All Forum Posts by: Jay Chang

Why wouldn't you leverage your property if you can get a loan for 4.5% and use that loan to invest in another investment to make 10% or more? It costs more money to hold a property by using debt, but you are able to make even more money by investing your loans.

Of course, if you don't have good alternative investment options, then pay down your loan as much as you can. 

Pay attention to employment diversity. Stay away from cities that are high on retail, construction, and manufacturing jobs. These types of jobs don't do so well during a recession. 

Thanks everyone. I'll definitely talk to a SEC attorney when it's set in stone. Just wanted to poke your guys' brains a bit. Very helpful advice. Appreciate it!!

 Julia,

The cost is $/SF based on the square footage of the building. What are you building exactly? The $/SF for a below grade garage is different from that of above grade parking garage, a apartment building, a retail building with just core and shell.

For example, the cost in LA right now is about $185/SF for hard cost for apartments. Core and shell is about $150/SF. Above grade parking is about $60/SF. Hope this helps.

Core and shell means not including any finishes, like cabinets, bathroom accessories, wood flooring, etc. The tenant will be installing the finishes. You're only building out the structure andthe MEP.

Good luck.

Let's say I'm creating a 506(b) to syndicate a deal to buy apartments. Is it practical to open it up to foreign investors? Assuming I have just (1) one investor from Canada. What's the additional cost for just one (1) additional country, roughly speaking? Would love to hear about your experience.

Thanks in advance!

You don't necessary need to lose money each time you fire a contractor. By keeping 10% of retention of the contract value and carefully reviewing the progress payments, you can save enough money to fire and hire a new contractor.

Obviously this is not recommended. 

Before you hire a contractor, make sure you ask for references and tour the projects that he's currently working on. Vet them out!

Good luck.

Talk to a family and friend. See if they're interested in investing with you. If you put someone else as the loan guarantor, then you might be able to get the loan. I don't think you can get away from 25% down, so you'll need to raise some capital.

This could be a great experience for you. If you want to scale, then you'll need to learn how to raise capital.

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@Mike Mullins

Why is the lower level renting at $1,000 a month only? That's only $0.33/SF. Did you talk to a broker or do some market study in the area? Retail can give you significant cash flow if it's at a decent neighborhood. You could even divide the 3,000 SF into multiple shops to get more than 1 tenant in, but you'll have to get permit from the city. It's a lot of work relatively, but the retail can give you significant upside.

Without looking at any market study, I'd say the deal is worth pursuing, so spend more time on a market study and talk to other investors/brokers familiar to that area.

Feel free to ask me any additional questions.

I invest in Los Angeles and Phoenix. The job diversity is great in these two cities. Population and employment growth in Phoenix is strong. The population growth in Los Angeles is not the best, but I see a lot of upside in the next decade as a result of improved infrastructure and the upcoming Olympics.