All Forum Posts by: Account Closed

@Lelith Walker makes some good points about the difficulties going out of state. I've had similar experiences with people knowing we are out of state and not giving us a fair shake. Even the utility companies! Our water bills and electric bills always end up being really high, and no one can explain it! LOL.

CA is the number one state when it comes to "out of state" investors, and from my experience its not even close. I think its a reasonable and justified response, but its a lot of work to get set up across state lines. You have to learn the market, find a realtor, and find contractors. But the markets will be better. Everyone wants to invest here in the NYC area and in Cali, and there's big money to boot. But some of the stuff off the beaten path will give a nice return (but ALWAYS comes with risks all its own).

Lastly, in regards to finance, I would stay away from hard money if you have that much down. I figure at "typical rates" hard money costs about 10% of the acquisition price + repair costs for a 6-8 month hold. So at a $700K purchase and $100K rehab, hard money costs about $80K. Thats just too much of the profit. My guess is you're trying to make about $60K-$80K. Why should a money partner make as much as you when you're brining about 30% to the table (what I figure you roughly need to get a hard money loan when all is said and done with fees, points, escrows, etc).

I would go for a conventional loan. Look to put down in the 35% range and keep the balance for repairs and finance the repairs yourself. Figure to pay (and I have done the math on this, just ballparking) about 2%-3% of acquisition cost on loan fees and interest. So on a $700K house thats like $15K-$20K. Hopefully that $60K you save makes more deals workable. But from what I've seen southern CA is a monster to try to invest in due to the competition.

Bill, the guesstimating you've done is pretty close to what I was thinking of making actually. I'm going to try my best to go for a conventional and see if I can get approved. Heck, I'm even willing to put up to 50% down if they'll just approve me on the right property and get me going. Southern California is truly an animal of its own kind and it hasn't been easy searching but surely something will come up.

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Originally posted by @Jo-Ann Lapin:

I am here local in Orange County and yes there are still holds and flips out there. It is about what you know and who you know. You should also consider perhaps looking into trust deed investments to diversify a little.

Jo-Ann, I agree. Just becoming harder to find these days as opposed to how it was 4-5 years ago, at least from what I've been told.

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Originally posted by @Lelith Walker:

I would stick to states that are close by rather than states that are across country. There are too many people who take advantage of local people whose mouths will water when they know you are out of state. You want to be able to keep an eye on people and in some cases a hand. Even if you have friends and family in those states that are across the country you may not be able to rely on them as well as you think you can. NO body cares about your investment as much as you do because it is not their money. If you are going to go across country try to partner up with a local investor who is going to put their money into the deal.

Give you an example that I am facing now:

1. I hired my cousin to install floors. He told me to get laminate because that is what he knows how to do. The GC I hired later said that the floor is not good for GA due to the weather. He promised he would leave the floors that my cousin did in one home and not install them in the other home. GC also promised to return the rest of the floors for me so that I could get my money back and he would go ahead and install the right floor which is luxury vinyl that looks like wood. A month or so later the same GC says he cant return it because it takes time and he has been called on other jobs so I have all this extra floor in the house. I can't ask my cousin to return it because he was not doing a good job and ripping me off. Now the new tenant buyer says the flooring that my cousin did was not good and he got a bid for $350 to repair what was done. In some ways its probably good that the floor was not returned because if anything what was left can be used.

2. When I bought the house it came with mirrors. The tenant buyer and realtor asks if she will get them. I ask around and nobody knows where those disappeared to or will admit to them being there in the first place even though I have video and pictures to prove that they were there.

3. For one month when no one was supposed to be in the house I got a gas bill for $370. Now GA is way hotter than NY. My 3 family in NY where I pay the gas for my tenants is $250. Why did this happen? because my cousin decided he was going to live in my house down there while he worked on it. He is originally from a warm climate and 65 degrees to him is cold. This was not part of the deal.

4. I had a project manager that told me he checked a whole lot of things and even sent pictures and video and so did the subcontractor I used. I even went down there and visited the property. Now tenant buyer is saying those things do not work. I sent instructions on what to do to test but being that I am in another state I cannot be sure if it was done.

After much thought and the possible headaches you've mentioned, even when having someone living nearby or being able to stay extended periods of time during construction or remodeling, just isn't worth the headache. Going to stick to the areas that I know and staying nearby.

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I live in Orange County, CA and I've been scouting the market for the last year and a half. Let me just start out by saying the inventory for foreclosures and short sales dwindled really fast and got eaten alive by shark investors.

With that said, here is my question; I currently have $500,000 in liquidity and have started thinking about other markets/cities to try and purchase my first investment property, preferably a foreclosure, give it some TLC, then re-list it. For you veterans out there that have already done so, would you ever recommend investing in other states or have you mostly stuck to properties of this type to the surrounding areas of where you live?

There are still deals out there to be had in Orange County however most of the really good ones that can purchased and flipped are in the $700-800 range. This leads me to my next question...

With $400,000 in cash, could one hypothetically still get their hands on a property in the $700,000 range by financing the rest, including remodeling cost? If so, this would pretty much enable me to stay local and take a shot at my first property rather than resorting to other places.

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Originally posted by @Thomas Chang:

I actually know the community that you are talking about as I have a few rental units in the towers. One think I would watch out for is asbestos since the units are so old. Good luck with your flip.

Thomas, assuming that asbestos turns out not to be an issue following the inspection, would you recommend it for a first flip?

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Looking to purchase my first flip. Came across a condo inside of a community that's strictly for ages 55+. Investors however are allowed to purchase and resell, without residing in the unite. Here are some details to help with feedback:

Sq ft: 950

Bed: 2, Bath: 1

Unit type: 1 of 4 in a four-plex

Location: Southern California

Price is in the low 200's and negotiable. I would be paying cash. Last investor that picked up one of these condos remodeled the whole thing with about 80,000 and just sold it last week for 365,000. I might not go full blown remodel since it's my first but it is an option.

Any simple advice or feedback before taking the dive? What to look for when hiring an inspector? Etc... Any feedback is appreciated.

Thank you in advance

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Sq ft: 950

Bed: 2, Bath: 1

Unit type: 1 of 4 in a four-plex

Location: Southern California

Any simple advice or feedback before taking the dive? What to look for when hiring an inspector? Etc... Any feedback is appreciated.

Thank you in advance

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Originally posted by @Joe Homs:

@Account Closed welcome to the BP community. I am flipping in Orange County, but I am buying most of my inventory at the court house steps. If you are interested in discussing over a cup of coffee, I can meet you at a Starbucks in Mission Viejo. Let me know. There is also a meetup every month that you might be interested in. Here are the details.

Check out:"Orange County Real Estate Investor Networking" http://meetu.ps/2HVsJw

@Joe Homs,

Very much appreciate your feedback and offer to meet. I have sent you a message to your inbox and look forward to your reply.

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CK,

Thanks for the input. I've been tempted to do vacation rentals simply due to the high yield when renting out by the day and/or week. I've heard a few nightmares here and there, but nothing that can't be remedied with some repairs afterwards in the case those were to happen. The only vacation properties I see are good potentials, if I were to buy cash, are in the Dana Point area and similar coastal towns North and South of here.

Honestly at this point, considering the market has somewhat plateaued, I fear that trying to flip might get me in the negative instead of making money. I'm more inclined to seek returns in rental yield.

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I currently have $320,000 in liquidity and have been looking for my first investment/income property for quite some time now, however the fact that I live in Orange County doesn't make the process easier. Reason I say that is because I don't want to have a mortgage on the property and would like to pay for it in cash. There are some properties on the outskirts of Orange County, 1 and 2 bedroom apartments and condos that are in the mid 200's to mid 300's however most are in questionable areas or will most likely have problematic tenants.

I have contemplated investing out-of-state however, most people I've spoken to don't recommend purchasing a single family income property outside of where I'm living or i.e. too far away that I wouldn't be able to drive to it in a short period of time.

Also, as a beginner in income properties, I am asking the veterans in this field if you guys recommend purchasing a property that needs some TLC and flipping it for the first time, or keep it and rent it out?

Any and all feedback is very much appreciated. This is my first post on here, so bare with me if I've missed anything.

Thank you

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All Forum Posts by: Account Closed

Account Closed has started 8 posts and replied 20 times.

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