All Forum Posts by: Gilbert Dominguez

Here we go, my pet peve again. Folks understand this. That if you do not have any construction experience, do not personally know the tasks involved, do not have the right relationships or connection to material suppliers, do not know how long things take to get accomplished, do not know engineering requirements, do not know soils or issues involved with working with different soils, do not have experience dealing with city building departments, planning departments or civil engineering processes then building it not for you. 

New build projects are for people who have allot of experience and more than enough money to pay for a project to get done. This is one area of real estate where people go bankrupt, get divorced over, or get taken for every penny they have.

Get the message people ! Even those that do have plenty of experience will frequently go as much as 70% over budget and take twice as long to complete a project. This is not an area of real estate I would recommend any newbie ever gets involved with.

Let us say you do decide to take on a project of this kind. There are new construction consulting services and they exist for a good reason. At least take the time to have a talk with one. This is not the type of project you should do with unknown contractors. You should know who you can trust to do the project on budget and according to schedules and understand the processes needed to accomplish these two very important items.

My contractor took too long, My contractor over charged me, My contractor did not put in the finishes I wanted. My contractor did things without my knowing about it or my authority, My contractor................................................................. It can go on and on. 

These projects are emotional and very very stressful and they frequently end up costing you more than you are prepared to handle. 

Because of the time these projects take allot of things can happen, Workers will get sick or get into an accident on the way to your project. Materials can be delayed before they can be delivered to your job site. Workers can and do frequently get hurt while working on these projects. 

Your project will be subject to weather conditions possibly adding to the time required to finish your project. There are so many parts to a new construction project that things can get missed my your inspectors which by the way accept no liability for anything they may miss. 

Many things on your plans may require they be witnessed and signed off on my your architect or engineer. They may not be available for when you need them. Your project may require special inspections for which you may not budget for and be surprised to find out those special inspections will cost you between $500.00 to thousands of dollars and that is if you can even find the right kind on special inspector to come out and provide that inspection for you. 

How well do you know how to analyze a contract and properly or adequately cost out your entire project?

What if your engineer calculates that you will need to excavate 120 cubic yards of soil and remove it from the job site and then you find out its actually 900 cubic yards that need to be excavated and removed from your job site. 

How familiar you are you with calculating or the process of soil erosion and required city standards?

What do you understand about proper lot drainage or checking for easements and how they can affect your project? 

Will your project require city consul approval or even a vote from your neighbors?

There is allot to know so I hope you have the time to investigate and verify everything you need to.

I hope I have given you something to think about.

First of all as you have discovered its better to have something to hand out than having nothing at all. Just be honest. If you want to offer bird dogging services then say that and if you want to state you are a new to wholesaling also state that. Ask yourself why would anyone want to contact you? State what you can either offer or what you are willing to do. That would be a start. You can always amend your cards as time goes by. 

My experience with angel groups or VC guys is that the average investor is looking for a minimum of 10X their money. Good luck with being able to realistically offer than with real estate. 

Simply state you have made arrangements for someone to come out on Monday to have a look but do not commit to getting it fixed on Monday since you do not know what the repair company will say. Maybe they will need to order a part that might take time to get. I agree that if your tenant is willing to pay for the call then let them do it but state that its on them. The unit would not be fixed any earlier than Monday in any case that is what I think. 

Chris you can do what I did and that is to find someone that is good at the marketing part and setting me up with a good website and other marketing tools. Once it was set up for me then I understood how to use the tools to my advantage. 

There are usually one or more professional consultants who's job is it to help you with what is missing in your arsenal. They can turn your operation into a really well organized operation. 

Keep in mind that you are starting out with a plan. Over the coming years your plan of what you actually do will change. Maybe your end goal of reaching an income of $400K will not change but you will be dealing with changing markets and over coming various and constant variables. Remember that Uncle Sam will be waiting for you at every turn. You will need allot of people helping you realize your plan such as agents and a good real estate attorney of maybe many depending on where you end up buying. Be prepared to travel some in your venture of real estate investing. To accomplish what you have in mind today in one single market, things do not look so good for that.  But you are in San Francisco. You might accomplish earning $400K on one single deal there just depends on how well healed you get to be over the years.  Good luck to you. Make your plan, plan your work and work your plan. You should turn out to be a very knowledgeable real estate investor over the years to come. 

Mosun, 

I do these all the time and I have an engineer I work with and have worked with for over 9 years now. We do these all the time and that is why I tell you that you can get it done for around $2K. Just try different engineers in your area. You may find one that is reasonable in what he will charge you and we are in the San Francisco Bay Area. I have had many jobs on which I was quoted between $6K and $12K by other engineers and my friend did them all for me for under $2K so I know there are engineers that you can find that are reasonable in their charges. 

Well regardless whether he earns mostly commission that would still show up on his total earnings as reported on his income tax records. You can ask him for the past 3 years of income tax records and that will give you a better verification about his total income. As to whether you can rely on that for future income levels I do not think there will be a way to do that. You will just have to trust your gut on that one. 

The thing is that with a line of credit you will need to be making PI payments right away. That is not good for fix and flips although this is one way to generate your own capital after a few deals. I would be looking at buying an apartment building or a small multi maybe 6 units which will cash flow nicely and earn you enough to both make your payments on the line of credit and be able to put some money aside as well to build up your own cash reserves. It all depends on what else you have right now besides the line of credit. If you have other cash reserves which you can use to pay for a rehab then I might try fix and flips. Just keep in mind that the PI payments will not wait until you feel comfortable or until you sell a fix and flip they will be on going no matter what. This is why I would suggest you buy a property that is already cash flowing and calculate that the rents will provide for your cost of the line of credit money and then some. I would say then that my strategy for using a line of credit would be to use it to buy and hold existing cash flowing properties. 

However if you can afford to make the payments independent of what any property might generate for you then fix and flips might also work out for you. I just see more or a security, safety and comfort buying already cash flowing properties. 

Honestly I do not see how it could hurt you to get either your real estate agent license or your broker's license. If you do get your license I believe you will be all that much better off.