All Forum Posts by: Andy Luick

BP is a awesome place to network. Most will not respond to your marketplace post for funding but will track you down in PM or offline. At least that has been the case with us. A ton of BP'ers are really just tire kickers...they will talk a deal with you then disappear....but it's all in the numbers so be aware of that. I think it's also best to state an actual deal.....it will likely be done or gone by the time BP'ers respond to it but it starts a dialog towards a future deal. It really is all about networking. It's is also a lot like dating....if you don't get a good feeling or vibe from the potential investor pass on the deal and only do business with people you are comfortable with. We got at least a 100 hits from the the last deal we posted and several angry investors that I just didn't want to do a deal with. We also got several that we are working to do deals with now....so keep at it! Also, don't expect those you have done business with to support you opening here....they won't for a variety of reasons. They don't want to share a good thing or they don't want to get inundated with funding requests. If you have a good model, there is a ton of money here on BP and elsewhere to get it done with! Happy Investing.

Good shares and a ton of passion behind it. BP is all about sharing and different perspectives. What works in one market will not work in another. Passion is great but at one time people were very passionate about the world being flat and ships sailing off the ends. There is money to be made and lost in every single US real estate market. There is absolutely no substitute for boots on the ground in that market AND sufficient hands-on skills or a team in place to accomplish the mission.

Sounds like Aaron has something that works for him in his market. I don't know CA well and don't care to learn.....yes, you can leverage deals and use owner financing to get some nice returns...if the appreciation continues AND you are able to sell it off. For most of us who has been around and invested for decades....we don't count on appreciation EVER and a larger percentage of investors who do will be slaughtered just as Aaron once butchered his pig out back of the shed. This last market run-up caught almost every single one of us who post here whether we wish to admit it or not. Those that got completely slaughter were also completely leveraged. Again, Aaron sounds like he has something that works for him...and that's awesome...I hope it never becomes the pig butchering the butcher....but it might. The best thing that Aaron shared was the 5 D's - right on the money for any investor in any market.

There are so many different ways to profit in real estate and 100 times more ways to lose your shirt. Turnkey can produce incredible returns....just know the risks and find a model where the provider has to perform in order to also make a decent return. Turnkey gets a bad name but you can now vet out a ton of the losers right here on BP and other sites. Avoid the pure marketer and find the guys who are boots on the ground in the local market.

Why would I ever buy a $140k property that rents for $1,100? I never would but it's not a bad deal...just not good enough for me to get interested. Everything has it's risk. CA might go bankrupt...then what? Who knows. Maybe a crystal meth lab takes over the property next door and your place gets contaminated as well. Remember the folks that flocked to Vegas early 2000's and made a killing on paper with new construction? Where are those people now? Bankrupt! Why? Because the market shifted and the house they paid $500k for was now worth $250k because that's what the builder was now building and selling.

If the market turns, maybe you then turn the under-performing 3/2 into shared housing and get $2,200 on the house instead. I do this every day and turn losers into winners. I get laughed at all the time....and could care a less. We talk about tenant selection but, in todays world, 90% of the folks you are renting to are LOSERS by very definition. They can't buy a house because their credit is trashed so they are stuck renting. Or they already own a home that owns them in another market and had to transfer to get employment elsewhere. Doesn't mean there aren't some terrific renters out here....there are but I see the absolute horror stories in my local market every week. My model gets me around that....like Aaron's..it works for me and I am pretty passionate about it. It's also a ton of work. This is my personal approach to REI and it works for me because I have the pieces in place to get it done with. It's not always in just the numbers....the vast majority of REI wanna-be's will never get beyond reading and posting here.

The best advise any of us could give the original poster hasn't been posted here unless it's been given privately. @Denny Moody - put your money and all your efforts into your start-up and use BP as a minor distraction. Whatever money you think you will need for the start-up - double or triple that number and you'll be closer to reality! Believe in what you are attempting to do and commit to it 100%. You won't have time for investing. REI will always be here for you once your business is doing well or you've sold it off for millions....cause guess what - do well with the business and you'll make more money there than you ever could in real estate.

Again, thanks for the great shares! Happy Investing.

@Tyler Flagg - I'd get some recs here from investors in your markets like Sara and get some quotes from contractors. You're PM can schedule viewings for contractors. Unless the house is fairly new, you'll likely run into a ton of add-ons going your route. The subs used by the big boxes don't get paid all that much...the bulk of profits goes to the big box and they can't attract the best subs...the better contractors make more money running independently. So when a issue pops up, like extra plumbing work or rotted subflooring - you get creamed! I've been a contractor for most of my life and an investor for about as long! If you go the route you are thinking, it's going to cost you a ton for a false sense of peace of mind. I would definitely get a quote from whomever the PM recommends as well.

@Lenin Belangonda - in 99% of the cases, if there aren't any electrical or major structural issues....and you didn't go outside of the original building envelope, no one is going to care that someone divided a room. Unpermitted improvements come up all of the time. You had a full inspection which didn't reveal anything glaring. Is the electrical service there currently on? If so, you are all good. If not, some areas will require an electrical inspection before the power can be turned back on....usually it's if the power has been off for more than a year but that isn't always the case. It's hard to find good properties in CA so congrats if that's where this one is....we get a ton of CA investors coming to our model for the returns. All the heavy lifting is done for them...here you have had to to a ton of leg work....hope it works out well for you!

$5/ft for install in a Miami highrise is cheap. I don't know why you'd need a permit for the work but it can likely only be done during certain hours and it's a headache for contractors to work in highrises. There is also the "unknown" in how hard it will be to remove the old floor depending on how it was installed. Ceramic will likely cost double for labor but just guessing. Find a discounted supplier like Floor & Decor we have in Atlanta or check Craigslist for a salvage company that might have a deal on flooring.

@Walt Payne - how do you know that they now have inadequate electric? If he had an inspection done...which it appears from his comments that he did...we're assuming that nothing negative came back on the electric as he didn't mention it from what I read. I didn't see anything in there about electrical splitters or extension cords??

For the most part, if any of this gets to a lawsuit...you've already lost...in time and money. Who is going to sue anyone over a disclosure about an unpermitted room split...no one. It's good to consider it but probably not a real issue.

@Lenin Belangonda - did the inspection come back clean on the electrical? When the assessors do an "in-home" inspection at some point, they may wish to raise the assessment on the house based on the rooms as opposed to the square footage. Most municipalities will assess you based on the new sales price when the deed gets recorded. I've done 1,000s of transactions over the years and I simply wouldn't be concerned with it. The beauty of BP is that you can get a lot of perspectives to guide you in whatever you are trying to accomplish!

@Ken Radino - another potential option would be to rent your current place if you have family to stay with short term....just get yourself qualified for the 203 first...as long as the lease is for 12 months and covers the mortgage, you should be good to go. At least another option to think about!

@Andrea M. - We often forget that with our real property our "rights" and ownership, unless in conflict with statutes or they've somehow been sold off, extend from the ground to heaven and the ground to the center of the earth. Tree limbs crossing over your property line are fair game for you to remove them to the point that they cross your property line. Most would just cut them back several feet from the roofline. It's a great opportunity for you to connect with the owner, network and maybe even line up a future purchase. You never know when someone is going to get divorced or just be sick of being a landlord and it pays to be known!

The "dead" tree is an entirely different issue and it comes up all the time. If the tree is dead...put the owner on notice immediately, take a picture and send a letter certified mail. Once he is on notice, IF it falls....he is responsible for the damage. Without notice or if a otherwise healthy tree falls, the person with the damage is on the hook for it and insurance will then hopefully come into play. If neighboring properties have dead trees it pays to put them on notice before there is a loss. happy investing!

Most of us on BP are very well intentioned - here, there was no work performed outside of the box, meaning no addition and whatever work was done, dividing the room into 2, was done without a permit. This is pretty typical all over the US and isn't much of an issue at all. While couched in "heath, safety & welfare" issues, permitting is really about revenue for the local government. It's very unlikely that this is ever going to cause you any problems unless the room was part of an illegal addition.

If the numbers work, buy the house and good luck with it. I wouldn't contact the municipality at all...silence is golden sometimes. The case that @David Krulac mentions happens quite a bit and it's usually a political type deal or someone who just wants to thumb their nose at the laws....do that with new construction and you're looking a fines, no occupancy permits and worst case, having to pay to demolish the whole thing and start over again. I saw this happen 20 years ago in a small town...they made the owner of the unpermitted building start all over again by completely demolishing the entire structure. With most things, you'll get more with honey than you do vinegar!

If you are not already a homeowner - you might consider using the 203k loan to acquire a home needing repairs - you can also use the loan to purchase a townhouse or a duplex, tri-plex or a quad and use the funds to make repairs. With a low downpayment, it's about the cheapest source of funds you'll find and you can use it as an investment property provided you live in it for a period of time.

You could purchase a home this way and rent out 2 or 3 of the rooms for extra income using our MRR model....the leases and rents would cover the mortgage and you'd be able to purchase another one using the same loan after 24 months. It's a very smart way to gradually build a portfolio....Happy Investing