All Forum Posts by: Zack Thiesen

Be VERY cautious bringing dry cleaning into the business. No pun intended but you can really get taken to the cleaners. Can result in enormously costly issues stemming from chemicals leaching into the soil and cost well into six figures or more to remediate. There is a dry cleaners here that went up for sale recently for like 1/10th of what it's likely worth bc the owner leased to a dry cleaners and this happened. Now he can't even sell the property for the value in the land. 

@Maria D'Aura Have you considered Arcata, CA? Or Eureka, CA? I live up here in Humboldt Bay (about 5 hrs north of you) and moved here from the SF Bay Area. It is identical in terms of weather and ocean/coastline and a wonderful area. There is a large Cal State University in Arcata, and rents up here are high and getting higher every month it seems like. Your dollar amount for the 1031 is well suited to the multi-family market here. Feel free to DM me with any questions or to ask about areas and other details if you find something you're interested in. Good luck!

@Jada Walker The money spent on an inspector will be some of the best you spend. Be sure to get one that comes recommended. The best ones are ex-contractors/people who used to work in the trades and are now do this in a semi-retired capacity. Others have never really worked on buildings in their life. Many inspectors are totally fine if you walk the house with them and are trying to learn what they're looking for/at. Their report will give you a decent idea of problem areas. But there are limitations to where they will and can look. Having the report ready and sharing it with a contractor who then walks the house for scope-of-work will give you a more thorough understanding of what is wrong and, most importantly, what it could cost you. Even still, pay them something for their time and get several bids for the work. You will likely be shocked at how different the prices can be. Do you know anyone who is a general contractor by chance? Maybe they'd be willing to help out and give you notes as a friend.

A building is a complete system that works together. To find points of failure can be a challenge. General contractors are contractors certified to work and have knowledge in most all aspects of that system, unlike other contractors who can have very specific concentrations and knowledge bases. But it is important to bring in that knowledge of the complete system. Because things can look fine and not be. Things can look awful and not be. For example, a roof can have discoloration and stains from a variety of causes. Some to worry about and others not. It's a big price tag... I guess all I'm saying is short of pulling up and seeing tarps all across the roof I would get a professional opinion on cost. Your specific REI strategy comes into play too on what you will be putting money into and where else it would be better spent.

But hiring an inspector and walking the property with them will help you a lot. The more you join in these conversations with the people you come to work with, the more you will end up absorbing. Good luck with your search!

@Joe Villeneuve Absolutely. Being out of touch with the market goes both ways. A carpenter friend of mine stumbled into a fantastic deal. Bought a crack house/hoarder house for 80k off some older gentleman who didn't want to deal with getting them out, clean up, selling process... despite the state of it, it was still worth at least low 200's . He offered the occupants cash to leave which they gladly took, even helped them move into their new housing with his truck. Flipped it and sold for 320k, no drama or horror stories to speak of.

I guess all I'm saying is do your best to gauge the savvy and possible angle of any deal where neither of you are outright RE professionals or have a lot of experience. Sometimes it really is a deal. Im not an RE professional nor do I have a comparatively large amount of experience to the others in this forum, just putting in my 02 cents from what I have experienced. But without knowing the circumstances and numbers it's hard to give feedback to someone wanting to know.

In addition to what @James Galla said about sellers knowingly charging a premium to buyers who may not qualify for trad finance, you also run into as many stubborn sellers who just have what I call "yard sale syndrome." Meaning they're just plain stubborn and think their property is worth a lot more than it really is, aren't realistically in tune with current market and aren't willing to see a remotely fair price for it. 

I would be careful.. the properties are usually in bad shape, with much of the work done by the owners themselves bc that same attitude has led them to balk at labor bids over the years and do critical work themselves... often badly. But yes, without numbers it's hard to say what's a deal. Best of luck! 

@John Moorhouse I felt the same as you did, exactly. Not that it was necessarily my case, but I have found that people who are bored and irritated with school are extremely intelligent as you clearly are. It's a time in life that you want to get out and DO things. But we are all working in a system and two of the hardest things to overcome in that system if you want success are no hs diploma and having bad credit. Starting out with a GC and getting into the trades is a great idea. That's what I did. I never went to college and it was the best decision I ever made. But HS is different. Not completing it will be an enormously limiting factor across EVERY industry. You will find yourself bored and annoyed but in wage slavery, and for much longer than a year or two. I hated absolutely everything about school... every minute being there. And unlike you I was not even good at it (I was a C student). But sincerely, just get the piece of paper and be done with it. 

Bottom line is getting "out" into the world a year or two ahead of time will not benefit you in any way at that age, even more so without a diploma. Hang in there! It'll be over before you know it. 

Great job @Blake Dailey! What a great first deal and outcome for you and your investors.

@David Krulac And that is absolutely astounding.. 6 percent is like a second mortgage almost

@David Krulac and @Steve Babiak Thank you for bearing with my question and for the reply. It finally clicked after reading some more about the school district part of it as to how the lines were drawn and why it was so frequently different even within the same city. I think that was the most confusing part for someone not familiar with how that all breaks down on a when I'm looking at a map. I also read up some more on the legislative attempts and how people have been trying to change it for many years, it does seem like a very difficult change. 

Answered own question... had just never heard tax rate called millage before. And the "1 Mill or .001" instead of "(1 Mill x .001)" typo sort of threw me off. Still seems extremely high for the property values and like it fluctuates often and between neighborhoods. I read several articles on local reactions to annual tax hikes in different areas that confirm it is possible to double in the space of a year. Still curious to know what people's investment experiences have been in this environment. Thanks!