All Forum Posts by: Scott E.

Your options are probably pretty limited. I'd start by talking with a local expert (another landlord or a knowledgeable real estate agent) just to get their opinion on the matter.

It's possible you can escalate this to the inspectors supervisor or request another opinion. But as @Alex L. stated, this is all stuff you probably should have taken care of during your rehab.

If the entire house looks run down like this, then no it does not make sense to spend your money on any renovations.

If the rest of the house is nice and clean and these are the only eyesores, then yes you should renovate these areas.

Yikes. You hear about these risks but it's rare to get real life examples of these massive 'special assessments'

I'm curious what happens when half the residents just say "I'm sorry, I literally do not have the money." The HOA I suppose would put a lien on their property which would only be repaid upon resale?

Thanks for sharing. Sorry you are going through this.

If you buy right (the right house, at the right price, in the right zip code, in the right neighborhood, on the right street) then you are almost guaranteed to significantly increase your net worth over the next 5-10 years by owning the home that you live in.

Even though a lot of people are fleeing Southern California, I think most would agree that it will be a growth market for real estate over the next 5-10 years. Los Angeles is one of the top appreciating markets in the country, appreciating at an average of almost 10% per year for the past 10 years.

This means that if you bought a home for $800,000 10 years ago, that home is worth about $2,000,000 today.

Will your town see the same appreciation rate over the next 10 years? Highly unlikely. But you hopefully you get my point here. The direction of real estate over a long period of time is up, especially in a market like LA.

In my opinion, when you live in a growth market, anybody who says that you should not own the home that you live in is foolish. Especially when you have the VA loan available to you, meaning you can buy your primary residence with no money down.

Just my 2 cents. Also... thank you for your service.

A lot going on in your post... here is my feedback:

-Forget about the first contractor who isn't responding.

-The 2nd GC is a referral. That's good IF you know and trust your lender. A referral is the best way to go for a job like this. You want to find a GC who somebody you know and trust has had a RECENT good experience with.

-Forget about the third contractor from Opendoor.

-Bathroom renovations out here run me about $7500 each when I hire a GC, which includes labor and materials. This figure will vary a LOT though based on the size of the bathroom, the amount of wall tile, whether or not you're putting glass in, the cost of the vanity, etc. Plus it'll vary a lot from one market to another.

-Material cost for the bathroom renovations is easy to calculate. Here is your list: Flooring, baseboard, paint, toilet, vanity, sink, faucet, mirror, light, bathtub, wall tile, shower glass, shower fixture. Price everything out at Home Depot or build.com for a point of reference.

-Some GC's ask for 50% down. So yes it is normal for them to ask, but I would counter with splitting the payments up. Perhaps 33% in the beginning, 33% at a certain milestone, and 33% after job is complete.

You do not need 70-80 buyers to be a successful wholesaler. Start smaller. Try to build a list of ~10 buyers, and target homeowners in neighborhoods where those 10 buyers are interested in actually buying.

As far as I understand, bandit signs are not legal in most areas. Although you do still see people break the rules and put them up (they get taken down pretty quickly). I'm a cash buyer but I don't think I've ever called on one of these signs (and I've driven by a ton of them).

If I were you I'd spend an afternoon looking at every house that's for sale in your area and every home recently sold in your area, and pick out the ones that were obviously flips. Then contact the listing agent and let them know that you are a new wholesaler and trying to build a list of cash investors. These agents will happily put you in touch with their clients if you bring a deal (because they will likely be getting the listing once the flip is completed).

Quote from @Scott Mac:

Quote from @Scott E.:

Quote from @Scott Mac:

Quote from @Scott E.:

If you look at just the cosmetic kitchen components, you end up around $15k-$18k on the flips I'm doing. These are in old 1950s ranch style homes that had pretty small kitchens to begin with. So the size of the kitchen helps keep your renovation number down. But this figure is only accounting for the cosmetic stuff like cabinets, countertops, appliances, sink.

When you start factoring other details as @Bruce Woodruff outlined like drywall, paint, plumbing, electrical... that figure goes up a lot. For example if you're replacing the water lines, the sewer line, installing can lights, etc. Those "behind the walls" items really add up.

People seem to like canned lights in a kitchen, but the light output from them (to me) seems shadowy, and not very much use when cooking something. 

I think a better bang for the buck (in a personal (upscale) home) with these lights is as wall washers in the living area and to point at individual art pieces, but that's not the trend, which seems to be--put them in the kitchen ceiling.

They don't do that in food service. Those kitchens are lit up like day time.

Just my 2 cents.

I love that look... thanks for the picture and inspiration.

Regarding can lights.. I've got them throughout my house and put them in most of my flips. But the key is to have them all on dimmers. Full blast is almost always too bright. But if you dim them down 40%+ depending on the room, they can kick off a nice even light.

Note that the art wall has no (code required) electrical outlets, or wall switches, nothing but art.

The trick if you have to have the outlets on that wall to meet code requirements is to move them up behind the art pieces (hidden from view).

You should also notice the  flooring is at an angle to draw the eye wider into the next room vs just straight on at the art, making it ambiance vs  point of interest.

(I like this sophisticated look too).

Just my 3 cents.

 Also a nice touch how the crown moulding ends around the vent covers...

Quote from @Scott Mac:

Quote from @Scott E.:

If you look at just the cosmetic kitchen components, you end up around $15k-$18k on the flips I'm doing. These are in old 1950s ranch style homes that had pretty small kitchens to begin with. So the size of the kitchen helps keep your renovation number down. But this figure is only accounting for the cosmetic stuff like cabinets, countertops, appliances, sink.

When you start factoring other details as @Bruce Woodruff outlined like drywall, paint, plumbing, electrical... that figure goes up a lot. For example if you're replacing the water lines, the sewer line, installing can lights, etc. Those "behind the walls" items really add up.

People seem to like canned lights in a kitchen, but the light output from them (to me) seems shadowy, and not very much use when cooking something. 

I think a better bang for the buck (in a personal (upscale) home) with these lights is as wall washers in the living area and to point at individual art pieces, but that's not the trend, which seems to be--put them in the kitchen ceiling.

They don't do that in food service. Those kitchens are lit up like day time.

Just my 2 cents.

I love that look... thanks for the picture and inspiration.

Regarding can lights.. I've got them throughout my house and put them in most of my flips. But the key is to have them all on dimmers. Full blast is almost always too bright. But if you dim them down 40%+ depending on the room, they can kick off a nice even light.

A handful of comments...

1. If they say the space could rent for $20.00/SF, that means $20.00/SF/YEAR. Meaning a 1,000 square foot space would rent for $20,000 per year.

2. Office/Medical space is great. I've done 2 of these deals in the past couple of years. In my sub-market there is good demand. I ultimately sold both of them for nice premiums once the spaces were leased.

3. If the $20.00/SF is a gross lease, you need to account for paying all of the expenses. Which means your net number will land probably closer to $15-$17/SF (again, per year)

4. Commercial loans are amortized over 25 years. And they usually balloon at year 5. But this will vary based on the lender, the lease, and the loan product you choose.

5. Yes commercial real estate is harder to rent out. The expectation my broker set with me is average 3-6 months to fill office/medical space.

If you look at just the cosmetic kitchen components, you end up around $15k-$18k on the flips I'm doing. These are in old 1950s ranch style homes that had pretty small kitchens to begin with. So the size of the kitchen helps keep your renovation number down. But this figure is only accounting for the cosmetic stuff like cabinets, countertops, appliances, sink.

When you start factoring other details as @Bruce Woodruff outlined like drywall, paint, plumbing, electrical... that figure goes up a lot. For example if you're replacing the water lines, the sewer line, installing can lights, etc. Those "behind the walls" items really add up.