the inspector will most likely deduct that we are also planning some plumbing renovations and will require permits. We want to avoid this if possible. 

Our goal now is to go the civil engineer route, where we have the plans for the load bearing wall approved by the civil engineer, and have him supervise the construction. We will document the entire process and have the engineer sign off on all aspects that could cause concern. In this sense it would be just as detailed, if not more so, then acquiring a permit through the city.

My question is: What would be the downside to this? If asked by potential buyers, we could supply the documentation that the load bearing wall was constructed to code/was done correctly. Is this a feasible option? We have a family friend who is a civil engineer, and has experience in both residential and commercial capacities. 

But before going down this road,  I wanted to get some experienced opinions about whether or not this will work for re-sale. Will lenders/appraisers discount the remodel work due to not having permits vs. having engineering sign off? The house is in Orange, CA.  

Thanks for the help as always, and I look forward to your comments!

Hi Karen,

I am replying to your forum post about anyone in OC/IE looking for a good plumber while he is between jobs.

I currently have a project (Orange, CA) where I need the following. The house is on a raised foundation, so access is much easier and there won't be any foundation work involved:

1) Move the plumbing for the kitchen sink/dish washer about 10 feet (in a straight line) to the other side of the kitchen

2) Move a toilet about 2 feet, from one wall to the adjacent wall

It isn't a big job, and I would suspect it would take between 5-8 hours, but I would be very interested in getting in contact if he is available. We are ready to start immediately. Please let me know if this is something he might be interested in, and if so please send me his contact info. Much appreciated! 

Thank you @Brett Synicky for the referral. Much appreciated. 

Hi Guys,

I searched the forums and only came up with a few threads on contractor leads in OC. My client is looking for a contractor to complete a medium-sized remodel on a 1628 sq ft home. Depending on price, there will be two plans to consider:

Plan 1: Convert dividing wall (between living area and kitchen) to pass-through window, reface kitchen cabinets, remove/replace granite, remodel two bathrooms with tile on both walls and floor, relocate crawl space about 15 ft, some electrical work (may need to run new ground lines), and general deferred maintenance.

Plan 2: Tear down dividing wall, add/install large island in center of kitchen, raise window height on back kitchen wall (raise about 6-10 inches, about 11.5 ft of windows), relocate water lines (moving sink and fridge), add cabinets, pantry, new flooring throughout home, and the rest of items in Plan 1 apply. Plan 2 just has a more involved kitchen remodel.

I'm looking for efficient and well-priced contractors (aren't we all??). Does not need to be licensed, just want to see past work and can have confidence in the ability to deliver. I saw Rob Pene in another thread PM a user who had the same question, but that's the only one I saw. 

Any input/referrals would be greatly appreciated! 

Does anyone else have any insights into this? Are the investors who are buying Duplex/Triplex/Fourplexes+ only buying ones that are currently tenant occupied, so you can use their income to qualify? I could see someone using a hardmoney loan to first acquire it, rehab if necessary, get tenants, and then refinance. However with rehabbing and finding tenants, you could be looking at 4+ months, and a hard money loan with 12% on $700,000 is incredibly expensive. 

There is also the seasoning period issue, where Fannie Mae requires a 1 year period before undergoing a cash out refinance. So in the mean time I would be paying 14% on a $500,000 loan (Property is $700,000) on a loan period of 10 years, which is $5,833.33, which is just unsustainable. 

Is that my only alternative?

A "rental appraisal" is interesting. When speaking with my broker, he said never mentioned this was possible, and essentially said I had to qualify with either my personal income or actual rental income. 

I don't think that method qualifies for Fannie/Freddie loans, so I'd have to find a portfolio lender who is not looking to sell the loan. I may be wrong but I don't think that is an available option for standard Fannie/Freddie conforming loans, which has the benefit of being ~450+ basis points lower than private money lending. 

If anyone has additional experience with this rental appraisal, please let me know.

I have a question about financing for rental properties that do not have tenants at the time of sale. These can be single family homes, duplexes, fourplexes, etc. Without tenants, you cannot qualify for a Investment Property Loan since you cannot count the income from potential tenants. This leaves you with two options:

1) Try to qualify solely on personal income

2) Pay all cash, then get a cash out refinance once you have tenants

The thing is that in my area (Southern California), investment property for SFH approaches $500,000+ in the most desirable areas, and duplexes/fourplexes are $700,000+. To qualify for a loan based on my own personal income would not be feasible, especially if one already have a personal residence. And to have $700,000 in cash to buy a property is lofty.

So my question is are there any alternatives in this scenario? The impetus for the question is that the good value deals that I see are all short sales/foreclosures where there are no tenants and thus cannot rely on rental income to qualify for a mortgage. While the deals are slim, they come from time to time but qualifying for the purchase is extremely difficult without having tenants in place. 

I've read articles of people touting FHA loans and only 3% down, however without tenants in place your personal income must qualify for the loan, and with prices around $700,000 most individuals would not qualify. While it's a great idea in other areas, it is tough to pull off in Southern California. I imagine most would recommend private money lending to satisfy this need, but I wanted to see if there are any other work arounds that may be available. 10% with 2 points is an alternative, but you would still have to carry that loan for the 3-5 months it would require to fill each unit in a fourplex, after repair costs. Adding that to the down payment required, it is not an easy 3% comparable to an FHA Loan.

Any advice is appreciated. I'm trying to advance into the smaller mutlifamily market after owning a few single families, however am finding it difficult with my market. Thanks again for any input! 

Hi there, 

I am trying to help my sister with her condo in Pacific Beach, CA. She (unfortunately) purchased this condo at the peak of the market (12/2006), and is now trying to sell.  She is trying to limit her losses as much as possible, and under my advice, has decided to update the kitchen/1st floor bathroom. The space is 1264 sq ft, 2 bed/2.5 bath. Not a big job but she is essentially trying to reduce her loss while improving the space, with as little investment as possible. 

She has spoken with one contractor, and their bid from my experience is much too high. I have experience in renovations in the inland empire, and the price quoted was not even in the same ballpark. We are trying to get two separate bids: 1) to move the refrigerator from the close wall and put it where the pantry is currently, and open up the pass through window up to the ducting and as wide as possible. 2) update the counter tops in the kitchen and bathroom with granite, new fixtures.

Attached is a picture. If you guys have experience with any fair contractors looking for some extra work, I would greatly appreciate it. My contacts are mostly in the IE, and the cost would not justify them to come down to San Diego. Personal Reference is always the best way to find quality people in my experience, so I'm hoping this will be fruitful. Feel free to post here or message me privately. Again thank you so much!

@Kenneth Hynes @Mark Ferguson 

My offer was contingent on the property being delivered vacant. I have never been in this situation before so I am not sure how the lender will respond, but the listing agent and short sale negotiator didn't seem to have much hesitation about the issue. Let's hope they know something I don't! 

And two years trying to evict? I will have to check out that forum, sounds unfathomable, even in CA.