All Forum Posts by: Alex J.

We're working on one now that's got about 2,000sf of first-floor area. It was gutted to the studs when we bought it, so no demo/cleanup costs to speak of. Our budget is $125k and we will spend every bit of that and then some.

This is on top of the $50k the seller had to spend doing mold remediation prior to closing because he didn't leave the HVAC running when he moved out after Harvey.

I would advise against making a flood house your first flip, but if you're going to do it, have a mold inspection done BEFORE you agree to purchase. Get your mechanical trades over there to tell you what's going to be required (lots of times you have to upgrade what's there, not just replace what got wet).

 Gotta be a bit more specific. A few different area types depending on your risk profile and desired return

A area: think montrose. My fav area of Houston. This is where our HQ is and about 1/2 our units 

C areas: SE inner loop. 5th Ward. Etc. might be other C areas outside the loop but not even I will do bad areas that are also in BFE 

PoP area: path of progress. Think 3rd ward. Other areas that’s are “bad” but “oh so close” to the good stuff. This represents about half what I have for a data point 

BFE: Katy (bleh) sugarland (bleh) other boring burbs. Good options if you want a handful of SFH. But most MF will be $100k/door B product and 4 CAP (maybe low 5)

So if I were to pick one spot for MF I’d say midtown or montrose if you can find a deal, 3rd ward or EaDo if you can’t 

We own a duplex in Los Angeles with FHA financing under personal name and considered moving the property to an LLC but we were advised that a change in title and/or adding new construction will cause reassessment of property value for property tax UNLESS the property is moved to a trust. Based on prop 13, you can move properties in to trust without causing reassessment (consult with lawyer for the type of trust that is allowable to avoid tax increases under prop 13 rules). Also, if you have a residential mortgage on your property, you cannot safely move it into an LLC (could trigger due-on-sale clause) but you can move it into a trust without triggering that clause or negatively affecting your interest rates. Properties held in trusts can have residential mortgages while properties in LLCs can only get commercial loans.

If you need a name of a lawyer to establish trust or other RE holding entities, PM me. 

Hope this helps