All Forum Posts by: Gilbert Dominguez

Jay, has given you some good advise, Get a real estate related job like being an agent, you have drive and a good work ethic. It would not hurt to set yourself up with a career that will provide you the money and opportunity to build the credit you will use throughout your real estate career. It is very very hard to get started buying properties with no money , little money and no credit and also not much experience. That is very hard to do honestly. Extremely hard to do. 

I am 62 years old now and I remember the first house I bought, I was 31 and it was 1984. It was an owner financed deal at 15% for 15 years. It was also offered no money down and I got in with paying only closing costs then of course I had to purchase an insurance policy. I had plenty of construction experience so I was able to do all the maintenance myself. The property had 2 houses on it so I lived in one and rented out the other but it also needed to be rehabbed. I remember I took the money out of my 401K to do the rehab but things got started for me then. I had not however ever given a thought to making real estate a career . In fact I did not know the first thing about real estate. I simply picked a house for me and my family that I could afford the monthly payments on. It was not until later years I realized real estate was a good investment. I purchase that property in 1984 for $42K and in 1989 I sold it for $100K. I did not keep track of how much money I put into doing the rehab of putting a new plumbing system or new electrical system nor the drywall which I completely replaced plus painting and a little landscaping. I was just amazed someone offered me $100K for it. That there was a gain to be made with real estate hit me as something simply enough to understand. I then began to find out more about doing due diligence as I had to pull permits for the remodel I did. It was then I was introduced to rehab and permit cost and other issues like easements present when I began to think about selling the place.

That I know of until now you are only allowed to solicit what are known as accredited investors, that is someone with a history of two or more years of earning $200K/yr or have a net worth of $1M. Then you have to have a way of verifying that. Otherwise you cannot solicit investors. I would strongly suggest you contact a real estate attorney or a securities attorney for clarification. 

Paul Z.,

I could not help but notice you are in Illinois. I myself have been looking into doing a condo conversion in Chicago and its seems like a terribly complicated matter there. If it were only as easy as in Texas, from what I read others post on here. First you may be subject to a parking requirement on a per unit basis. Then you may be required to install a fire sprinkler system throughout the building. Then you may have to install fire rated walls and ceilings and possibly any shared wall may be required to be both fire rated and sound rated. That is just to start. You will definitely need an attorney to draw up all the corporation papers, articles on incorporation, by laws etc.

Look up the condominium ordinance for your city or the city the building is in that will guide you as to what all the requirements are going to be. 

I would certainly do a comp on condos of similar size and room count as what you have in mind for your building to ascertain if it will even be economically sound to do the condo conversion.

I would start with a search word here on the internet for the city your building is in. Then I would narrow my search to applicable laws, then of course next I would consult an attorney in the particular city your building is in. I think you are going to agree that in Illinois it will be a very complicated process but then again if it makes economic sense to you then you might decide it will be worth it. The building I am looking at has units that rent from $650.00 to $800.00/mo. However the comps for condos or townhouses are int the $190,000.00 range. But I foresee a very complicated and lengthy process and one that is not going to be cheap at all. I am also dealing with what to do with the existing tenants. This further complicates the matter on the building I am looking at. 

It will certainly go easier for you if you will be dealing with an empty building. However I doubt that you will be because any building worth anything will have a good percentage of the units rented out already.

So I would say you answers will be location specific and you should start with your city planning and building departments and a visit to a good local attorney who has experience with condo conversions.

Yasmine, 

 I am a professional construction project manager and what the others say is true. Most smaller projects will not think to use a project manager but they are the ones that will end up complaining about how long a project took to complete and be crying about ending up paying over 70% over budget and scared that the house they built will not sell because they have their lenders breathing down their neck for payment of their loans. 

Professional project managers are typically hired by larger operations and more expensive real estate projects because they understand the value of a good project manager. 

So I would say market yourself to higher end investors. 

One of the things I like the most about GCA is that they will pay me for everything I do on a project so I am getting paid for my time and work not only profiting at the end from the net. 

Christopher Telles, 

No I have not used them before but I am in the process of putting deals together that they will put up the money for. I will post later and let everyone know how it goes but to me its a sweet deal if you know what you are doing. I myself am an architectural designer with over 30 years experience building so they are a perfect fit for me and they have deep pockets so I can go after bigger deals. I think I can go after a few hundred to a few thousand units with GCA but of course we will start smaller and as confidence builds up I will go after the big fish. 

Sellers want to sell but do not want to work hard at it and they certainly do not want to pay for the service of assistance with selling their properties. Buyers also do not want to work hard at finding good deals. They want someone who will bring them the good deals at their feet without having to work much at it at all. Wholesalers are not guaranteed to get paid so they also do not want to invest much work in putting their deals together or they simply do not have the resources to do a thorough job. 

This is how the , " screw everyone mentality is born".

Yuenchi Ho, 

This is what I might do if I were you. First get all 50 properties under contract. The fact that you have them under contract and available to buyers is already worth something. Lets say from $350.00 to $500.00

next start to list your prices according to how much work you put into evaluating each property. If you verify comps that is worth X number of dollars

If you verify repairs that is worth X number of dollars more

Just make a check list and every single thing more that you offer than equates to X number of dollars more you will charge for your assignment. That is fair. You can also use this method to determine if you can offer any kind of a deal and select your best deals and sell them at a premium. 

Just go for it. You will find this is something you will get over especially after your first few attempts. Real estate is a numbers game all around. You may make 100 offer and only a few will get accepted but make sure those are all in your favor and if they do get accepted that you have thought about it carefully and that is will truly benefit you if you do get a deal. 

Do not make deals just to make deal because later you will have to face the consequences of getting yourself into the deal whether they be good consequences of bad. Remember its always allot easier to get in than to get out and every step is a transaction and transactions cost money. 

Don't build your hopes up to high and be prepared to get turned down it happens all the time in real estate. 

I would not be in a  hurry to get the place rented although obviously that is your objective. However think of the long term consequence of selecting a bad tenant meaning someone that is going to give you problems with the rent being paid on time or other problems. 

Its not your fault if they are people who manage their life poorly although you can feel sorry for people at times remember you are renting as a way to generate income for your business and that is just how you have to manage your decisions. 

First of all where is the property in comparison to where you live? Can you self manage at some point? You started out by saying they were a group of properties but then only spoke about one single duplex with one upper unit and one lower unit. 

You just left too much out to get a clear picture of the real situation with your property(ies)

I would say hold on to them because the rents will eventually go higher. Whether you can immediately improve the properties and get better rents I could not say because I do not know the area they are in. Do you have any money to fix up the place, make improvements and so forth?. How would your property in its current state compare to properties in the $50K range? Zillow is frequently way off base with their property evaluations. However if there have been other very similar properties in your area that have recently been sold for closer to the $50K range then I would say try to see what you can do to raise your property up to the same value. 

If you did sell the property what would be your plan to do with the $11K you would net from the property? It all depends but I would say once you have a property that is all paid off then hold on to it until you realize a gain from it. 

What size is the lot and what is the current zoning on that lot?

We just need more info.