All Forum Posts by: Arlen Chou

@Luz Pagan I would suggest that you document your process of rehabbing the property.  When I did my first property, I took lots of pictures and a ton of notes.  On subsequent projects I showed the contractors my work, so they knew I was "in the know" about their business.  It allowed me to negotiate with the subs from a base of knowledge and not frustration.  I also quickly learned the language of construction and I was able to communicate my needs and wants much more clearly.  Use this frustration as a motivational moment to make you stronger for your future projects.  

Post up pictures of your project when you are done, it is always cool to see what people have done.

Good luck to you!

@Luz Pagan this is pretty typical in a hot market if you are a new player on the scene.  The contractors will support their returning customers or larger jobs more intensly then smaller low margin jobs with a new client.  I personally either do the work myself or contact subs directly to get work done.  The subs move from job to job at a much faster rate then the GC's.  They make more money the faster they move.  In your case it sounds like your GC is using your job as filler work in case his subs get an opening.  Depending on the work that is needed, pulling your own permits is not that hard, it just take a ton of your time until you get use to the process.

@Mike Gehm I have done this to buy additional properties. My home is in the SF Bay Area, so I had a ton of equity in it. I pulled a giant HELOC to pay off the first and used the rest to buy another property. The new property now directly pays for the entire HELOC essentially paying for itself and my primary. I pay down the HELOC as fast as I can so I can then be ready to buy another property if I find something. It allows me to look like a cash buyer so I can close much faster and make more enticing offers.

@Account Closed you should probably discuss this with your attorney instead of an open forum like this.  She could find your post and use it against you during your proceedings...  I would suggest that you focus on either getting the marriage back on track or pull the trigger and part ways.  Until that point, you should probably be in a holding pattern or at least until you talk to your lawyer.

@Eric Knittel I structure my deals on shorter terms, 1 year max.  Amortization rates are really up to you too.  I ask for 5% to 10% depending on the situation.  I don't use a lawyer, I write it up myself and have it notarized.  Depending on how close they are to me, I may or may not ask for points and I may or may not ask for security.  I don't lend just because they are "friends or family".  The use for the money must be sound.  I probably ask more questions then a HM because I know more then money is on the line.  If you are going to borrow from family, you better not default or Thanksgiving will suck... hahaha.

@Alec McGinn my personal strategy would be live like a student until we got pregnant. That means housemates cheap beer and rice/beans. 4% interest on your student loans is cheap money. I would pay the minimum until my fiancee/wife got a job and pushed our house hold income over the $160k cap for tax deductions. I would also look into the equity on my home and go for a HELOC. I would potentially use the HELOC to buy another property OR I would use it to pay off the student loan once our HH income no longer allowed me to take a deduction.

@Abigail Timbol you have a classic case of too much available information putting you in a place of fear.  There is an endless supply of books, pod casts, guru info training classes etc.  If you keep educating yourself, you will notice patterns in the information that is presented to you.  As you recognized them you will come to realize that you already know "that"... 

What you have to get comfortable with is your own ability to overcome. Will you press forward no matter what or do you feel like you might cave under the pressure? Only you can answer that question. But the simplest way to test your knowledge is to have conversations bout REI with like minded people. Do as many have suggested, go to meet ups and surround yourself with like minded people. The emotional support of these meetings are as important as the information you gain and you will be able to flex your REI knowledge and get immediate feedback. As you get comfortable in these groups and talking to people about REI, you will become more confident.

You will know when you are ready to invest when the fear of NOT doing is greater then the fear of making a mistake.

Best of luck to you!

@Scott Stover listen to @Jay Hinrichs he knows his REI. Also a little bird told me that there are some serious discussions within FB about building their own housing. If they do that it will definitely improve the area even faster. Also @Robert C. makes a good case for RC, tons of change going on in that area.  @Anthony Addessi has also been very bullish on that city for a long time and seems to be killing it in that market.

@Cody L. yeah there are tons of crazy stories out there so watch your 6.  I went to UCSD so SD has a special place in my heart.

@Cody L. the days of the wild west are gone in CA.  It is great that you were able to make some extra cash, and I think that is the way it should be... However, that is not the way the law works.  You have to be extremely careful these days as tenants will take you to court for frivolous things just in the hopes that you will pay them to shut up and go away.  If a tenant were to get hurt in your cave they could tie you up for years in the court system.  They could even make it up and just point to the fact that the unit is not up to code.  You could be paying thousands of dollars before you could even prove that it was not your fault or it was a false claim.

As an example entitled tenants tying up the court systems I give you an ongoing battle of mine. I have been fighting tenants about the status of some condos that I own.  They were saying that Costa Hawkins should not apply on them because they believed that since I had purchased multiple condos that the units should be treated as an apartment.  Even the City sided with them even though I had separate APN's and sales transactions.  Needless to say, I went through the county court and won, they appealed and we went to the State Court of Appeals.  I eventually won, but it took 3 freaking years and a ton of money and time.  The circumstances are different, but the point is the same, a tenant can tie you up for no other reason then they think they have a right...  

In my case I had the law on my side and I knew I would win.  But to build a unit without permits or inspections is what the guys who faced the Ghost Ship fire in Oakland did and take a look at how screwed they are now...

@Daniel Auriemma it is not a matter of IF you will find yourself in court, it is a question of when.  When you do get there it is important to remember that the law is not about what is right or wrong, it is about what you can prove.  The fact of the matter is that as you increase your net worth, more people will try to take it from you.  Take the time and spend the money today to protect your future self.