All Forum Posts by: Lorin K.

National personal debt vs national savings are good ways to gauge if the Us is about to falter. At the height of the crisis, CNN said the national savings rate was -1% unlike 10% of your yearly intake is in savings to cushion the blow of a layoff and help to keep the family, and the economy afloat. This chart shows the national savings rate at 5% but I am not so certain on the chart. https://research.stlouisfed.org/fred2/series/PSAVERT. At the hight of the crash, everyone was in debt including realestate investors...who to me, were more speculators then anything else. The year 1921 to 1929 and 2001 to 2008 mirror each other in so many ways. Both markets were deregulated and fraud, waste, abuse and speculation took over causing two large crashes. The only difference this time, The president and congress infused billions of dollars into the banking industry to prop them up and not allow them to fail. The great depression had no emergency funding to prevent a crash and the country slid into the great depression. I would look outside of California if possible for better profits.

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The investing by over seas Chinese is unrelenting and has been happening for a long time. Here is the latest example of a neighborhood of local residence protesting in front of a 6 thousand square feet hour house that just had $350,000 in renovations three years ago and will be town down for a larger home to be built. What often happen is the homes are purchased by Chinese investors and are either left empty, or a son is living in it going to collage. A shack of a home in Vancouver west home can go for 2.4 million dollars.

http://www.huffingtonpost.ca/2016/01/29/point-grey...

http://www.vancouversun.com/news/protesters+rally+...

While I do believe that investing is a good thing, Chinese who buy homes and leave them empty can destroy a business section in the area. This unrelenting buying by Chinese property buyers is also causing school enrollment to plummet as more homes are purchased only for adult students that live in these homes. Taxes are also lost do to non occupancy or non paying resident immigrants who live here on a temporary visa.

What I am trying to figure out is where are these rich Chinese investor obtaining there funding from? The province or federal government has speculated it is from Money Laundering and then the investors dump the money in the market and let the properties sit for long periods of time.

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I was in the air-force and had to have professional fire extinguisher training for our aircraft. You can supply a fire extinguisher to a tenant but if he does not use it properly, it will do no good. Also, I wonder why modern day homes do not have a separate mini panel for emergency lights that come on when flipping off the circuit breaker? Why cant smoke detectors computer trip off the circuit breaker to electrical systems inside the house? Any case, never heard of a dryer catching fire this is a first. You were lucky the fire damage was minimal at best.

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http://www.vancouversun.com/business/affordability/vancouver+housing+market+more+unaffordable+than/11674829/story.html

This has been going on for a long time. The cost of properties have perhaps started before 2000. Rich Chinese investors/immigrants brought into the investor immigrant program so they could buy there way into the country. Between 2006 to 2010 44,000 Chinese millionaires "98% of which are of Chinese nationality" made there way into the Vancouver region. They typically buy the 1.5 million dollar on average home prices for cash. There children then attend university and live in the houses while the parents stay locally, or live in China.

I have my theories as to how the Chinese are getting wealthy but who is the winner and looser in the huge property increases? why the investor or property owner is. The looser is locals who have now grown children and are ready to buy homes...but is impossible to do so due to the staggering cost of properties.

Have any of you investors ever seen this phenomena in your city?

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I am actually a US citizen who lives in Canada. Being said that, I would be looking for private money 100% ARV. I was told it is all about relationships with the investor so he can trust me with the project so I can obtain the funds that way.

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I want to make sure that I have a list of private money lenders ready that would be willing to loan on a property once I find that one qualifies. The property alone would qualify as my credit is not that good right now. Good or great deals get passed up, sold to the next buyer if a investor does not have his financing ready to go. I am focusing on properties in the NW corner of the state as it is within a 45 min drive from my location.

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Originally posted by @Joel Owens:

I don't buy overpriced trash.

Wait until they lose their shirt and then swoop in and buy them for a song. Some even when buying incorrectly will be able to handle the next down cycle and wait it out.

It's the buyers who overpaid and can't hang on where you scoop up deals. We call them "vulture buyers" in the business.

you mean like in Vancouver BC Canada? BTW these prices are old and have gone up higher then what is in this site. www.crackshackormansion.com

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Originally posted by @Curtis Bidwell:

I found a 10 Unit apartment (6 2-bed, 4 1-bed) that had been sitting on Zillow for more than 6 months! I added it to my portfolio December 1st. I knew the area and market, drove by and did some basic numbers. The following week my broker called to tell me about it. I showed her my discovery info and we put in an offer. Though I ended up competing with an all cash offer, I won with 100% financing!

I’ll offer some detail in hopes of giving perspective for young investors, as well as for those wanting to move into smaller apartments. Feel free to ask questions and I’ll respond as I’m able.

Asking price: $399k.
Purchase Price: $389k (concessions came off the price rather than as a closing credit that would have reduced my closing costs but saved the seller almost $1,000 in commission, excise tax and capital gains).
Appraised Value $450k (appraiser verbally said $500k but limited his exposure on paper!)

RENTS:

Scheduled Rent at time of closing: $5655.
Actual First Month: $6460 (listing agent didn’t include utility charge in proforma! We discovered the discrepancy while going through Income/Expense reports).
Market Value Target $8370 (anticipate 12-18 mo to fully transition due to upgrades required).
Rent after 1st round of increases (effective 3/16) $7335. Some tenants had not received an increase in 8 years (paying $525 for a $900 unit!) I had one unit empty at possession that the property management had listed at $625. We had it occupied in 4 days at $895!

Combined EXPENSES have run just under $2k month (taxes, Ins, maint, cap ex, management, utilities, etc). I will cut expenses on insurance ($100/mo less than previous owner), better mortgage terms, care for running water issues, and create other efficiencies (saving $300/mo). I will increase Cap Ex and Maintenance budgets for a net increase of about $500/mo.

FINANCING:
Due to the strength of the deal I was offered 80% commercial financing at 4.25% 10 year note, 5 year adjustment, 25 year amortization. (Payment $1697).

I had previously built a relationship with the Chief Credit Officer of the bank who gave me a signature LOC at 5.25%. I used a portion of this as my down payment (monthly pmt of $350).

UPGRADES NEEDED:

The property was negligently maintained by both the owner and “professional” management company. Rents were $200-300/unit under market. Maintenance requests were routinely ignored.
Water was flowing in the laundry room, toilets and faucets leaked continually.
2 Ranges had elements missing because they ‘sparked’.
Phone cable between pole and building was hanging …at neck level!
Zinsco electric panels had never been updated.
Siding needs some minor repairs and full exterior paint job.
Original 1942 Single pain metal windows need replacing throughout!
Laundry room has no ceiling, insulation falling down.

SOLUTIONS:

Working with weatherization programs from utilities and local agencies to change out windows and insulation at minimal cost.
Commercially certified electrician has been installed a new panel and 2 GFI outlets for $300/unit on weekends.
New Pex piping for water supply bid at $600/unit.
Increase rents incrementally to existing tenants, and full market at turnover. 1 bed = $750; 2 bed $895.
Sheet rocked laundry room ceiling.
Repair siding and repaint in Spring. (Roof is solid)
New paint, flooring, counter tops in each unit at turnover (aprox $2500/unit).

This was a cash flowing property from the beginning at about $1400/mo. With proper oversight it will increase to over $3600/mo. The value should increase from the $389k purchase price to over $600k given the same cap rate (11.5%). With interior and exterior improvements the cap rate should come down to about 9% giving it a value over $750k! (Anticipated time frame, 18 months).

That price is stunning. I am a long term western washington resident who immigrated into Vancouver BC. Homes in Vancouver such a 1,600 square foot house in Vancouver for are well over 1 million dollars. I am looking for a group to join "non BP" who are in Bellingham. Looking for a mentor to start into evaluating/qualifing properties in the region and eventually move back to the state after my first or second deal.

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Originally posted by @Ryan M.:

I have to share this:

At a garage sale in Florida this year I found a Carleton Sheets program (CDs, Videos, Books) all in the orginal packaging with the plastic still wrapped around it. The person had a price of $6 on it, talked them to $2. Then went through the stuff and sold it on ebay for $18.

And I bet he orginally sold it to the public for $1,000 for the program. I had one of his agents call me and was all pissed off I was not interested. I had been taken once by the DaveDelDott program long ago and said no more! You can make a killing selling seminar programs then having to go though the pain of finding one investment property per month!

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Originally posted by @Nat C.:

Originally posted by @Bryan Schultz:

Sorry about your damages. I would never of put my self in that situation. You never know who you are bringing into your home. They seem like bad people and you're lucky that you were not seriously injured, kidnapped, or even killed. I'm sure you learned a valuable lesson!

They seemed like incredibly lovely people. Even my friend thought so.

That is just a front to fool you. I could care less how nice a person is, I do not trust them. Thirty years ago, I sold two cars. One was to a old couple the other was to a private buyer. The buyer I sold to had signed the bill of sale for the vehicle and he provided me cash. BTW, never take cash on any deal. Get citified check. Anyway, this guy never registered the car and it was abandoned on the highway. He never registered it though the state and the state was going to suspend my license. Same thing with another car sold to older couple. They never registered it and never got insurance. Thankfully I had signed bill of sales and sent those to the state so they would not suspend my license.

Cannot trust people anymore. Ive been scammed to many times and wont put up with it anymore.

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All Forum Posts by: Lorin K.

Lorin K. has started 32 posts and replied 132 times.

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