All Forum Posts by: Justin Bonney

With the change of a few questions was able to secure earlier this year (almost closing) a property from a client of ours we are buying for well below market here in Los Angeles. Property lot is 12,600 and with SB9 laws in effect next year we plan to develop it eventually. First thing is to add on and renovate, rent and refi (BRRR) and then get plans to build more.

Purchase price $580k paying sellers costs

Current as is ~750-800k in this crazy market, doing conventional N/O/O Loan with 20-25% down and appraiser scratched his head after seeing price and said he would bring it down to avoid lender asking a million more questions, appraisal came in today at $680k.

Was originally going to add an ADU 1200' from the ground up and have an ARV of 1.2-1.3 but with the SB9 plans, we are looking at subdividing lot and building 4 units, possibly 6 with 2 being ADU's. So future ARV after this will be 2.5m-3m, granted we will have to spend money to build but will be planning to do 3 homes in addition to the one already there.

@Joe Semifero

the lender was Valchris Investments.  Sorry for the late reply.  Got off the blog and been listening mostly to podcasts. My spam jumped up when I got on BP and started inquiring/subscribing. Only so much I can do at a time. Hope all is well with you.  I am out of note investing for the time being as the returns were good but I wanted to be more aggressive and glad I switched retirement accounts over to stocks/etfs and mutual funds. Returns since switching dwarfed lending...for the time being that is.

@Joe Semiferoundefined

Likewise.  Looking to network with local people. 

Saw this one too.  Damn! 

That was a good deal, I missed that one. Glad to see it got a facelift, walking distance to me. 

Investment Info:

Single-family residence private money loan investment in Los Angeles .

Cash invested: $36,000

Self Directed IRA financing 40/2 loan for acquisition, note rate 12%

Have done several private loans over the last 10 years after taking a break from rentals.

What made you interested in investing in this type of deal?

Low amount to invest, safe yield inside retirement account. At the end of 2nd year, principal returned would be $35917.46
Total cash received after 24 months, assuming all goes well is $44980.10

Decent return and allows me to get my feet wet.

How did you find this deal and how did you negotiate it?

Mortgage broker.

How did you finance this deal?

Self Directed IRA

How did you add value to the deal?

None, I can extend the loan at the end of the term, not sure if I want to offer this to borrower.

What was the outcome?

Steady eddy cash flow.

Lessons learned? Challenges?

Need software and systems to scale up servicing.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

They are ok. The deals they are offering are looking riskier and the appraisals a little too aggressive. Always proceed with caution since the lender gets origination fees and may not do the best DD in my opinion. Funded several deals now and always say to study up on borrowers more than the property. I have helped many owners of rentals reposition their portfolios with this approach.

@Stuart Smith thank you for creating a great question and post, enjoy reading and learning more about areas and opinions of others in the lower price points.