All Forum Posts by: Jonathan Orr

Welcome @Pete Cordero, sounds like you are already on the right track.  I will tell you from personal experience in my young career that when I made the jump to go full time in this industry it has been a roller-coaster of frustrations and excitement.  However, I would not trade it for the world.

Also, don't think that your portfolio is a ways off.  Before you know it, with dedication and the right tools you will turn around and be surprised at the amount you have accomplished.

One tip I would share is to get involved in local Real Estate investor groups in your area.  I know this website has a bunch.  You can also find a good amount on Meetup.com.

Get involved and network, that is one place where good opportunities (and some bad) will pop up.

Good luck!

Tamerik

Sounds like a cool idea. Being on the opposite end of the country my advice would be to approach the land owners you have identified and ask if they would like to JV. This would give you some equity from the land maybe some further cash equity from them.

Also, I would create a Offering Package describing what you want to do and potential returns. That would give you something credible to give to potential investors you find (family, friends, doctors, local REI clubs, etc...)

Good Luck!

@Scott Lepore everyone here has given great advice and I second all of that.  Assuming everything is good (no environmental, correct kind of zoning, etc.) it should be easy to have the mechanic involved as a putting the land in as equity.  This may or may not (depending on land value) be able to have the equity requirement for construction financing, most likely you will need some further equity though.  

From what you briefly wrote I could probably tell you that the zoning may be a commercial general zone which would require a zone change or a conditional use permit (both of them are lengthy processes). 

In terms of moving forward and after you find out more details, I would talk with your mechanic and get a agreement together so both of you are involved. Then you can take it to larger developers as a JV deal (HAVE THEM SIGN A NDA FIRST). This would get you the necessary capital from a JV investor and everyone wins by making a potential profit.

Good Luck!

I have started doing some mailers and I was talking with a friend who is working with a guy who is doing a lot of seller financing commercial deals.  It sounds very interesting, however I am looking to those that have done a lot of seller financing deals (no money down) to see how they structure it.

I know how seller financing works, however I want to know how you typically see the most success in deal structures. Do you find more success in getting a 1st then having the owner carry a 2nd?  OR would it be easier to try and have the existing 1st transferred over and the owner carry the remaining portion? any pros or cons would help

If there is any other ways you have done a seller finance deal, please let me know!

I think the first thing if for the daughter to figure out how much debt there is.  I think she should talk to an accountant or attorney to handle that.

When it comes to your side, sounds like a killer lead.  Do you have an idea of what you think the property is worth?  If you have that, I would make her an offer and then you can always offer help on the credit card debt like finding out that info or providing some referrals on people to talk to.  She may be able to settle the debt so all of the money from the sale of the property.

It is no fault of your own when you send out mailers.  If you were to do all of the DD when sending out mailers I don't think you would ever be able to get the number of mailers out there because it would take too much time.  For example, I just started with the mailer idea and a mentor told me that when you get someone interested it is all about working with the owner and being more of a friend than is willing to help then just a "give me your property" mentality because you never know what the situation of the owner is.  You situation is a perfect that you can truly provide some help and everyone can win in the end.  Of course you still need to keep in mind that you are running a business and not a charity.  Still need to stick to your guns so it is profitable for you.

Good luck!

@Michael Montalto Try a site called loopnet.com  you can potentially catch a good property on there.  It is dedicated to mostly commercial sites but they do have a land filter.

When it comes to subdividing lots it can take time or it can be quite simple.  It really depends on what you are planning on building.  If you are doing a tract of homes that isn't zoned for residential you may run into rezoning issues that requires city approval with alot of hoops to jump through.  To make it simple, subdividing lots requires months to do.  It isn't a couple weeks or days.

@Daljeet S. that is a 40% return and a 18% annualized return over 2 years.  

With the limited info it really depends on what kind of return you are looking for and if you can be without that money for 2 years.

Is this payment overtime or an equity stake that you will receive your return at the end of 2 years?  Will you be cashing out completely (meaning that you get your 200k + 80k at the end of 2 years or just the 80k and the initial equity stays in longer?

Being a developer myself I think that is a ok return on a development, however it really depends on what you want in an investment.  

I know some people that would do that deal all day long.  However I know some that want more flexibility or a fast return.

With that money you can use it to buy and flip but the reason why investors don't do that is that it requires alot of work during that time period you are flipping.  If you want to be a passive investor and let the money work itself then I think this development opportunity is the way to go.

If you don't mind the work and have a game plan in flipping then you may be able to make a better return a little faster but time = money and  you have to decide is your time worth flipping houses or other things?

What type of development is it?

@Edwin W. Like I mentioned before.  If the deal works for them on a feasibility scale then it is a play for a "after entitlements" developer.

To protect yourself you need to make sure you have all NDA's and things in place before ever showing deals to anyone.  However, from my experience those that entitle properties tend to put them on the open market so they can receive a premium for them which can constitute a bidding war of sorts.  Just recently I was marketing a deal that I am currently getting entitled and I showed it to several people that just wanted to low ball me, it wasn't till I had a broker put me in touch with a couple guys that I found someone who I matched well with.  That is the one problem with "off market" things, you get a lot of developers who know that if the project is stuck at a point they hold the cards.  

Just end my point, you can wholesale any project at any point.  It just needs to make sense for everyone.

@Edwin W. you are on the right path.  When wholesaling a deal, especially in development you need to have just as much information as a broker/agent who has a listed property.  By telling them the best path and use of the property along with estimated costs is something that will be necessary.

@Manolo D. is absolutely right about this.  Wholesaling just isn't about getting a property under contract then trying to just sell it off.  A lot of research will have to be done to know who to pitch it to.  Especially in development where a lot of developers have niche product types they like to build.  So if you have a retail play and then go to an industrial guy, it will fall on deaf ears.

My recommendation once you have this information is to approach their acquisition guy or even the owner.  There are a lot of developers (like myself) that are just a couple guys, they aren't big corporations (there are some out there though) because we can do everything from underwriting to entitlements and so on....

I have some flips going and my business has recently started to grow bigger than my contractor can keep up with. Does anybody have a general contractor who is familiar with flips? By that I mean, they don't charge too much, can get in and out quick and are good at communicating. The flips I am doing are in Southern California (Mostly South Bay)

Keywords: Los Angeles, IE, Riverside, San Bernardino, SoCal, rehab, handyman