All Forum Posts by: Tim Ryan

Hi Alan, I'm in the Pasadena area. I am full time real estate investor and contractor. Let's connect and discuss what you are looking to do in real estate. I own rental property out of state and it's the best thing I've ever done. Tim Ryan

I think you get what you pay for... You said it, you'll pay the attorney and he'll at least perform (or words like that). So, I think it's a good lesson learned. There is no good Free mentoring or coaching. I say this because I have paid out a lot of money to learn my skill of real estate investing. Good for you to bring this up and find answers.

Remember Monopoly Game? I think its three green houses can be traded up for one Red Hotel/Apartment.  Time to trade up I think. Looks like you are getting some good advice here from other members. Next step, go get educated in apartment buying / syndication / financing.  BP is good to for asking questions, but you won't learn everything you need to learn on here. 

Good Luck

Well @Pratik P. this would be nice.  The lender will also require a "Repair Allowance" that is included with the monthly mortgage payment. Usually $250 per door per year. So, that works out to $867.50 per month (now less cash flow than you thought).  This is like a forced savings where these funds will accumulate until you need to make a Capital Expenditure (roofing, replace hvac, road work, etc).

Getting private money lenders at 4% for 6 years is very unrealistic. Unless they are your own parents.  

You are thinking well though, especially for a 24 year old. If you are serious about this, you need to get educated in exactly how to do these deals and with a coach. BP is cool and fun to ask questions but this is not nearly enough to learn it all. Check out David Lindahl / RE Mentor. He is the master. I learned from him (I do not work for him or get a kick back of any kind). I appreciate Dave's teaching. 

FYI, 7 years ago I had the same questions as you and now I own 241 rental units in 7 properties (apartments).

Good luck.

I think that $250 per door is the Capital Expenditure amount you will put aside per unit per year. Your lender will require this for major expenses like roofing, asphalt, hvac, appliances, etc.

Rehab costs would be if the property needs work when you purchase. Are you contemplating buying this way? I don't. I only buy performing assets that are turn-key because I don't (can't) buy in my local area.  Probably same for you.

1. Job Growth

2. Local government committed to growth

3. Desirable area to live and lower cost of living

4. Not over built (yet)

Now, to answer your question: You will never really know the market until you go to the market periodically. I know living in HI makes that a bit more difficult. However, my markets are 2500 miles away from my home (I own over 200 multifamily units). Everything changed for the better once I started going there at lease quarterly. Off-market deals come when the local brokers and sellers get to know you personally (and like you).

Something I have done is I found a market and worked that one market. I know everything about the area, the properties, the brokers, vendors, etc.  I have seen investors jumping all over the country and never really know enough about any of them.

Good Investing!

If you can vet the investor and know he does have experience, then this is a great deal.  I talk to a lot of new investors that think they should do it alone so that they get ALL the Profits. They can get all the losses also due to lack of experience. What usually happens is they spin their wheels and never actually do a deal. So, I applaud you for even thinking this way.

If the mentor is real then you are lucky to have someone to help you on a first deal.

Good Investing!

Find a local Mentor and form a partnership with some experience. Reading books, listening to Podcasts, etc is good for gaining experience but its not enough. The will to do it and because you always loved the idea of real estate is not enough either.  To attract the mentor and partners you will need to have something substantial to offer. Either funds, credit, time, construction industry experience, lending/banking, ability to find amazing deals, negotiation skills, etc.

People will help you if you can help them.

You can do it if you are very serious and work very hard.

Join our meetup group in Pasadena, Ca. It's called Real Estate Investors' Hard Hat Tours. Our meetings our onsite at actual house flip properties. We tour the project and talk about how to build our real estate businesses. You sound very new to this so you may need a mentor as well as education. There are mentors at the meetup meetings.

I am one of the contractors that is doing this retrofit work. Yes this is a very big deal and this will spread to all cities in California soon.  I too have heard that many owners may sell. My take on that:

1. Doesn't mean there will be good opportunities to make cash flow in rentals in So Cal just because they need to sell. In other words, I don't buy So Cal apartments now and I don't see buying do to this retrofit program. But, maybe an opportunity for others I guess.

2. New owners will have to do the retrofit in the same time frame (I believe). A sale certainly does not negate the mandatory program. So, you will have to pay an enormous amount per unit to buy AND you will have to retrofit the building.

For me the opportunity is in the engineering and construction, not the sales.

@Will F. the cost per frame can be anywhere from $25,000 to $55,000 each.