All Forum Posts by: Account Closed

Roger, are you going to be a lender or investor?  The answer to that question will dictate what is a reasonable return.  You mention that you will be doing the rehab on the flip.  Are you getting paid for this work or are you participating in the profits?

As a hard money lender, you might expect 12% and 2 points.  However, in the scenario you described, it appears there will be a first mortgage in front of you, reducing your security/increasing your risk.

As an investor, if you are putting in 50% of the cash required to close, you should expect 50% of the profit on sale.  This comes with its own risks, however, as any losses would also be shared.  How your services are structured and compensated will also play into the final 'fairness' decision.

The price you can get will be a direct function of how badly the developer needs your property.  Try to gather as much intel as you can.  If you do decide to sell, you can keep whatever you want out of the property as long as you detail it in the contract.  This could be a good opportunity, just don't sell yourself short.  Good luck.

Keep in mind too, a 20 year ground lease is not considered long term.  Buyers will find it very difficult to finance.  Shoot for 50 years or longer for more flexibility now and in the future.

Not sure there is a standard.  Here in North Texas, developer can expect to pay a lump sum to have electricity installed.  If you are big enough, you may be able to negotiate a better deal.  Other franchise utilities are usually a little easier to work with.  (example:  you might frint the cost for gas, but then enter into an agreement with the gas company to earn money back as new houses come on line and use gas).

Read the contract.  If they were within their free look period, there isn't anything you can do.

Do you have your survey from when you purchased?  That, along with your title policy will give you some protections.  I would assume you are in a subdivision.  If so, a plat of the lots should be on file at the county clerk's office.  This will show dimensions of each lot.  If she is encroaching, put her on notice by sending a registered letter (don't hand deliver).  In the letter you can state the facts and also state what you expect to be done (removal of encroachments or nothing).  If it is that big of an issue, it is probably time to consult an attorney.  I would also contact the realtor (if there is one) and make them aware of the situation and ask that they communicate it to the title company that will be closing.

Your attorney should be able to help you decide on the best route. You could form an LLC or limited partnership. Both have their advantages. I am unfamiliar with CA law, but if I were doing a deal like this in Texas, I would lean towards an LLC where each of you is a member and manager.

True.  However, after you rehab, if you rent it out for a year first, you can do a 1031.  Not a true fix and flip strategy, but it could work for some investors.

Check with your attorney, but it seems like a reasonable approach as long as you aren't laundering your money!

Based on the actual location of this property, you may be a little early to the party.  The value in this property would be as part of a larger assemblage.  You are far enough away from Trintiy Groves, that you are still in a heavily industrial area.  If you have money and patience, it could be a good long term play if you can continue to pick off surrounding properties.  As is, it appears to be primed for a tear down.  I'm just not sure if there is a market there yet.