All Forum Posts by: Ke Nan Wang

Quote from @Samuel Jolicoeur:

Quote from @Ke Nan Wang:

Quote from @Samuel Jolicoeur:

Quote from @Ke Nan Wang:

Hi Sam, kudos on doing a open house on Saturday and use your time as productive as you can be. I'm from St. Augustine so we are 3.5 hour away. 

I totally understand your parents' concern. I would be if I was in their shoes. Just like my impression on the stock market. Many people made a fortune owning the right stocks, and I just seem to have okay experience with it. My overall stock portfolio is a net positive but nothing I have to show for. During COVID period my stock portfolio had like a 40% gain and I was happily thinking, yes, I'm doing it right by diversifying something from real estate into stocks. And I continued to putting more money into my stock portfolio, thinking it's the right way to do things, even though there were no reason to support my initial success other than luck and follow the trend. But this new woke culture war hit some of the big name companies really hard and I had a huge lost on them: Meta, Disney, Target, Nike and NIO (this is not so much the woke culture but just the company did not perform as expected). I invested in them at the peak of their performance and now they are all 40%-60% less and essentially broke my portfolio into pretty much even. I think overall I came up $15k ahead out of a over six figure portfolio over 3 years which is pretty sad but I'm fortunate that I didn't lose money. My mom had a similar experience during the dot com bubble crash time and lost her lots of money so she vowed to never touched stock again because she thinks she's bad luck with stock. 

With that perspective, I can imagine someone has a similar experience with real estate investing, if they started with a bad experience, they probably think they are born with bad luck and even though everyone is winning in real estate, they will think they won't be that person. 

I have a great plumber who works for me. Two days ago we just had a conversation, both him and his dad grossed $2M last year, their take home pay was $375k each, that's pretty incredible for a plumber. But he says both him and his dad only put money into CD's and money market after reinvest into their business. His dad advise him to not to play with any investment that has risk, in their mind, they think money in the bank is "safe". 

Life taught me that it's incredibly difficult to change a person's mind through outside persuasion, but it's incredibly easy, if that person just changes their mind themselves. So for these type of people, I just tell them, hey, just watch me. See how I'm doing. If you like what I'm doing and doing better and it's something you are interested in, then maybe I can help you. And I'll just leave it like that. 

My story right now is that I'm trying to work with more investors, providing values to them and help them with their investment. I do not sell, I show them what I have done and what my data is showing, I give them all the pros and cons I know. Slowly but surely, my credibility has grown in my market. I'm a slow but steady kind of a guy. And I put a huge value over networking and relationship and trust building. So I always carry myself with the upmost integrity and always do what I say. 

It's nice to meet you and hope you have some foot traffic at your open house, and better, get an offer. 

Thanks for reaching out to me, Ke! I’d say I’m a slow and steady kind of guy myself. Someone else in my shoes might have already pulled the trigger on an investment property with the capital that I do have, but I believe it’s important to have your nest egg. Networking is so important as I’ve seen, and I’ve been working it however it’s not been a cake walk being a young Realtor in a market locally saturated with more experienced realtors. That being said I am grateful for every small step forward, and at this moment in the aftermath of the NAR lawsuit I’m open to other avenues of moving forward in Real Estate beyond being an agent. I always like to have a backup plan.

I also am looking to work with investors and would like to be included on the BP investor friendly agents list however it is I can do that. To learn from them and see how they operate and negotiate and grow their money. After all, my real goal isn’t being an agent, it’s being an accredited investor. 

I see you’re a developer - do you have your own company?

Seems like you are hustling and that's great. Keep an open mindset and say yes to everything and be everywhere is a great way to build your business. 
Working with investors is a very broad scope because there is no credential for the title "investor," everyone can wear the hat so you just really have to pick the right ones to work for. For the right one, we pour our heart and soul to provide the best value to them, be available to them pretty much 24/7 and earn their trust for them to be our life long customer. My goal is to onboard 2-3 investors a year (I'm working with on and off and on average about 6 right now, all mom and pop super wonderful investors). I know I'm not the Ten-X super scaling business empire type of guy but life is good money is good and no stress. I like it this way.  
We run a family own business, I'm fortunate that both my mom and brother are CPAs so I have an in house accountant right off the bat. I'm basically the person who wears every hat for now and so far I'm leveraging technologies and vendors to run our business. We develop about 10 single family houses (from land to a well built house) a year and we own and operate on and off about 30 rental properties that's 90% LTR and 10% MTR/STR. We currently own and planning ahead about 3-4 small development projects of ourselves in the next 3 years.  
You say your real goal isn't being an agent, same here. But I don't want to be just a LP investor, at least for now or in the foreseeable future. I like to get up and do stuff. Going into the field and see houses coming off the ground and eventually move people in give me purpose and satisfaction. I can pretty much do this all day every day for the rest of my life even I don't need to make a single dime. Right now some of my good investors pay me my share everything upfront (of course with a discount) and I bust my *** for them just as hard if they have not paid me. Money is more of a measurement for self worth to me at this point but it's not a motivational factor to do what I do. 
I'll keep your contact and let's find an opportunity to connect either next time I'm in Tampa or you come visit St. Augustine. 

 It would be awesome to meet you sometime! I drive up to Tampa frequently, and though St. Augustine is far away from me I do love the area.

It sounds like you're doing well for yourself, and good for you! I hope to someday also be at the point where money is no longer a major motivational factor. Development is another aspect of RE that I'm very interested in exploring more, but have not had the chance to. I want to be part of the growth and help to relieve the nation of its housing shortage. How would you describe the developments you produce?

I have that same vision too. In St. Augustine, you can either build to sell or build to rent. Almost all builders here do build to sell (flip) where they buy lot cheap either direct to seller, from wholesalers and sometimes from the MLS. Then they come in with a pre-designed floor plan that fits the lot and they build a house and sell the house. The margin is decent to great depend on what kinda product a builder produce. It can go from as low as $30k to $100k profit based on a number of factors: how good of a deal was the land deal, quality of house, retail market at the time of completion. The good thing about flipping lot vs flipping an old house is that flipping a lot has much less surprises and there is less things can go wrong as long as the builder have done their due diligence on the lot before the purchase. Researching a vacant land is much easier than studying an old house. 

Our business model is pretty exclusively a build to hold model. Similar to the BRRRR method but instead of renovate a old house, we build a new house rent it out and refinance. Since we are our own contractor and PM, in today's market we still aim to achieve the 1% rule. 2021 to 2022 we were achieve 1.5% no problem. For our investors, we help them achieve at least 7% annual COC return (After our GC markup and PM fees, our new constructions are cash built). Obviously it's not for most of the aggressive investor here. Our investors are mostly busy career people and they have $300k cash and where can they park their $300k and still get some healthy returns and ride on top of inflation. If you are building new relationship and finding these type of investors is definitely a slow and steady effort. 

Our business model is to be very flexible and present all the options to investors. We are in the field everyday and it's very easy for me to show investors the house we are building, the house we have built, show them my data on our current rent roll so we are 100% transparent about what we do. I even showed them how much money I make from each of the operation. The money I charge them is very affordable, all of them is either fair market rate below market rate based on what they can find if they have to shop for a GC, a PM and a real estate agent. It helps a lot to build trust.  

In the last few years we were mostly our own customer with the low interest rate. But with the new high interest rate, we dial back our own operations and mostly working with new cash investors this year and going into next year. 

Quote from @Samuel Jolicoeur:

Quote from @Ke Nan Wang:

Hi Sam, kudos on doing a open house on Saturday and use your time as productive as you can be. I'm from St. Augustine so we are 3.5 hour away. 

I totally understand your parents' concern. I would be if I was in their shoes. Just like my impression on the stock market. Many people made a fortune owning the right stocks, and I just seem to have okay experience with it. My overall stock portfolio is a net positive but nothing I have to show for. During COVID period my stock portfolio had like a 40% gain and I was happily thinking, yes, I'm doing it right by diversifying something from real estate into stocks. And I continued to putting more money into my stock portfolio, thinking it's the right way to do things, even though there were no reason to support my initial success other than luck and follow the trend. But this new woke culture war hit some of the big name companies really hard and I had a huge lost on them: Meta, Disney, Target, Nike and NIO (this is not so much the woke culture but just the company did not perform as expected). I invested in them at the peak of their performance and now they are all 40%-60% less and essentially broke my portfolio into pretty much even. I think overall I came up $15k ahead out of a over six figure portfolio over 3 years which is pretty sad but I'm fortunate that I didn't lose money. My mom had a similar experience during the dot com bubble crash time and lost her lots of money so she vowed to never touched stock again because she thinks she's bad luck with stock. 

With that perspective, I can imagine someone has a similar experience with real estate investing, if they started with a bad experience, they probably think they are born with bad luck and even though everyone is winning in real estate, they will think they won't be that person. 

I have a great plumber who works for me. Two days ago we just had a conversation, both him and his dad grossed $2M last year, their take home pay was $375k each, that's pretty incredible for a plumber. But he says both him and his dad only put money into CD's and money market after reinvest into their business. His dad advise him to not to play with any investment that has risk, in their mind, they think money in the bank is "safe". 

Life taught me that it's incredibly difficult to change a person's mind through outside persuasion, but it's incredibly easy, if that person just changes their mind themselves. So for these type of people, I just tell them, hey, just watch me. See how I'm doing. If you like what I'm doing and doing better and it's something you are interested in, then maybe I can help you. And I'll just leave it like that. 

My story right now is that I'm trying to work with more investors, providing values to them and help them with their investment. I do not sell, I show them what I have done and what my data is showing, I give them all the pros and cons I know. Slowly but surely, my credibility has grown in my market. I'm a slow but steady kind of a guy. And I put a huge value over networking and relationship and trust building. So I always carry myself with the upmost integrity and always do what I say. 

It's nice to meet you and hope you have some foot traffic at your open house, and better, get an offer. 

Thanks for reaching out to me, Ke! I’d say I’m a slow and steady kind of guy myself. Someone else in my shoes might have already pulled the trigger on an investment property with the capital that I do have, but I believe it’s important to have your nest egg. Networking is so important as I’ve seen, and I’ve been working it however it’s not been a cake walk being a young Realtor in a market locally saturated with more experienced realtors. That being said I am grateful for every small step forward, and at this moment in the aftermath of the NAR lawsuit I’m open to other avenues of moving forward in Real Estate beyond being an agent. I always like to have a backup plan.

I also am looking to work with investors and would like to be included on the BP investor friendly agents list however it is I can do that. To learn from them and see how they operate and negotiate and grow their money. After all, my real goal isn’t being an agent, it’s being an accredited investor. 

I see you’re a developer - do you have your own company?

Seems like you are hustling and that's great. Keep an open mindset and say yes to everything and be everywhere is a great way to build your business. 
Working with investors is a very broad scope because there is no credential for the title "investor," everyone can wear the hat so you just really have to pick the right ones to work for. For the right one, we pour our heart and soul to provide the best value to them, be available to them pretty much 24/7 and earn their trust for them to be our life long customer. My goal is to onboard 2-3 investors a year (I'm working with on and off and on average about 6 right now, all mom and pop super wonderful investors). I know I'm not the Ten-X super scaling business empire type of guy but life is good money is good and no stress. I like it this way.  
We run a family own business, I'm fortunate that both my mom and brother are CPAs so I have an in house accountant right off the bat. I'm basically the person who wears every hat for now and so far I'm leveraging technologies and vendors to run our business. We develop about 10 single family houses (from land to a well built house) a year and we own and operate on and off about 30 rental properties that's 90% LTR and 10% MTR/STR. We currently own and planning ahead about 3-4 small development projects of ourselves in the next 3 years.  
You say your real goal isn't being an agent, same here. But I don't want to be just a LP investor, at least for now or in the foreseeable future. I like to get up and do stuff. Going into the field and see houses coming off the ground and eventually move people in give me purpose and satisfaction. I can pretty much do this all day every day for the rest of my life even I don't need to make a single dime. Right now some of my good investors pay me my share everything upfront (of course with a discount) and I bust my *** for them just as hard if they have not paid me. Money is more of a measurement for self worth to me at this point but it's not a motivational factor to do what I do. 
I'll keep your contact and let's find an opportunity to connect either next time I'm in Tampa or you come visit St. Augustine. 

Hi Sam, kudos on doing a open house on Saturday and use your time as productive as you can be. I'm from St. Augustine so we are 3.5 hour away. 

I totally understand your parents' concern. I would be if I was in their shoes. Just like my impression on the stock market. Many people made a fortune owning the right stocks, and I just seem to have okay experience with it. My overall stock portfolio is a net positive but nothing I have to show for. During COVID period my stock portfolio had like a 40% gain and I was happily thinking, yes, I'm doing it right by diversifying something from real estate into stocks. And I continued to putting more money into my stock portfolio, thinking it's the right way to do things, even though there were no reason to support my initial success other than luck and follow the trend. But this new woke culture war hit some of the big name companies really hard and I had a huge lost on them: Meta, Disney, Target, Nike and NIO (this is not so much the woke culture but just the company did not perform as expected). I invested in them at the peak of their performance and now they are all 40%-60% less and essentially broke my portfolio into pretty much even. I think overall I came up $15k ahead out of a over six figure portfolio over 3 years which is pretty sad but I'm fortunate that I didn't lose money. My mom had a similar experience during the dot com bubble crash time and lost her lots of money so she vowed to never touched stock again because she thinks she's bad luck with stock. 

With that perspective, I can imagine someone has a similar experience with real estate investing, if they started with a bad experience, they probably think they are born with bad luck and even though everyone is winning in real estate, they will think they won't be that person. 

I have a great plumber who works for me. Two days ago we just had a conversation, both him and his dad grossed $2M last year, their take home pay was $375k each, that's pretty incredible for a plumber. But he says both him and his dad only put money into CD's and money market after reinvest into their business. His dad advise him to not to play with any investment that has risk, in their mind, they think money in the bank is "safe". 

Life taught me that it's incredibly difficult to change a person's mind through outside persuasion, but it's incredibly easy, if that person just changes their mind themselves. So for these type of people, I just tell them, hey, just watch me. See how I'm doing. If you like what I'm doing and doing better and it's something you are interested in, then maybe I can help you. And I'll just leave it like that. 

My story right now is that I'm trying to work with more investors, providing values to them and help them with their investment. I do not sell, I show them what I have done and what my data is showing, I give them all the pros and cons I know. Slowly but surely, my credibility has grown in my market. I'm a slow but steady kind of a guy. And I put a huge value over networking and relationship and trust building. So I always carry myself with the upmost integrity and always do what I say. 

It's nice to meet you and hope you have some foot traffic at your open house, and better, get an offer. 

@Bruce Woodruff I agree with you in principle, but how would OP or the average people know what's done right looks like? 

@Dennis Wit If you don't know what you are looking for, I would start with your health department and ask for some big name companies who have pulled permits and done jobs recently, ask them which one they have never had problems dealing with before. Then go get a quote from these companies. Since septic installation issues tend to emerge years down the road, any local companies that have decades of positive reputation would be the ones I'm leaning towards. 

Of course that's assuming you are long term holding the property. If you are flipping the property and looking for maximum profit, I'd probably still go to the health department and start from there and usually the newer installers who would like to get a kick start for their business tend to offer more competitive pricing than the established ones. 

Our rule of thumb is start with the lowest premium anyone offer that satisfies the mortgage requirement first (if no mortgage then the lowest premium they offer), and then check out their next few upgrades and compare. If the upgrades make sense and justify the premium increase we buy it if not we settle with the lowest one. 

What Pm software have you used so far? Don’t wanna mention something you’ve already known and using. 

I have experience with Apartment.com, RentRedi, Turbotenant, Zillow. Most of the low cost free stuff. I have sat through a few PM software demo meetings and felt like the values they offer didn’t not justify the cost. 

I'm not an affiliate nor I'm Pace's students, but I think Pace Morby has some nice free programs for young and hungry real estate people. 

I'm part of his free Facebook group and also I watch his Youtube videos to brush up my real estate skills. I think at the minimum, people need to be aware of the skills he's teaching. There are a lot more opportunities out there than most people think. 

Just be very mindful about sales pitches and other bad apples in the free community where unfortunately in this world, there are scammers everywhere. Just keep in mind, when doing real estate transactions, do not ever send money to individuals, always send money to a title company you know/trust and you should be fairly safe to start. 

Everyone's situation is different. Everyone has different strategy. Without knowing exactly your situation and strategy, it's really hard to give an advise because what I may do that fits my situation and strategy can be completely not good for yours. 

Personally, I have hundreds different operations that brings in income from many properties, one property goes badly at one stage doesn't affect much of my operation as a whole so as long as I got in on a deal and believe the property's potential, I can afford to weather the storm and pull the property out of the rut. But not everyone can afford to do that or want to do that based on their situation and goals. 

I think you should evaluate based on the following:

1. Back out, what are you losing? Can you afford the lost? Do you want to lose this opportunity (not just financial return, it could also be an opportunity to learn a bunch of real life lessons)? Don't get caught in the sunk cost fallacy, throwing good money after the bad. Evaluate the situation from present forward. 

2. Continue, how much cost is it ahead of you. Can you afford the cost (think in terms of time, money, stress, etc.) What's the upside? Is the upside worth the cost? 

Not a lawyer, but I believe this is what you are looking for from researching Virginia Landlord Tenant Act:

§ 55.1-1226. Security deposits


B. Where there is more than one tenant subject to a rental agreement, unless otherwise agreed to in writing by each of the tenants, disposition of the security deposit shall be made with one check being payable to all such tenants and sent to a forwarding address provided by one of the tenants. The landlord shall make the security deposit disposition within the 45-day time period required by subsection A, but if no forwarding address is provided to the landlord, the landlord may continue to hold such security deposit in escrow. If a tenant fails to provide a forwarding address to the landlord to enable the landlord to make a refund of the security deposit, upon the expiration of one year from the date of the end of the 45-day time period, the landlord may remit such sum to the State Treasurer as unclaimed property on a form prescribed by the administrator that includes the name; social security number, if known; and last known address of each tenant on the rental agreement. If the landlord or managing agent is a real estate licensee, compliance with this subsection shall be deemed compliance with § 54.1-2108 and corresponding regulations of the Real Estate Board.

Hi Scott, 

That's a great question. Let me give it a shot and see if I can shed some light on the subject since I'm both an investor and licensed GC in Florida and have built upwards of 20 new construction houses in the last couple years. 

I also just finished a free blueprint for building a house in FL and my goal is keep adding more details to each step. And I'm keeping it free for everyone who's interested to read and maybe collaborate on and refine it. 

There are two types of cost in development:

a. Development cost: this cost fluctuate a lot based on the site. The cost starts with  

1.) plan cost (survey, civil engineer, site plan, architect, structural engineer, mechanical/electrical/plumbing (short for MEP) plans, etc.). The most important plan in this part is the site plan. Understand exactly how big is the structure, how are you orient the structural, what's the access situation, parking situation, driveway, landscape, and waste water management. In the residential world, some requirements are relaxed comparing to commercial so it's up to you whether you want to spend the money to have a better planning versus skip the planning and perform the work impromptu. For example, MEP plans are not required for permitting, but if you are designing a complicated house, having a MEP plan certainly helps to guide the trades to know exactly how and where to install the fixtures, versus something they have to figure it out impromptu in the field. Based on my experience, the better I plan it out, the less issues I faced in the field. So sometimes if I have to spend a few hundred bucks to have the architect draw out the details to help the tradesman later down the road, I will. 

2.) local municipalities fees. They are application fees, plan review fees, maybe/maybe not impact fees (tens of thousands of dollars paid to the local government so you can develop a raw land), permitting fees, rezoning fees if rezoning is required. 

3.) Public utility taps (public water and sewer taps) or on-site utilities (well water and septic system). These cost can go as high as $40k if you end up in an area that requires ATU septic system, or as low as almost nothing, if you purchased a property with existing water/sewer taps paid for by the previous owner. Now you see why builders can't just give you a price/sq ft. 

4.) Site work (Land clearing/demolition/fill dirt/lot grading/old well and/or septic abandonment/culvert). Another item that can run you upwards of $30k if you ended up buying a sink hole that needs tons of fill dirt. But at the minimum, to get the site ready to build on an even flat land, it's good to budget $10k for total sitework. 

5.) Environmental. Hope you didn't buy a wetland and need to do wetland mitigation. But it's another cost to consider for developers. 

6.) Management fee. Everything I mentioned above, you can do it yourself or hire a professional to do it for you. There is no license in development so anybody can do it. But if you decide to hire a professional to do it for you, then that's the cost you have to factor in. 

I think I've pretty covered most of the major costs on the development site for the residential space before you start construction. Almost all builders can do the development work for you, but that's a unknown cost and nobody can give you an accurate quote without studying the site. So it's unreasonable to ask for a general price because any number that someone gives you site unseen is either: so low that the builder will eat the cost, lucky and spot on, so high the builder covers the worst case scenario but the investor would over pay if there are savings because certain things I mentioned above are applicable. 

Once the development phase is completed minus the last part which is pull permit for the build, you have a building blue print in your hand, you can send the site plan and building plans out to your local builders for bids on the build. This is where you should get fairly accurate estimate. As long as you have your selections and finishes annotated on the plan. 

b. The vertical cost (construction cost) is consisted of material + labor + contingencies (surprises) + overhead + profit. Most professional builders in the area who have built project recently should have a good idea of material and labor price to build a house. Unless you are hiring a mega builder who gets insane discount on labor and material, most of your medium size or small size builders should have access to similar cost labor and material. If you hired a builder who only build one or two houses a year, aren't that proficient at it, may have high contingencies built in so the builder still makes money if things didn't go as planned, or a proficient builder who builds 10 houses a month should have very small contingencies. If you hire a big name brand builder you main have to pay more on overhead (project manager, superintendent, heavy equipment and machines) and their profit versus if you hire a small builder, the overhead could be almost nothing, and lastly, if you are a good investor/customer, you maybe able to get a better deal (a builder is willing to build the house for less profit). As a good investor, always always keep this in mind, especially when you get an insane deal, how is the service provider give me an insane below market deal and still keep a successful business running? Is this a sustainable operation? Or is it short lived?

This is the ideal world. This is assuming the builder who reviewed your plan has accounted for everything and give you a price that will cover their cost and make a profit in doing so. If the builder miscalculated or overlooked on certain items, now they are making very little/nothing/lose money, either they will honor their word and still finish the house for you at a loss, or they just stop showing up to your job. That's where bad experience/nightmare come in.

Lastly, to answer your question, to build a basically designed, square/rectangular house without crazy jigsaw puzzled cuts on roof, the following price is a good competitive construction only price for what you need to do:

Around $165 per sq ft on conditioned space (for an average 1200 to 1800 sq ft house, 8-9ft high ceiling, everything is investor grade finishes), $90-100 per sq ft for garages/unconditioned storage, $60 per sq ft for porches/opened spaces.  

Hope this helps with your questions.