All Forum Posts by: Andy Eakes

What part of San Diego? I know a pretty good guy! PM me

@Jessica Walker Most finance books will tell you to get out of debt before you invest. What would make a lot of sense for you though, but might not fit your plan, is to house hack. You buy a multifamily, live in a unit, rent out the others, and either lower substantially or eliminate a housing payment for yourself. That way you have more money to pay off your loans sooner. Then you can invest more! I understand you might have to leave for sanity, but house hacking may be a good idea for a little while. Then you leave without debt!

@Elena Fabri Do you plan to purchase this next deal through the MLS? If so, I would find an investor minded agent. If you listen to the podcasts and love BP, I would find an agent who is active on here. Just so you two are on the same page. An investor minded agent can find the deals for you, that way you can still manage your busy life. They'll find some good properties when they come up (sometimes before they hit the market) and then you can come in and do the analyzing, and ultimately make a decision. But if you can nail down what type of property you want, how much you can afford (pre-approval letters recommended), and where you are interested, you have a much clearer path.

@Garrett Smith Hey Garret! Sorry about missing out on that property. I am a buy and hold investor as well and let me tell you, it takes a lot of patience in some markets. Are you looking for turn key properties? Or properties that need a little work? For my team's investments, we tend to look for properties that have room for growth through some rehab. Never anything big, but enough to add a little value at a good price. That way we know that we are setting ourselves up for a good appreciating market. 

I would say that if your plan is long term, as long as the market has decent hope for the future, and you were to get a property for even just a little bit below market value with room to grow, you can make the quick repairs needed, and just sit on it and collect. That's the beauty of long term investing, good markets tend to always go up over long periods of time even with corrections along the way.

@Kari Morales Welcome to BP! Have you thought about where you might want to invest out of state? Good luck with your investments! Reach out if you ever need any connections locally in SD too.

It depends on what kind of investing you want to do. Some people like turn keys, others like to BRRRR, and so on. For me, I am a buy and hold investor. While I do not follow the traditional BRRRR or flipping methods, I still like finding properties that need work. So, I look for things in the listing such as older homes, dated looking styles, descriptions in the listing that reference investors, flippers, or something like "Needs TLC".

Those properties allow for room to grow with the property, you tend to not have to offer against families like you do with turn keys, and you have the chance for a great deal. And as you analyze deals in your area of choice too, you'll start to know what certain properties should be worth, and then you can work backwards. 

Good luck!

@Daniel Orozco What would be the purpose of the LLC? I don't think you need one until you have a property. Or is there certain protection you need as a wholesaler? I am not sure, but what I do know is that there will be some costs related to having that. If money is tight for you, that may be a way to save a little money and use it toward finding deals. But, I'll tell you that the best way to get deals as a wholesaler is to have a consistent "flow" or system that keeps leads coming in. The biggest mistake you can make is to put all of your energy into 1,2,or 3 properties, get them or not, and then have to start over from scratch again and again. You want your eye in the market at all times.

Make sure you are consistently seeking out potential leads, consistently sending letters, knocking on doors, etc. and consistently be making offers and connecting to potential buyers. This helps build momentum in your business and prevents slacking because of a lack of focus. 

Good luck!

@Ryan Martinez The property was in "almost turn-key" I would say. There was a few foundation and roof issues that didn't need immediate attention, but because the properties are empty currently and we have the credits, we went ahead and did that. There was also some floor damage from water in one unit and carpet that needed replacing in the other unit. We also decided to do some upgrades in the kitchens and bathrooms, as well as some configuration. So by our estimation, it'll all come out to about $50-60k. This could've been a lower number, but our goal is to get max rent and hold onto it for a long time, so we don't mind doing the extra work. And the market is so competitive here that we plan to wait until our next investment in San Diego unless some amazing opportunity came up. It is currently being worked on now. 

@Kenneth Donaghy 92104. The property is right between and perpendicular to Upas and Myrtle. And were on the part of Boundary where there is about 5 blocks until the freeway going east so there is no noise pollution. And the back of the property is technically an alley but there are homes that face the alley as if it were a street. That was actually something that came up in the title search. The alley at one point was a street that was later abandoned. So that delayed our progress a little in escrow, but it was quickly resolved. I am sure that happens often in North Park with all of the peculiar streets and alleyways.   

@Alex Verdugo There are numerous ways to get all of the information you are looking for. As far as looking for owners of distressed properties, you can call the local county tax assessor and use the address or the owners name to find out their latest address listed. Those are usually pretty current as they collect payments from homeowners throughout the year. Dont feel weird asking for their address either. Just tell the assessor's office why you want their info and they usually share what they can.

All of the other stuff can be found through background checks. You have to purchase them but they will tell you rent and criminal history.

Investment Info:

Small multi-family (2-4 units) buy & hold investment in San Diego.

Purchase price: $880,000

Two single family homes on a 6700 square foot lot. One 3bed 2bath and the other a 2bed 1bath. Generous lot and zoning allows for more units to be built over time. Current rent estimates with existing units though provide us good cash flow in a highly appreciating area.

What made you interested in investing in this type of deal?

The property offers two separate SFR that are properly separated. Property is located in a very desirable area that will bring in high rents. There was also room for improvement in the homes that will add major value right away. Also each unit offers 2+ parking spots for renters.

How did you find this deal and how did you negotiate it?

Found on the MLS. It was a unique situation where the owner passed away and his children inherited the property. They were very open to offering credits and we were able to knock the price down significantly from our original asking.

How did you finance this deal?

Through partners.

How did you add value to the deal?

Each property gets a new roof. Opening up the lay out. And adding a bedroom and bathroom to the front house. Back house gets new flooring and paint as well as a new roof. Both kitchens upgraded.

What was the outcome?

In the process of completing rehab.

Lessons learned? Challenges?

Patience. Lots of patience. We made over 30 offers and toured about 90 properties in order to find the right one. 5 months total time looking. It was very difficult at times. San Diego is a red hot market right now. Any investor-worthy property had 8-15 other offers. We learned to get creative in our bidding and the power of persistence and believing in your ultimate goal.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Yes hit me up if you're interested!