All Forum Posts by: Jared B.

Anyone going to the L.A. auctions?

I'm a newbie and looking for info on pre-foreclosures. Maybe I missed something on this thread but...

It sounds like the owner owes $300k +/-.
They are trying to sell before it actually forecloses for $500k (can this not be done after "Pre-foreclosure"?)
They rejected the offer because they still have time to sell. and walk with SOME equity.

like I said i may have missed something, I skimmed the last bit.

How does a new LLC purchase rental property w/o credit history? Or better yet, how do I get around this obstacle?

I'm looking to get a property that requires a covenant to build the second unit (part f why I want it), yet to make the deal worth while to my partner I need it to be a rental. So I will own it through an LLC and rent from myself (waiving tax & insurance write-off). If I own it through an LLC is it owner occupied? Who and on what paperwork would that be qualified on?

Thanks.

I know this has been posted for a while, but if you're still waiting for some information I'd be happy to throw in what 2 cents I can muster. First off, do you have any idea what you'd like to do with the property? Single family homes, a golf resort, a commercial complex, a small community? 600 acres is pretty significant.

I 'm in L.A. and RS means is WAY OFF for our area even after their area multiplier. I design and PM for a general contractor and want to develop and study the numbers as much as possible. For starters I give homeowners the $200 sf price for turn key projects. They typically range from $180-$230 residential RETAIL (beach cities) depeneding on the materials the homeowner chooses. 50 units on the other hand is differnt than the typical SFR.

I would figure it like this, for rough numbers - Come up with a unit layout (or layouts), similar to what you'd be implementing on your project. Do the breakdown on materials and labor (not sf costs). Then multiply by 50 (or number of units). That's your rough costs for the units (on the high side because you should get a discount on P&O for each trade). Then add in site work, parking, plans ($4 sf), etc. At least that's how I'd do it.

Or 1000 sf x $160 (discounted for economies of scale) = 160000 x 50 = 8,000,000. That would be a ballpark number you could start with. You might be able to do better, but I wouldn't count on it.

Without at least a single unit plan it's hard to figure, 1000sf, they'd be 2bd/1ba, I imagine. What quality, granite counters, glass shower enclosures,...? Get specific and i'll see what I can come up with if you like.

Otherwise, chat with builders who've done one, like Jon mentioned.

FYI - 3 stories is still conventional light construction which is what I do. Let me know if you need a general, i can put together 10+ man framing and foundation crews that know what they're doing.

Good luck.

I'm a Project manager in a small construction company, in Los Angeles. We are in the south bay beach cities area, we do as much inn house as possible with about 20 in house guys and a number of subs that we supply 50% or more of their work for - we just don't have enough to keep them on staff. We are busy while everyone else is slow. General is 20 years experienced and very intelligent. We are all generaly competant, have integrity, & are efficient (I'd hire us - and i plan to). I know a number of other contractors and subs that I can recommend.

We would "reduce our basis by the depreciation we'd been taking over the years as the LLC owned the property". That's what I meant to say.

Thanks.

I want to go 3rds on a property with my father. His interest is the tax incentive to rental property (tax shelter). My incentive is personal residence, & building capital to develop. I'm trying to figure out how to meet both our needs in one property.

If we set up an LLC, and I have 33% ownership, can I still rent from the LLC and split the write off?

If I could do this, could I then buy the property (once I have the down), live there for 2 years and reap full capital gains?

(I know we would have to subtract our depreciation from our gains when the LLC sold it.)

Please help.

**********, I see your point. You've pretty much nailed where I'm at too. I've been reading everything I can find on pre-foreclosures right now. This would be my first deal, and honestly, as I intend to work my way into REI, specifically development (as opposed to wholesaling) I'm currently trying to get into a personal residence (that I can develop, and begin building capital, of which I have little (a meager $45k to be exact). My father is my partner, he needs the write-off.

So that being said, I've found some good information from many including mitchnfreed as very helpful (other threads included). Clearly I'm scratching the surface at this point but I've gotta start somewhere. Here's what I've got:

1) Educate myself on the details of a Pre-foreclosure deal in CA.

Re: Foreclosure Consulting - Civil Code# 2945-2945.11 does not apply as far I can figure, I don't intend to request any money from the owner
Re: Equity Purchasing C.Code#1695-1695.17 doesn't apply since the property will become my personal residence.

2) Have financing in line and ready to go, as well as some "help-them-move" money (how much though?).

3) Check to see if property is listed.

4) If so, contact their agent (& then lender) through my agent (I need to find a new agent and now I know they need to be familiar with Pre-foreclosures). If not, contact homeowner myself, in a non-threatening way (my thought was to make it personal by explaining a little about myself/situation - hoping it would help get me in the door- via a letter (with my family pic, though some disapprove).

5) I should know and make them aware of their time-line and help educate them on the process of what they will be going through in foreclosure ("Foreclosure" not to be mentioned in a letter) and what will happen should they let me pay-off their mortgage. So they will better understand my position and theirs. I will not tell them I can save their credit, or make any other false promises. Also, refer them to a real estate attorney to back up any claims I've made, further shoring up the relationship.

6) Should they ignore my letter I would approach them personally at an undetermined point-in-time (maybe a week?) before foreclosure. I would try to get a friendly conversation going, soft sell, regarding what are they planning on doing - steering them towards their smartest solution.

I don't know how to figure an offer for Pre-foreclosure. What I've gathered is that current recommended for wholesalers is ARV less 30%, I would offer more, maybe ARV less 20-25%.

I'm learning at breakneck speeds here and am thinking about finding a mentor in REI, just not quite ready yet (currently I have you people). Anyhow, thanks for reading, helping, and any other info you're willing to pass along. It's all highly appreciated.