All Forum Posts by: Jay Hinrichs

@J. Martin

agreed out of state ownership involves a certain set of patience discipline and trust.. then throw in some luck and choose wisely.

@Rolanda Eldridge

I like that flip / flopped was not thinking about that.

the reality though so many deals are started with family..

good advice from Rolanda ...

I grew up In a Real Estate family my dad was a RE broker and developer so it was just kinda what we did

@Joe Bertolino

for this reason Cental Oregon died on the vine.. K falls Bend area ( although bend is bouncing back) people would sell in CA and pay cash for Oregon properties. but then central valley and foothills properties devalued and why move to Oregon.. we have the highest state tax in the country and it rains all the frickin time.. Although Southern Oregon is more like N cal.

If your familiar with Yuba city and Beale airforce base you may be familiar with Hammaton Smartsville road that runs up the N side of Beale to intersect with Hwy 20 and then up to lake Wildwood and Nevada city Grass Valley,

Any way back In the late 80's I was project manager for a the subdivision just up from the base.. I was there last summer its all built out. but only a fraction of what we had approved..And phase 5 of Wildwood got built out as well..

@Account Closed

Kathy no brainer it does not get much better than this for a group of family members embarking on a fix and flip..

And of course the lender would want to be named insured that goes without question ...

this is totally fair and hugely slanted towards you in the big skeem of what s out there in investor capital ... lucky you

@Account Closed

Your post is such such a foreign concept to those that do not live in the Bay area... and or understand that a 1950's 900 sq ft home in Palo alto is worth 1.5 million.. for that money in the mid west say Detroit that would buy you literally 100 homes that will rent ( if you can collect the rent) but I will just surmise you can.. for 700 a month and so cash flow would be 100k a month gross were in the bay area that same Palo Alto 1.5 mil home would rent for 5 to 7k a month again our MId west friends will gasp at those numbers.

So you can see why folks go East young man go east

@Brandon Sturgill

Brandon when you asked if I manage the project myself I almost fell out of my chair... I am not qualified in the least to do project management. I hire those that are... For me I know what unit cost are and look at the big picture but I hire the guys that are smarter than me to actually do the work..And or build the houses. I am a finance dude and not bad at that .. So I stick to bring in the dough and let those guys build the house.

On a small project like your talking and if its all you have going on then its probably wise to roll up your sleves and get I the trench's there is not a lot of supervision money to go around on a 35k job.

@Brandon Sturgill

my first thought that is a lot of draws for such a small project.

a 35k rehab would be a 30 day project to maybe 45.. why 6 draws.. are you doing them weekly so 6 week schedule.?

Normally if I was on the lending side of this. I would give a first draw a middle draw and final once everything is complete.

But I do forget its not like west coast were we pay our subs ONCE a month. their bill has to be in on the 1st and they are paid on the 10th... If they are late even a day then they are paid the next month..

But if your working with guys that have to be paid weekly ( and I know that's how it is in the mid west predomiatly I can see why you need 6 draws for a small rehab job.

@Ali Boone

on another thread one poster asked how to amass wealth or great wealth, with great wealth being described at net worth of 5 to 10 million.

The point the CA investor makes is that it is wholly possible to get to the 5 million mark buy buying Passive CA neutral gear to slight negative gear properties. My point that I made was what I know growing up in Cupertino in the 60's and buying my very first home in Milpitas for 70k.. during the 60's and 70's you could buy a home for the same price in Palo Alto as you could in Kokomo Indiana or anywhere else in the mid west ( were Quote un Quote Cash flow homes are bought ) And if you say bought 5 of them in Palo Alto and kept them for rentals long term One they would have cash flowed like crazy after 10 years or so. And 2 they would be worth today 7.5 million for 5 of them and you paid 30k for them back in the 70's same with ?Cupertino.

Now you could have paid 30k for a home in KC, Memphis, Indy, virtually any of the soup de jour cash flow towns.. same time frame same price points. Well those homes today are worth... Yes maybe 60k and they would not have cash flowed over time anywhere near the CA properties.

So what I tried to point out is this is just regional and in a lot of ways was just luck and passive investing to the extreme.. Just happened to live in one of the greatest place's on earth and the market took you for a ride.

@Account Closed

Bob what would you have paid for a Honolulu home in the 70's that's worth 500 to 1.5 today... I know one of my bizz partners just bought a fixer for 1.5 over on the other side of Diamond head.. right across the street from that crazy Japanese billionaire that owns all those ocean front places that sit vacant.. I heard Baldwin bought all of that for 100 mil or so..

Out of state is fine for some but as Bob points out its not a big money game its a slow cash flow game and your cash flow can go backwards on you very quickly if you don't have the right teams in place. or you guy low end C property and live in CA and expect it to perform like A or B.

One thing about CA.. the market will take care of bad rental situations over time. Bad rental situations in the Mid west cash flow market ( IE bad tenant loss of value because of trashed home or what Ali described as she lost money getting her rentals straightened out) Can in many instances never be recouped.

@Mike D'Arrigo

One must always remember that in the foreclosure epidemic half of the foreclosures came from Land lords that failed... And logic only dictates why would a land lord fail... and let a property go.. 1. because its not performing ( biggest reason) 2. strategic default property so far underwater and rents don't cover the investor walks..

I know of one Terrible turn key outfit out of Salt Lake that I did a few HML with back in 05 and then saw what they were doing with the long term buyer and I stopped after 2 or 3 loans. But someone else funded it and the owner of the TK was also a mortgage broker and they did about 100 homes in this one town ( all in the lowest price ranges) Many never got rented all of them had conventional loans on them and ALL went to foreclosure over the ensuing years as investors just walked.

Out of area investors Need to proceed with Ultra caution and make sure those they work with have impeccable creds.. And then choose the high end of the market not the low end.. Low end is just plain tough and a Huge Risk in my mind.

@Onan Dumas

Agreed... my old company Silverado funding here in PDX. If you call and ask to make an app.. first thing you will hear is fine send 2 years tax returns credit app and do you have cash. and if you want a building loan the lot must be paid for free and clear an prove you paid for it...

That is what banks do.. but banks are still not really lending you need to be A paper have a ton of reserves and experience.. and even at that they may not lend to you. . I got turned down at one bank last Jan. I wanted 300k on a 650k value.. my bank did the deal but I was just looking to bring another bank in. I had 150k cash into this deal.. and they still would not do it.

@Kristi Miller

Kristi the fact is that California investors drive a huge portion of mid west rental property purchases. along with Aussies Canadians and GB...

The whole turn key concept was born in LA and SF.. When properties in these areas just escalated in the last 80S...

@Account Closed

And as bob states Hvac issues are real in the mid west and in most cities its theft that you need to worry about.. Some cities like Memphis the thefts are just off he charts.. I was doing a closing in Atlanta last year and was at the closing attornies office and asked why it was so hot.. ( my condenser units were stolen last night) and this was a nice part of Atlanta not the hood at all....We just don't have those issues by and large on the west coast.. but to be fair and balanced I did have my first unit stolen in Oregon last year..

On a personal Note I lived at Silverado CC from 90 to 2001 and was and is one of the great places in the world to live.. Now Napa is far more congested than it was in those days but still Not many places in the entire WORLD can compete with living in the VALLEY... Enjoy your time there and good luck on your rentals.