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All Forum Posts by: AJ Wong

AJ Wong has started 240 posts and replied 656 times.

Post: How to manage remote remodels or reconstruction?

AJ Wong
Posted
  • Real Estate Broker
  • Oregon & California Coasts
  • Posts 674
  • Votes 537

Having lived in some fairly remote and rural area and currently working on transforming a rental in a foreign land and foreign language I thought I share some of my experiences, results and advice when it comes to trying to manage construction remotely as an absentee or non present property owner or manager. 

My absolute best advice when it comes to managing a remote construction project in which an owner or investor cannot consistently be physically present is to not do it. Seriously. 

The likelihood of laborer's performing on time and on budget without your supervision is very low. Depending on where you are in the world (or relation to it) could dramatically influence the cost, availability and reliability of workers.

My first project was in Port Orford Oregon (the most western point in the continental US) and I was 30 years old with zero construction experience and three hours from the nearest Lowes or Home Depot. Finding reliable workers that were already not reliably working for someone else was a near full time task and without an incredible amount of persistence and good fortune, I would never have been able to turn my initial investment into a positive return or experience.

I found myself posting ads to CL daily, waiting for people not to show up and meeting characters I otherwise would preferred not to meet, all whilst my project dragged on for over a year, and I got in way over my head. 

Fortunately for me I met a contractor also named...Anthony Joseph (you can't make this stuff up.) He was a professional, is a friend and saved my project (and life) while teaching me how to build along with many other life lessons I will forever be indebted for. 

As it relates to investing, I learned that there is always a cost of doing business and good business isn't cheap. 

So if you must or won't be present for construction activity, when you can, which is always, HIRE A PROFESSIONAL. Or in other words..a REAL CONTRACTOR. 

A REAL contractor is a licensed professional, that has a reputable business with referrals, recommendations and a cost that probably won't feel 'cheap.' They will provide a very precise list of materials, costs and timeline as well as show up in a clean or organized vehicle, with quality tools and likely can't get to the job right away because their services are in demand and their schedule is filled with past, current and future satisfied clients.

You'll speak to at least 2-3 people or companies that can do the work, but only one or two that should. 

Imagine spending the amount of time, effort and investment into analyzing and acquiring a property, that you expect to return valuable currency, only to allow just anyone to walk in and perform sacred work? 

Well, it happens..to ALL OF US. I just visited an estate my friends purchased in Nashville. They are extremely successful multi million dollar contractors and designers in Venice Beach. They gutted a 100 year old farm house on 20ish acres about 40 minutes from downtown. Long story short they paid a local at least double and $30k more than the actual work should have cost and it's taken twice as long. 

Why? It's not even that they are "Californians" being taken advantage of in a place they don't know, well it's maybe some of that, but the worker also has to drive an hour each way to get to the property. If he needs materials the job stops. He's a great builder, but he's not a REAL contractor. He doesn't have a reliable five, six and seven man crew that will show up until the task is complete because they have another job next month.

He doesn't have subcontractors for the more specific and intensive tasks that come with a complete remodel. He doesn't have the ability to deliver to your expectations. 

How often does someone over promise and under deliver? And building is HARD. Creating what you want is even harder, and doing so without direct supervision is a greater challenge still. 

The point is that you will pay for what you get. A extremely successful mentor told me once that you can have: time, quality and value but you can't have all three. 

 You might not even get two unless you fully participate and contribute each of those characteristics yourself someway and somehow. Good record keeping is must, I like to use the notes app in my phone. I put the date, cost and description and each week upload it into an excel spreadsheet. I know what I've spent and on what. I try to go further and see how much material cost I have left to purchase. I keep a tab for labor costs and I know who's getting paid for what and what they're getting paid for. 

The workers get a text and call each morning, they send me photos of the tasks of the day or or at completion. We FaceTime. We text, we talk. These relationships are valuable, meaning the results with either create or destroy your investment. Make sure you actually want to deal with the contractor working on your space, and that you would invite them into the space when it's complete. They will be your friends, at least for a while and hopefully beyond. 

The property is a home. It might not be a house, but it's a home for your money, dreams and family even if indirectly. 

Don't let anyone come in with their shoes on or treat the space like they would not treat their own. 

Hire someone that has something to actually gain or lose, in the long run they will save you time, money and anxiety as well as be an immeasurable part of your success or failure. 

I have many stories of construction 'surprises' or unexpected costs from hiring or literally just giving money to unlicensed contractors. Any funny stories that might shake the 'seriousness' of this post that you'd like to share? 

Ok I'll go first, I had a toothless tile man (who I must say did the most phenomenal tile job I have ever seen all by hand with a grinder!) show me what to do when you don't have a functioning bathroom but you've got a bucket..but at least the job took twice as long and cost double :) 

Cheers. 

Post: Burst of market activity. Above asking the new normal?

AJ Wong
Posted
  • Real Estate Broker
  • Oregon & California Coasts
  • Posts 674
  • Votes 537

Well, the Spring season has started early. On a recent thread in 8 different US markets investors, brokers, lenders and markets in general are seeing a flurry of sales activity including failed offers over asking price. 

I've had 7 recent prequalified clients with two offers in against competing offers on the OR Coast. One other should be submitted tomorrow. 

A quick look at the recent listings shows many going pending within days and sellers even instituting deadlines for offers on highly desirable properties. Is this the new normal? 

With the extremely limited inventory on the coast, I anticipate that the buyers and investors that have been on the fence will look to act while rates are lower and economic conditions appear to be stabilizing. 

Sellers that held off listing this summer could benefit greatly from an early start on the Spring and Summer season. 

If long term interest hold in the 6% range or touch into the mid 5%'s it is very likely that due to the extremely low inventory in many regions and the seemingly growing demand for residential income properties, market intensity could remain elevated for the next 1-2 quarters. 

What are you seeing in your local market? 

Post: Multiple Offers Are Back?

AJ Wong
Posted
  • Real Estate Broker
  • Oregon & California Coasts
  • Posts 674
  • Votes 537
Quote from @Michael S.:

We found a great investment property Friday that we offered 12k over listing the first day it hit the market.  Had multiple offers within 24 hours and we lost out even 12k over ask (which was about 8% above list).  Definitely seeing an uptick here, but primarily on sub 300k listings.


 It's a wave of buyers that could grow if rates drop even another .25% On this thread it's confirmed growth activity from NC, OR, CA, TX, AL, OH, WI, CO..

Post: Multiple Offers Are Back?

AJ Wong
Posted
  • Real Estate Broker
  • Oregon & California Coasts
  • Posts 674
  • Votes 537
Quote from @John Morgan:

Things will pick up again as we approach spring. Inventory is still low and demand is still high. I just don’t see a drop in housing this year. Maybe in areas people are leaving in droves like IL, CA, WA, NY and NJ. But for the rest of the nation, I don’t see much of a drop in RE prices like so many experts have been saying the last year or two.

Couldn’t agree more. This flurry will absorb a lot of the existing and onboarding inventory. 

Post: Market Activity Explodes

AJ Wong
Posted
  • Real Estate Broker
  • Oregon & California Coasts
  • Posts 674
  • Votes 537
Quote from @Jay Hinrichs:
Quote from @AJ Wong:
Quote from @William Coet:
Quote from @AJ Wong:

Well a few weeks ago I wrote about a window of investment opportunity. 

The forecast appears fortuitous? Or somewhat accurate.. In the past 10 days I've had no less than six clients get pre qualified for a potential property purchases. 

I had several investors close on multi unit properties in January, and although reflectively they might have paid a slightly higher rate of interest compared with today, there was almost certainly less competition than would be expected today. 

A good proportion of properties with investment potential that were languishing on the market have recently gone pending and several recent listings have had multi offer conditions. 

As rates are expected to slide and stabilize and we enter peak housing season, I continue to anticipate a robust and perhaps surprisingly active Spring and Summer market along the OR & CA Coasts. 

Almost all of my local and extended industry colleagues and associates have reported a similar spike in sales activity and interest, with lesser intensity on retail commercial or office related properties. 

Both buyers and sellers of investment properties are encouraged to recalibrate to current market conditions in their localized area for consistent evaluation and analysis of investment returns and potential. For example since September/October '22 rates are down 1-1.5%+ on some alternative lending products such as bank statement verification loans. 

Also with a wave of buyers potentially competing for desirable properties, it could be a listing opportunity in what is trending towards a fresh seller's mini market. 


Questions on your report:
1.  Are the sale prices lower because of higher interest rates?
2. Are these sales 1031 exchanges?
I had a seller lower their price considerably as we initially evaluated the property at ‘peak’ market in 3/22. The closing price is significantly lower than the initial asking price but is where the property likely should have been offered based on the 3 years of ownership. Otherwise sales are closing at or near listing prices provided realistically evaluated. Two clients with 1031X funds but otherwise 10-30% down conventional and commercial deals. SFR’s. Triplex. Six units. Also lots of interest in hard asset properties such as Merchantable Timber. Likely submitting an offer for a client today on a SFR, STR eligible coastal home in great area and excellent condition. Multiple offers and will very likely close well over asking. Listed 2-3 days. Cheers.  

Timber you Say ??  Love that play.. 

@Jay Hinrichs  J.P. Morgan just closed on a $500M deal primarily for carbon credits. If you have experience or sellers I have medium to large sized investors ready to close. Connect with me and Ill let you know how this current 200+ Acre deal in OR turns out. 

Post: Multiple Offers Are Back?

AJ Wong
Posted
  • Real Estate Broker
  • Oregon & California Coasts
  • Posts 674
  • Votes 537
Quote from @Gary L Wallman:
Quote from @AJ Wong:

Howdy all just looking for some insight from other brokers, lenders and investors in the area and beyond..

I've posted regarding the state of the Oregon & southern California Coastal market, and as expected we've seen housing and market activity pick up notably in the past 3-4 weeks. 

Two recent multi unit closings, listings that were available for months pending and even a few properties with offers in that have multiple competing offers. 

Are you all seeing the same sort of market activity intensity? 

I suspect as the weather warms and rates stabilize or even drop we could see a mini 'market boom.'

Obviously great for 'business' but perhaps not as favorable environment for investing as there is increased competition? Thoughts? 


Over the last few days, my 2 sons and I, each made an offer on investment homes. My offer was on a 3/2 with an ARV of about 210k needing about 40k in repairs. I broke all rules and offered 160k against their asking of 188k. They told me I was too low to counter. Son #1 Got his 1k over asking but had to let owners remain for a month free. Son # 2 offered 147k on a 864 sq. ft. 3/1 listed at 139,900 and was outbid. All were clean, no inspection contingency offers. This in SW Ohio! Completely insane.

There were essentially no new listing on the coast the last 4-6 months. The lack of inventory will play a huge part. 

Post: Multiple Offers Are Back?

AJ Wong
Posted
  • Real Estate Broker
  • Oregon & California Coasts
  • Posts 674
  • Votes 537
Quote from @Aaron Breckenridge:

Redfin just ran this article two days ago. Rates at 5.99% can be found:

There it is! Thank you..well..if we maintain or decrease from here buckle up! I began my mortgage career in 2004 and rates were 6-6.5% albeit on less verification and more ‘creative’ terms. I saw an old newspaper recently from 1985 and the rates were 12%+ with 4+ points and 1 year fixed term. Granted the loans were for $100k but Historically 6% is cheap money. 

Post: Multiple Offers Are Back?

AJ Wong
Posted
  • Real Estate Broker
  • Oregon & California Coasts
  • Posts 674
  • Votes 537
Quote from @Trish Mccoy:

We just had 6 offers on a house up in Grass Valley, CA   It was a $329,000 price point however.   2 were all cash

Wow! The trend hasn’t even gone ‘public’ yet…these were just buyers sidelined at 7%+ rates and paused due to the impending doom..Pending a major unexpected socioeconomic interruption I’ll hypothesize rates touch below 6% for extremely well qualified buyers and there’s a brief stampede of sales through end of Spring/Summer. 

Post: Growing interest & demand for merchantable timber and carbon credits..any experience?

AJ Wong
Posted
  • Real Estate Broker
  • Oregon & California Coasts
  • Posts 674
  • Votes 537

Howdy! 

I’m a investor focused real estate broker on the OR & CA coasts but have recently seen a spike in interest and demand from investors, some with quite significant and prominent reputations, seeking merchantable timber lands and properties. Aside from conventional harvesting and land returns several have expressed interest on account of carbon capture and credits.  

Additionally several recent $100M+ closed transactions have closed nationally led by institutional investors and hedge funds pointing to a growing area of investor interest. 

I was hoping to connect with some brokers or investors with logging and investment experience in OR or beyond, as I would like to educate myself and build a network of brokers that can help facilitate larger and more complex transactions statewide. Also I think it’s such an interesting area of real estate that seemingly will be more critical and valuable over the near to long term. 

As an example of future growth potential happening NOW, a large local lender recently sought my cooperation as they work closely with several active portfolio investors and requested help in identifying quality potential properties for investment.


For example: how do investors assess value? Is it mostly based on board feet and underlying value of cleared land? 

How do carbon credits influence value and projections? 

Some of this might be beyond this resource but I will update as my experience in the area evolves. We’re in tentative discussions on 200+ acres with 3-4M board feet of Douglas Fir, Alder and Redwood.. 

Anyone ever been party to a timber appraisal?

Oh and what’s the commission? Just kidding. 

Thanks! 

Post: Multiple Offers Are Back?

AJ Wong
Posted
  • Real Estate Broker
  • Oregon & California Coasts
  • Posts 674
  • Votes 537
Quote from @Dylan Vargas:

@AJ 

@AJ Wong Welcome! I had seen a place online 3 days ago, fixer, good price and rural Northern California town. Agent had 9 offers in first day, all offers were 15k over asking. Very interesting I thought. Good luck and keep us posted.

Yikes. Yes I think the limited inventory was restrained as sellers waited out the winter, now it seems there is considerable pent up demand, if rates continue to drop it could be a very very strong summer market.