All Forum Posts by: Will Barnard

3% EMD is standard here in So Cal (at least for MLS listed deals). 15% is a lot to ask so I would have to question why seller wants so much. Perhaps it is how you came across or perhaps the seller is unreasonable. Either way, everything is negotiable.

Regardless of the EMD, you should have a true and proven cash buyer already in hand for this deal, that way, you can use your cash buyer's money for the EMD and put them on the contract direct with an agreement for your fee. Sounds like you put the cart before the horse and found a deal before you found a real cash buyer.

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So you haven't been wholesaling the last month, you have been attempting it. One month is not a long enough time to get discouraged already, it can often take many months to get on the runway and complete a deal. It is no easy task. 

Website with SEO, door knocking, driving for dollars, and direct mail are all options. I would suggest casting as large of a net as possible and stay consistent in your marketing campaigns. Adjust over time as you see statistical results (that you should be tracking).

Have you hooked up with any cash buyers yet? If not, you should get going on that now, not later and shop for what they want/need.

Most deals are going to be found/created by motivated/distressed sellers (off market) meaning you find the seller before they get to an MLS listing. I don't buy over list price but I have bought from the MLS here in So Cal and in all cases, I added major value by adding a lot of square footage (mostly knocking down 95% of the home to rebuild new. This may or may not be an avenue in your market.

The 70% rule is NOT a rule, it is a simple guideline for a quick back of the napkin analysis. Do not make your investment decisions based on the 70% rule, 75% rule, or any other rule (more accurately - guideline). Price points, location, extent of rehab, and market conditions will determine how much the 70% guideline will need to be adjusted for your quick analysis. Good luck finding a 70% deal in price points above $300k these days. If you have a quick and easy rehab, you can adjust to a higher all in % of ARV as your hold time should be less. Same if your market is hot for sellers. For deals where you need to hold longer, have more risk via time, more risk via level of rehab, etc, you need to adjust the other way.

Ultimately, one must run a full detailed financial analysis for each deal to determine if it is a buy or pass.

Your hired structural engineer should have provided you with what is needed to bring it up to code. None of it looks or appears to be a deal killer, albeit I don't know all your numbers. Certainly not something that I would run scared from, in fact, you should be able to use the engineer's report and suggestions to renegotiate a credit or price reduction for these hidden items.

Paychex has a good program where they handle the paychecks, tax withholdings, workers comp withholdings, etc. Sounds like a big project so if you want to be above board, you need workers comp insurance, payroll taxes, and ensure you follow the rules/laws.

For accounting purposes, I love Quickbooks but a simple excel spreadsheet can work just fine too.

Time is your enemy when flipping. - Will Barnard

Build systems to increase efficiencies. - Several people told me this.

Job out tasks that are below your paygrade - J Scott

Much of what I learned was from doing, making mistakes and doing my best not to repeat those mistakes.

As others pointed out, the entry steps are a serious tripping hazard, the support posts may need to be reinforced and the bricks should be filled/sealed in all bad areas and then painted (your most inexpensive option). If this was in CA, I would stucco over all the bricks. The siding looks like it was done very poorly and completed for the windows the previous owner must have installed. Painting the bricks and the siding could make a world of difference on curb appeal. I would be more concerned over the entry and porch for liability purposes.

$1000 per window is certainly outrageous. Do not use big box stores for installation services, hire your own contractor that specializes in window installs and framing.

As for doing it yourself, you need to decide if you are running a business or working as an employee for your business. There is a huge difference between the two options. While you think you are saving money installing windows on your own, you are also spending time you could have finding your next deal, finding your next private money lender or any other task fitting your pay grade. Any experienced window installer can do this task for $30-$40 per hour and have 8 windows installed (with 2 guys) in a day. S0 for around $560 in labor + taxes/workers comp, overhead, etc. (lets round up to $1000) and plus the material costs ($2k-$3k), you should have this done in the $3k-$4k range without doing it yourself.

As you stated, you have loan docs which stipulate there is no pre-payment penalty, as such, the note holder can not legally deny acceptance of payoff, no matter their reasonings. They have no legal right to do so and your attorney may want to remind them that creating any delays or attempts to refuse payoff will be met my legal action, including attorney's fees. SO if they hate their tax implications, they will certainly hate legal fees even more.

This is NOT to be construed as legal advice as I am not a licensed attorney in any state. Please consult with your attorney on this, everything above is just opinions of non attorneys (although I agree with them).

SB9 is yet another failed attempt of CA politicians to "fix" a problem. This is Newsome's idea of showing how he beat the recall and that he is doing something for CA (what a joke). Gascon's idea to fix prison overcrowding is to just let them out. Wow, deep thinker.

 To perform a lot split on an existing lot with an already built home, the new bill allows requirements from individual municipalities to set minimum lot SF and layouts, there are utility easement issues, and most existing homeowners will not want to split their SF lot on their primary residence. As builders/investors, sure this may open the door for additional opportunities, but in the long game, this bill will do little to nothing to resolve CA housing/homeless issues. 

The SB and AB's that were passed for ADU's were much more effective in creating additional housing, but still just a drop in the bucket for what is needed and the costs to build the ADU's are skyrocketing each month due to labor and materials costs, not to mention material shortages due to supply chain issues which are getting worse, not better (that's across the board for all states, not just CA, but more heavily felt here as Long beach is a HUGE port not currently even close to full operations.)