All Forum Posts by: Aaron Pfeffer

Really love this thread!  And big fan of what @Nick G. just posted...couldn't agree more with all of that.  And while often now the de facto answer to everything hard to explain, Millennials alone are not the reason SFV has lagged behind in price appreciation.  It's like Nick said, it's already a "settled" paradise for many, and it's often last on the list now of places to end up in Los Angeles for a constantly growing population.  Heat, traffic, distance...sure, all big contributors.  But sprawl is by far the biggest reason for the explosion.  Expansion into Mar Vista, Westchester, downtown and especially NELA were stymied for decades, and the regeneration of development after the 2008 depression opened these pockets up to a whole new demographic like never before.  Thanks for positing these questions @Kevin Lefeuvre, and thanks to everyone else for their thoughts.  Very interesting stuff.

Anyone out there having success in either of these cities?  Two very distinct population sizes I know, but they seem to have similar price points and good inventory, and their proximity to each other make it viable to double up on volume.  Would love to hear some thoughts from local investors and brokers if willing to share...

Curious @Tony Silvas, what would is cost to simple rebuild 660 Sq Ft in your neck of the woods?  Also curious to hear what others suggest you do here.  I ask about the cost to rebuild, because it can help determine the offer you end up making, or if you want to move forward at all.  Rehabbing a property and then having to market it with it's original Year Built status is often no comparison to marketing a property New Construction.  Then again, I don't know your city Building and Safety codes at all...so it's hard to give you a suggestion not knowing what is the easier play.

Great info @Linda Weygant

Obviously this gives an ownership interest to the private investor rather than just a lien position, but perhaps @Pete Edmonson is cool with that.  Pete, please really consider what that means if your notion is to refi the investor out, because a partnership entity on title from the get go may turn off the end lender.  Good luck!

Whoa.  Very curious to see how this turns out.  Thanks for sharing @Account Closed

Love Evansville. Home of the Purple Aces! I'm an IU graduate myself. Close the loan in your personal name and then quitclaim the title in the LLC. And also work with an insurance company or agent who will change the ownership vesting into the LLC after you make that title change. Good luck!

"The market is being driven by overpaid, financially illiterate lemmings."  Hahahahaha.  That made my day.  Thank you @Thomas S.  Good stuff!  

It's astounding how many investors purchase 3.5 to 4.5 cap rates in and around LA, but even more astounding how many more investors break their backs re-developing just to eek out cap rates a little higher than that, while convincing themselves they did the right thing because at least they have a shiny new building to manage. Or how we've all swallowed the 8-12% flipper ROI pill, as if it's okay that it should ever be less than 20%, regardless of size of project. But we're also dealing with livelihoods here...as in, this is often the main job for a real estate investor. What else can they do if not plow forward with what they have to work with in Los Angeles? It's a vicious cycle.

It could work if you are 55% CLTV or less, and since it is a rehab loan, you should dole it out in draws as they finish the project. Also, do you feel comfortable debt servicing the first lien while you foreclose instead of them if something goes wrong? Also, what is the duration of the first lien, because there better be enough time left that you aren't concerned about your borrower finishing the project and selling BEFORE the first lien is due. There's a lot to think about here, but many 2nd lien lenders do very well for themselves if they are smart about these notes. Good luck!

Where is this property? What HML is giving you less than a $50,000 loan, and also charging such a high interest rate for such a low LTV? Why do you have to wait 12 months to refinance into long term loan instead of only six months of seasoning? If market value is already $100,000, why would putting in $15,000 in repairs only garner a $5,000 spike in value? Are you confident in absolutely purchasing at 70 cents on the dollar? It's fun to play with all those numbers and flex the brain, but the crux of the deal comes back to rent vs. what you are into the deal for. $1,200 compared to $85,000 is well over 1% rule, so if you like the area and prospects of your tenant pool...sounds great to me.

Used PropertyBase for years, which is an offshoot of SalesForce, and is very specific to realtors but can be altered to be useful for investors too. It has its merits, but can often be lumbering. TopProducer can also incorporate some usefulness for investors but is clearly geared towards realtors.