All Forum Posts by: David Song

I am in Bay Area and currently looking in Hayward area. Just purchased a 5 unit in Hayward with reasonable cash flow. But the main goal is still appreciation in Bay Area. Some areas that I looked at: Stockton, Fresno, Merced. But I finally decided to stay within 1 hr driving distance to avoid hassle.

Originally posted by @Andy Collins:

If you paid $365, rehab is, lets say $30 based on the last figures (with nothing built in for issues), you have $395.

If it sells for your high estimate of $465k, less 3.5% for the lower selling commission, you have $448,725 IF you have absolutely no issues with the rehab and you sell at the top of your possible sales price.

I just don't understand why you say "about $80-$90k pretax profit"?

 I am an RE broker. So I get 2.5 % on the buying side and only pays 2.5% when sells (to the selling agent), which cancels out. So only need to calculate the purchase price + rehab, and compare to sale price. 

Please let us know how it works out at the end. Not sure if the quote covers both labor and material or just labor. The price is so low that I can only assume it covers labor and part of material. I am a GC and this price is barely enough to pay the workers. I am in CA. Watch out for change orders later on. Good luck.

Just closed the deal and got the building permit yesterday.

Paid $2000 for the building permit alone. I went to the building department and trying to get a OTC permit using a dry rot/termite repair report. The technician said no and I have to use my GC license to get the permit. Got to the city hall around 3 pm, the last person to leave the city hall (around 5 pm). Fortunately, I don't have to go back again. 

Also, surprising, they want a floor plan (instead of the dry rot report). Fortunately, I had prepared one as a backup and that was used for the permit. 

Here is my current estimate on the remodel portion (rough):

1. Demo and Haul away ($1000, accurate price from an Amigo)

2. Labor (2 guys that I employ at $300/day for both, estimate about 5 weeks work (30 days), total bout $9000).

3. Materials:

TBD, estimate $12000 - $15000

4. Permit fee: $2000

I got some pictures before rehab now, and will post when I got more time, along with the building plan.

This happened once to me before. Here is what happened: House was in SF area, ca. Offer:around 400 k With inspection contingency. They ask to sign an addendum, w strict terms favoring seller. The inspection contingency automatically expires after a certain period, which is very different from typical CA practice. The countdown is from full execution of the contract, however, not from verbal agreement. The house has a lot of code violations. We had to meet w city number of times to figure out what happened to this house. It is in south San Francisco, the code officer told me that this house has the thickest binder in city history. It turned out that an old garage was demoed by the Fannie Mae upon city demand. Now, the city wants a new garage built meeting current setbacks, which will create a nightmare. We decide to cancel and the listing agent threatened that the government has lawyers who loves fighting. They will keep the EMD. However, in the Fannie Mae addendum, there was a paragraph, drafted by their own lawyer, which states that either party may cancel the contract at any time if there is code violation blabla. I called the listing agent and ask him to check the addendum himself with Fannie Mae lawyers. I implied that his License might be in jeopardy. I believe that the listing agent is the one that has the real motivation to keep the deposit. In a week or so, without any explanation, they signed the release. Check your addendum carefully. Find a valid reason for the cancellation. Did they disclose everything?

This is in alum creek, 4 bed 2 ba, Lot 6500 sf Floor area about1200 sf 1car garage Rehab: kitchen bath floor, roof, a couple windows. For rent: budget 10k (about 2-4 weeks) For flip: budget 25 k ( about 2 month) If we sell it right away, there is tax issues I have to consider. (About 80-90k pretax profit). After tax, about 50k-60k. If we hold it for a couple years, an addition might be worth it after a few years. Can add more spaces to about 1800 sf and another in law legally with the lot size. Probably worth around 700-900k, depending on size of addition. bTW I am a broker and general contractor. I save about 2.5% both ways when flipping. It is very difficult to find good deals these days in Bay Area.

This is in alum creek, 4 bed 2 ba, Lot 6500 sf Floor area about1200 sf 1car garage Rehab: kitchen bath floor, roof, a couple windows. For rent: budget 10k (about 2-4 weeks) For flip: budget 25 k ( about 2 month)

Just got a house under contract, SFR in San Jose, ca $365k price, rehab, $30-35k Rent estimate: $2400/ mo ReSale price: about 430-460 k and maybe a little higher depending on market All cash deal Any suggestions would be appreciated. I have a couple other property for rent already.

Looking for investment properties, either flip or hold. Love to work with wholesalers.