All Forum Posts by: Steve Jones

Hi Megan, for seller financing I would offer the seller some type of interest that is better than what banks are offering and perhaps a little less than typical hard money financing, say 8%.

That way if the seller isn't in a big rush to get all his money up front this is an opportunity for seller to make a bit more money.

I would also propose a non-refundable (ie hard) deposit to give the seller some confidence in your ability to manage the deal and see it through.

I hope that helps!

I would also ask to see lease agreements and see if any tenants are violating their lease agreement.

If so there is an opportunity to raise rents or evict them.

I have done cash for keys in the past and don't see it as unethical at all...both parties are in agreement and both parties benefit!

I have purchased and lived in two different 4-plexes over the last 10 years. Both of the 4 plexes have a 5th bootleg unit that generate additional income but for financing and insurance purposes they are considered a 4-plex. I have great tenants and I don't mind seeing them coming and going.

It has worked out great for me.

@Account Closed Yes, you can find properties that cash flow, my rule of thumb is 30% down for multi unit properties.

Most of these will require some type of sweat equity.

Please be aware of rent controlled areas, mostly in LA.

Agreed with @Archie Robb. Once you do the work yourself you can turn a property around, there are plenty of properties for sale where rents are way under.

Most of LA is under rent control so please be aware of that.

Long Beach does not have rent control, you may try looking there.

I would recommend developing a THOROUGH scope of work for your rehab. I think it is OK to have the contractor you are thinking of doing the rehab walk it with you. I always get 3 estimates from contractors before I start the rehab. Walk the property with ea contractor separately...each contractor will notice things that the other ones may have missed. Depending on what you want to include on scope you can modify the scope after each walkthrough. Ask each contractor to see if there is anything you may have missed, the point being to be as comprehensive as possible from the beginning so you don't get nailed with change orders at the end. Your first price from contractor will always be best, be as thorough and comprehensive as possible AT THE VERY BEGINNING. It's a great way to learn and train yourself to see things. Good luck!

Good units attract good tenants!  The first thing to do is take a hard look at your rental units. Would you live there? Correct any substandard issues. Next make sure you screen them in advance, get a credit report and check references. I have lots of good tenants. 

Assuming your investors are passive (not part of any day to day dealings of the flip), if you can show them a proforma where they are making a nice return on their investment, then a 50/50 partnership seems fair.

You do all the work, they provide the funds, everyone wins.

My advice is give them 60 days notice. That is plenty of time to find another place to live. End of story!

I am interested in forming a partnership with some equity partners where they fund the purchase and renovation of apt buildings. 

 I find the buildings, oversee renovation and manage them. 

This is a long term buy and hold position.

My equity partners are for the most part silent.

What is a typical split in this type of partnership?

Thanks so much.