All Forum Posts by: Frank Wong

Hi Jason,

I had purchased a property in Dallas Ft Worth market with no mineral rights rehabbed and sold with multiple offers.  No issues in selling.  It was also a seller's market and my finished product was nice enough for buyers not to care.

The other properties I do own that have them and I  lease out to an oil and gas company.  I think they pay like $44 or so a month.   I think what's more important is the actual house, location, rental numbers, and upside.  If everything else clicks go for it.

A crash is a very specific and dangerous word.  I think of 07-09 markets.  This market looks nothing like that.  Both markets driven by completely different factors.  It's possible the market can crash, sure I am open to all possibilities.  I won't be selling everything preparing for an unknown.  I will, however, be looking for deals should prices come down and I see opportunity.  

Now I think if you are over leverage, this is a great time to scale back.  Sell the worst deals you have and keep the best.  Remember cash is a position.  

If you are going to buy a house to live in you will need to have a min time horizon of  6-8yrs.  This will allow you to recoup any closing costs you had to pay on the purchase.  The time will also allow you to sit through whatever real estate cycle we are in.   As for price.  Buying something below your means at a comfortable price is best.  You can live your normal life without making sacrifices on everyday things. When prices start to stall or fall the high-end market goes first.  If you need to sell and its a buyer's market.  The high end is the hardest to sell.

In the long term, Bay Area real estate is very resilient.  There is a lack of land to develop new homes which create scarcity.  History has shown that prices appreciate over the long hall. Regardless of how strong each market is, all markets go through different cycles.  They go up, down, and sideways.  Depending on your timing and perspective.  This may or may not hurt you.  Holding power is key.

As for out of state investing.  I think if you are going this route you want to scale and buy multiple homes.  This way its worth your time.  The out of state properties I have I self-manage.  I have my family to help me.  If I didn't it would be very difficult.  Ideally buying a rental property locally is the way to go.  

Hi Gabriel,

I think it is a great way to make some side income.  Be prepared to work after 5 pm and weekends.  The mobile notaries in my area make about $150 per signing.  If you are targeting real estate professionals you will need to get familiar with loan documents and closing settlement documents.  In my case, my clients are very busy so using a mobile notary is something I always use.

Hello Anita,

The house hack idea of yours can work.  If your current home is at market value and you sell the home to get your equity out.  You can buy a home in the areas you mentioned that needs rehab work in which you can add value.  In order to make this work and worthwhile.

1. The new home will be below the price of your current and monthly payments much lower.  This way you will lower your current monthly bills.

2. The property has enough value to add to warrant your time and efforts to do a rehab. 

If it's a bad deal and your agent keeps pressing you to buy or sell the property.  I think you show them the spreadsheet or explain to them its a bad deal and you are not interested.  This way your agent will know your point and you can both be on the same page.  When I represent my investor clients.  I think open communication is best.  I give them my honest professional advice and they give me theirs.  I see us as a team and I help them achieve the goals they set forth.  

Now if you are buying a deal.  I would not show the other agent the spreadsheet.  What I would do is break down the cost associated with buying and rehabbing the house if that's what you are doing.  I will also stress the time factor.  How much time and energy you will have to exert to rehab their house.  

Hi Darryl,

1. You need money to put down as a down payment to finance the home.

2. You need rehab money like Mike mention of 30-50k is about avg. 

3. You need to be able to know the ARV of your flip. For example, the house you like is $80k the rehab cost is $35k (new kitchen, baths, floor, roof, paint, etc). Comparable homes that are finished in the neighborhood sell for $160k. Now you have a deal that can net you some money. This is the very important step. You have to find comparables sales in the same neighborhood and schools. Don't go into fantasy land and start pulling comps from other areas. Being great at this will save you from losing lots of money.

4. You need money for closing costs and holding costs. Another $8-12k.  Holding costs can be a mortgage payment, insurance, taxes, electricity, water, garbage. 

5. You need to find good contractors and trustworthy ones.

6. Keep looking through BP there is a ton of useful information.  Watch youtube videos.  Tons of free content out there.  Keep looking at this stuff everyday. 

7. After doing all the research and reading, the best way to learn. Go out and do it. 

Hi Hien,

It really depends how good your mentor is.  I have no issues with half the down payment but half the monthly cash flow seems steep.   Is mentoring his main source of income?  Is his net worth over $5 million?  How many properties does your mentor own?   Is this person going to get you where you want to be? 

If I were to choose a mentor I would want this person to be fully vested in real estate and have a net worth over $5m if I am paying this much money.  Why?  I need to know if this person walks the walk as much as he talks. The problem with many Gurus that they are actually Furus.  They know enough to sell their mentoring program to newbie investors who do not suspect anything.  

I am all for paying someone what they are worth.  They just gotta be the real deal.  At the end of the day, if this person gets you where you want to be.  Then it is worth it. The price is really determined by you.

Hi Patricia,

1. Freeway, busy street, and power lines (the large giant ones).

2. Basement in a house, major foundation issues. 

3. Warzone D and F areas. Won't buy there regardless of price.

Hi Gary,

If your true goal is to sell the property.  I suggest you just sell the property the traditional way.  You will have a larger pool of buyers and get the best market price for your home.  Trying to do a lease option to buy will require you to find a buyer very specific to your terms.  You may not get the price you want.  You may also get into a lease option and the buyer cancels down the road.   The big thing is tying up your house to an unknown when you want to sell.

Imagine if you signed a lease option in 2007 for 3yrs.  Would you keep it and continue to purchase the house?  I am not saying that this market is like the other.  They are actually very different.  The market is currently softening and no one knows where prices will be.  Everyone is just guessing.

Comps may show $1.1m but those are just comps.  Markets change and if there are no buyers for that specific price range then you have to lower the price.   At each price point there are buyers and through this run-up, some buyers aggressively bid on the house thinking they have to get it.  Some buyers drop off because it's not worth it to them anymore.  Now the market is finding a base of new buyers for a specific price range.