All Forum Posts by: Tim Ehlers

@Charlie Fitzgerald

Thanks for the follow up, I checked out your website and will definitely keep you in mind for any upcoming projects.

@Sean Richway

Sean, I got your email with all of the info.  It looks great...Are you local here in San Diego?  I emailed you direct, hopefully we can meet up in the near future.  Thanks!

Can anyone recommend a good portfolio and/or investor friendly lender in the greater San Diego area? I am looking for financing of single family homes for terms up to five years. I personally will not qualify for standard FHA style financing so I am looking for lenders who will lend based on the asset and LTV, possible through in-house loans, lines of credit, blanket loans etc.

I will be using short term private financing and hard money to acquire and rehab the homes, then I will be leasing them out with a purchase option and need the financing for the duration of the lease option (1 - 4 years).  Thank you very much!

Hey all,  Flipping a house in Paso Robles, CA and am looking for any recommendations on good (and cheap) sub-ontractors in the area...  here's what I need:

-Painter

-Roofer

-Counter-Tops (granite, Quarts, Laminate)

-Concrete

-Electrician

-Flooring (tile and hardwood)

Thanks, any recommendations wold be great, not just limited to above ;-)

Paso Robles, Atascadero, Central Coast, San Luis Obispo, Morro Bay, SLO, Templeton

Hey everyone, I am working on an off market probate deal in Paso Robles, CA.  The numbers are a bit tight and I need some advice on what to do with the pool.  

The house is in a lower income neighborhood with an ARV of about $325K. There is an existing pool that is empty but appears to be in working order. It has a lot of wear and tear but probably would work if just cleaned and filled. Here are my options and if anyone has any further experience please let me know. The neighborhood does not need a pool to reach it's ARV, it really adds no value to the price of the home...

1.  Tune it up and fill it.  Probably $1,000 in money to do this.  My question is does it need a fence or other protection to meet insurance requirements?  Adding a protective fence would add another $3,500.

2.  Fill it or build a deck over it, either way would be about $5,500.

3.  Don't touch it, leave it as is.  Still may need a fence around it?  

Has anyone had any experience with this?  Thanks!

Zach, I would say closer to 3% is pretty standard. Where are you looking and what price range. I am a new agent/investor in the area and would be happy to look anything up on the MLS for you, just PM me. Good luck!

What does your lease option agreement allow you to charge? Did you take a non refundable option consideration or a security deposit that needs to be returned.  

Can you clarify what you mean by "master lease option?"

@Wayne Brooks

Thanks for the reply!.  I should clarify that I work for an independent Broker so it is just her and I.  She has been an investor in the area for over 20 years and runs a very successful meeting group for investors, we are doing property management together and I am assisting in finding investment properties for her however I also want to supplement my time and income by working with home buyers...I just love it!

So, I will be needing to contact outside agencies.  I want to volunteer my time to help them sell their listing as fest as possible while a the same time building my database of potential buyers/sellers.

Hello all, I am a new agent in the San Diego area.  I love the idea of offering my time to perform open houses for other agents in my market in order to practice my communication with clients, build my own leads list and just to get my name out and network.  For other agents who may have done this in the past, how do you find those selling agents who would be willing and ready to allow an outside agent to perform their open house for them?  How do you approach them, what do you offer, etc?  Thank you!

Here are some numbers that I came up with.  I made a few assumptions of original purchase about $450K and your income tax bracket at 25% and future appreciation at 6%...

1. Cash on Cash annual return = negative $2304

2. Appreciation = $39,000 (6%)

3. Equity Pay down = $7,000 

4. Tax savings = $3068

Throw-Off = $46,764 (total increase in annual net worth the property gives you)

Heres how I determined my Numbers:

A. Annual average ROI to date = 29.9% (current equity minus cash out of pocket = $157,000/7 years = $22,428 per year /$75,000 = 29.9%

B.  Estimated Tax savings per year = $3,068 ($450,000 purchase price x 0.75 = $337,500/27.5 = $12,272 X 25% tax bracket = $3,068 or $255 per month)

C. Cash on Cash annual return = negative 3% annually (-$2304 / $75000)So how much will you potentially make over the next year:

D. Next year annual return on Equity = 16.8% ($39,000 appreciation / $232,000 equity)

Total "throw-off" = 20.1%.  Total of all four income factors above divided by the current equity.

Of course all these numbers rely on factors that can be out of your control, specifically the appreciation.  I don't think prices will plummet any time soon but I do think they will taper off which is why I chose 6% appreciation, which may be high.  As it sits now you would need to make at least 20% on your money if you sold or re-financed in order to make it worth it in the long run.  

If you sold the house today you would walk away with about $193,000 in your pocket.

If you were to lease-option it then you would be cash flow positive each month since the HOA, trash and any other fees would be the responsibility of the new optionee, plus their monthly payment will be higher. Lets say you cash make the monthly payment $3500 for the optionee...That would give you about $800 per month in your pocket during the time period of the lease. So, if you agree to a 4% appreciation per year for the optionee and they exercise their option say in 24 months then you would walk away with a lot more:

$19,200 in cash flow

$14,000 in equity paydown

$6,000 in tax savings

$52,000 in appreciation

zero commissions to agents

= a total of $91,200 extra in your pocket after a two year option.

To me, that seems like your best bet. But, you would have to make sure that they cannot exercise their option for a period of time...Have an attorney or experienced investor help you with the contracts and details.  Also, if I have made any mistakes on my numbers then I apologize...I am not a licensed CPA or attorney :-)