All Forum Posts by: Wes Shive

Hi all,

I was wondering if anyone has any good referrals for an RE investor-friendly attorney. I'm specifically looking for someone who is well versed in asset protection options (such as LLC and trust combo) as it pertains to real estate as well as estate planning for real estate assets. Any help would be appreciated!

A big plus if they are local to the south bay area as I'd like to meet face to face as much as possible.

I may be interested, feel free to PM me.

Abraham,

You're quite right--I honestly forgot about that aspect of FHA (and conventional) loans. However, you can still pick up property that is extremely dated (think grandma living there for 50 years) but otherwise functional. This is the key, particularly kitchen and bathrooms still in place and in working order.

Not being able to go after homes that are more "gutted" than that gives you fewer options but is still doable. Frankly the hardest part is getting a good deal. In fact, if it wasn't a PITA to get the deal or if you didn't go after a dozen or more good deals to get one, it's probably not a real deal (or you got very lucky). The fact that you are not a cash buyer is also to your disadvantage in locking up deala, relatively speaking. This has been my eperience anyway.

You may also try to get more creative. Perhaps you can work with an experienced flipper to find them a good deal then get involved with the rehab process as part of the deal.

@Josh Rich, first off welcome to the journey. It's long, almost never predictable, and takes occasional grit to press on, but the rewards are worth it! I can't speak to all of the areas you're interested in, but I would suggest that you ask yourself what your ultimate goals are and then work backward from there. And be specific.

Going the corporate route and working for a company is certainly an option. As one who used to work in finance, I would caution about getting stuck in a position where you are making good money but are unable to find the time or push hard enough to put real hours in on your personal real estate endeavors. Having a flexible job with enough fat to save and invest is arguably a better position to be in for what it sounds like you want to do.

If you do work for someone, I would suggest a much smaller venture, where you are able to wear many hats. I would bet that more often than not, you also have more flexibility as well.

Also, while I don't have experience finding a mentor (mine is my Dad), a good mentor is INVALUABLE. I'm twice as experienced in the business as my years because of all the wisdom I've received without having to fail to get it. (Trust me though, I've still made and learned from plenty of mistakes.)

Keep in mind that, as with many other things, the key to getting where you want to be is to just do it! Want to get into MFR management? Find an MFR manager and work for them, even if it's for peanuts...

@Abraham Hodroj, fix and flipping (or living in then eventually flipping or renting out) a house while you occupy it is definitely a way to go. I have not done so myself, but I have done a few flips before (and a lot of rehab and long-term holds.) Keep in mind that, generally speaking, the more work that needs to get done the more profit or equity capture there is.

From my understanding you can get FHA loans for as little as 3% down. I'm not sure what you personally qualify for, but if you can qualify for such a loan, it's often a great first-timer option. You need to pay careful attention to you costs however, both in terms of whether you can cover the cost of the mortgage and also whatever rehab, maintenance, property taxes, insurance costs you will have as well. You should still pencil everything as if it is strictly a for-profit flip. That's the only way you'll truly know if what you did actually made worthwhile money or if it was just a way to acquire a house that was fixed to your tastes but for only a minor discount.

Off the top of my head, things to include that often aren't considered by some newbies:

-carrying costs (if the goal is a long-term hold then flip as opposed to immediate flip, you can buffer some or all of this with some rental income)

-selling/closing costs (I like to use 8%, which may be slightly high)

-self-employment tax on your gains

-contingency or slush fund (for when your expenses are higher than you expected--this can happen often)

Hope this helps.

@Payal Z. just wanted to clarify I assumed you meant in LA or CA, which is why I said probably not. From my knowledge, Houston is also a good possibility. Keep in mind expenses are much higher there (mostly due to property taxes and insurance).

Payal, are you talking about SFHs? If so, probably not. Also, it would be better that you ask your question with cap rate as the metric, not CoC return. CoC return entails a loan, so if you want to use that as the metric, you will need to provide what your financing terms and rate will be as well as the price range and expected LTV.

If you don't actually plan to occupy the property, then it will not be your primary residence. There's really not much gray area there. Whether or not they find out after the fact is a different question. If this is a HUD proprety, they have an interest in favoring homeowners over investors, all else being equal.

Aaron, I'm not aware of that option for insurance, but I would be interested in hearing more when you find out more. Personally I carry a liability policy for each property then have umbrella insurance for added protection. I'd be curious to know if what you're talking about is specific to Texas or not. I know insurance tends to be much more expensive out there.

If you have a GREAT deal, finding buyers should be very easy. Try the BP marketplace, craigslist, talking to wholesalers. There are lots of options and sometimes you have to just get creative.