All Forum Posts by: Joshua McGinnis

@Bob Faulis

Thanks a ton for sharing this valuable information.

I already have your mindset; that is, I'm always looking objectively at property, no matter were I am, for signs of opportunity and demand. And while there are plenty of dilapidated and run-down buildings, that isn't always an indication of demand for a new development.

For your project,  I'm assuming you had to put together a full Market Study and Financial Feasibility study? Did you put it together or did you rely on a firm to help aggregate that information? I would certainly love get a copy of it once the deal is far enough along that you felt comfortable doing so.

Can you share what your piece of the deal looked like? It sounds like you put in sweat equity? If so, that's great - this is what I'm looking to do for my first couple of deals.

One of the things I struggle with here in LA is a bit of a chicken and an egg problem. The lack of available land or sites that haven't been overpriced for development is a challenging hurdle for a new developer such as myself. Our backlogged, expensive and challenging entitlements process is also makes getting a deal done in a timely manner difficult.

So while I have a handful of guys with capital or access to capital ready to look at any deal I put together, I'm having a hard time finding a deal with the returns that make sense.

I'm looking for a deal in the $5-10M range to get started. I'll no doubt need to partner with an experienced developer to give the deal more merit, but aside from that - I'll be packaging the whole thing.

I'm just wondering what pointers or tricks-of-the-trade you have for a small-time guy such as myself that is looking to package my first solid deal?

@Anthony Palacino

We tried the FB system and the letters. The FB system attracted poor quality / unmotivated leads. The letters did nothing - we did not get a single response.

That said, I'm in a challenging market. I can see how these systems might work in other markets so what I would suggest is to budget some dollars to try it for a couple of months and see what kind of results you get.

Welcome to BP @LOn Levin

@Bob Faulis

Thanks for sharing the details of this project.

I'll tag on a couple of question as my friends in the private equity are all telling me the same thing right now: there's a lot of capital floating around and a shortage of deal flow.

How did you find this particular opportunity and what kind of deal with the land owner did you put in place to make the deal work? Did you do an option? If so, what did it cost to lock that option up and what kind of terms did you get?

I'll have plenty more questions based on your response as I'm actively working to put together my first development deal with outside equity.

Thanks again!

Welcome to BP @Esther J. Chun

I wish you lots of success in your new career.

@Ford Smith

Many of us were in your shoes once.  A little over 12 years ago, I was near homeless with a 500 credit score, medical bills out the wazoo, and working a $10/hr tech support job!

I can now say that I'm doing quite well for myself and am in the process of writing a book about my experiences to give people like yourself some insight into how to make it happen.

That said, there's hope. My advice would be that you should not focus yet on buying a home and instead focus on two "big picture" things:

- Increasing your income

- Decreasing your expenses

Sounds really simple - but people lose site of these two important concepts. If you aren't laser focused on these two, your other goals just won't be possible. 

I tell people all the time: I can tell you how to get a six pack, but you have to do the work.

First of all, is it at all possible for you to get out of this sales role that has you're financial life in a roller coaster? Certainly you've got some skills that could help you land something with a consistent and strong base pay?

How long as your wife been in this HR position? Is it time to ask for a raise or look for another job where she can take on more responsibility and get paid more?

Have you run your credit report for both you and your wife to see what creditors you have that are driving your credit so far down (especially your wife?). Look at: https://www.creditkarma.com/

How much do you spend on housing currently? Is moving to a cheaper state an option? Remember that sometimes big results require big moves.

When I first started building credit, I had 3 - 4 medical bills in collections and they ranged from $50 to $250.

The first thing I did was dispute every. single. one. If a creditor cannot prove the debt, the collection will be removed from your credit report.

The second thing I did was call all of the collections agencies and I asked them to renegotiate my debt (NOT settle it as this will further adversely affect your credit). Make sure you say that you do not want to settle, but you want to know if you promised to pay $5 or $10 a month, would they be willing to forgive some portion of the debt?

Have you tried looking at sofi.com, prosper.com, lendingclub.com or other alternative financiers to see if there's an option for refinancing that student loan debt?

$180K is a lot of debt. I would consider speaking to a bankruptcy attorney to see what your options are there. They may be able to help you file bankruptcy or force the creditors to renegotiate the terms of the debt so that you have a better chance of paying it back.

Unfortunately, I don't think student loans can be written off in a bankruptcy at the moment - but it's worth looking into.

Have you setup a budget? Try mint.com and https://www.youneedabudget.com/. You need to be tracking and budgeting every single penny you two earn.

Once you have a handle on your budget and you have committed to the discipline of only spending what you earn, you can sign up for 1-2 secured credit cards and start using those for purchases you were already going to make in your budget.

Lastly, I also recommend joining the community and making a post over at: https://creditboards.com/forums/

There's a lot of smart people there that know tons of tricks to helping you build credit fast.

I hope this helps. YOU CAN DO IT.

Hi @Ludmila Hill

Welcome to BP! We'd be happy to assist you in your search. Just shot you a PM.

I hear you. But I do wonder who these uniformed masses are that he's talking about.

Our clients are generally professionals in their 30's - 60's who love this city and are scraping every penny together they can to try and buy now before they are out-priced. When there's little inventory turnover or little inventory being added, there is some truth to wanting to buy now vs. in the future when prices will inevitably be higher or trying to time the market for a fluctuation that swings in their favor.

I suppose I just don't see the world in the same way this blogger does. Our market isn't made up of a bunch of zombie buyers so house hungry that they are forgoing all logic to buy any shack they can get their hands on.

The only people who CAN buy are those disciplined to save and have the education / smarts to generate enough income to support the high prices. This demographic does not skew to the irrational, uninformed or impulsive.

@Doug N.

I'm not sure I follow your logic here.

You cherry picked a single listing, which I agree is over priced, to support your argument that somehow an overpriced unit is indicative of excess supply and price stagnation? That doesn't make sense to me.

Not only that, you grabbed a crime map screen shot of an area for which you do not live. That the market will bear higher prices in places like East Hollywood, which happens to be undergoing gentrification, is an indicator that there is excess demand and that buyers are expanding their search area for housing.

I think a lot of people look at LA (from here and afar) and ask the question, "How is this possible? It CAN'T continue."

We have record low unemployment, an influx of Chinese and international buyers, 40K homeless (the population of a small city unto itself), overcrowding and a challenging bureaucratic building process that inhibits developers from building fast enough to meet demand.

I caution against relying on "gut" or "speculative" opinion-based outlooks and stick to the fundamentals. I would never advise someone to buy/invest in LA purely for value growth or to buy beyond their means. I advise folks not try and time the market, analyze each deal independently with both your exit strategy and a contingency plan in place.

The market is not "over-extending" itself credit-wise. On the contrary, all-cash offers and multiple bid scenarios continue dominate the marketplace.

There will be corrections along the way, but LA will continue to face shortages, high prices and growth over the long-haul. We have the weather, the jobs, the opportunity that makes this area continue to be attractive across the globe.

That's not quite what I said. 

A flip is not adding sq. ft (in my opinion), it's usually dealing with the existing structure and improving upon it. 

That said, I think there is a lot more opportunity for investors by adding sq. footage than doing just flips - if you can get approvals and stomach the time/cost involved.