All Forum Posts by: Andy Luick

What fund? More than likely he is either a real estate agent or a wholesaler trying to get property leads. Where did you place the ad? As Joe, said either ask for proof of funds..which honestly doesn't mean all that much anyway....or ask for his contact at the hedge fund to confirm he is negotiating for on their behalf. Happy Investing!

All good advice - it's time consuming for contractors to come and prepare bids...especially if it is for a larger more involved project. In our market, the better contractors are now often charging a "bid" fee for investor estimates especially where they don't even have the property under contract. As a contractor, I almost always google an address to see the status of the property before any of us go out to look at it. In your case, as a newbie, you might not have any idea of the range of costs for what the property needs...and it depends if you are just planning to rent it & cashflow it or sell it off. I often get calls on properties that I have already been to for my own investment group. When we do charge an estimating fee, we will usually apply it as a credit towards the work. Ask the contractor that you use to do the same. Good contractors are very hard to find in most markets so you don't want to rub them the wrong way by not valuing their time. Be leery of the contractor without a business location (other than home), unmarked vehicles or professional business card. Go for the contractor who checks out and provides a detailed line-by-line bid.

I'd suggest reaching out to some local contractors and let them know you are new investor and looking to establish a relationship with someone. See if someone can accompany you to view the property with your real estate agent and just ballpark what it will need. Most of us can do so as a starting point. You can then decide to put a contract in and then ask for a formal bid to be done during your due diligence period...but bear in mind, that in many markets the better offers and the ones accepted over others are those that do not ask for an inspection or due diligence period but are made "as-is."

Many investors have contracting experience as I do or have done enough of these that they can ballpark something just by walking through it. I'd have lots of questions for you - are you all cash or financed? Buying close to home is a smart strategy but try to avoid anything requiring major renovations for you first few deals. Try to find a reputable & thorough home inspector...and usually avoid the one your real estate agent is pushing....realtors like to "recommend" the light & easy inspectors - the ones who don't dig too deep so it doesn't blow your deal. You may have to pay extra to get the utilities turned on or use an inspector who can bring a generator to check the system....electrical & plumbing issues can get very expensive...especially when they pop later as unknowns...and they will.

Do you know the history of the place...is it one you've had your eye on? If not, ask some neighbors as to when it was last occupied and what's gone on there. People love to gossip and you can get some great info talking with the neighbors. Let us know how it goes! Happy Investing!

Welcome aboard! There are some great folks here to network with....learn and grow, find a mentor to align yourself with, learn on someone else's dime even if it mean being cheap labor on some rehabs. Your market is expensive! You will learn much by doing then just reading. Avoid analysis by paralysis and come up with something that utilizes your current skill set while giving you the opportunity to build and grow. When I got out of grad school, I took the lowest paying offer with a real estate developer instead of the $100k jobs my classmates were taking at the time. Everyone laughed at me and my $19k a year job but what I learned there became the basis of everything I did since and I've done very, very well. For 9 years of college & grad school, I worked almost full time doing handyman & contracting work to put myself through school. Having done that allows me to walk into most any house and know the true costs of what I face in about 10 minutes of walking around. Hit your local REIs and network like crazy;

The key is having an open mind, learning and networking.....my network is the real key to what I do combined with what I know how to do....which is contracting & renting. Real estate, done with the right team with boots on the ground, will build long term wealth...plus it's fun! Happy Investing!

Unlikely....has he stayed current on both mortgages with no lates and does he have the income to cover both mortgages plus the new one? That's where the rubber meets the road...bank really doesn't care about the subject to just that the mortgage is getting paid.

Both Brians give you good advice - be very leery of condos as HOAs can either change or enforce rental rules and limitations at the stroke of a pen...you can fight them legally but most times, once you start to fight with lawyers...you've already lost the battle. I've done a ton of condos and townhouses but never any subject to's....I prefer cash and clean but subject to's are a great way to take over & cashflow a property on someone else's credit. When I do these, I convert them to shared housing and cashflow like crazy. I did a 2/2 TH I bought for $15k spent $15k fixing it up, cut the living room in half to create a 3rd bedroom and sold it for $55k - my cash partner made 48% in about 5 months on the deal....pretty sweet. If you can do a similar thing, you can cashflow it and flip to a cash buyer. Just be sure to get a quitclaim deed signed by your seller and park it with your attorney to be held by him or her until the time you cash out the unit. Otherwise, you could be chasing down the seller who now has no interest in dealing with you. In deals like these, protect yourself and expect the worst in people even if it never materializes! Happy Investing!

I agree with Andy - plus he's got a great name. Successful investing is every bit about who you know and maintaining good relationships. There are buyers agents worth their weight in gold who know exactly how to time the offers on HUD properties. I don't know that system nor do I care to so I buy from someone who does....and I am happy to pay them for it. If it takes cutting an agent's fee or a wholesaler's mark-up to make the deal work...then it's probably not a very good deal in the first place. I think HUD commissions are 2% if I remember correctly...someone else can chime in on it. I'd research and network to find the right HUD buying agent to use.

Agents can't agree to kick you anything back...only a Broker can do so and the agent works for and under the license of the Broker. There are some discount brokerages that offer to discount you back part of the commission but mostly in GA I have only seen that on the listing side not the buy side. Certainly research it and let us know what you come up with.

For what it is worth, I've been investing for over 25 years and have never quibbled once over paying an agent the commission...as Andy says, some deals are easy...and some downright next to impossible...the easy one prepays a bit for the hard one. Happy Investing!

And there's a golden nugget - when possible, deal with the local or smaller banks when it comes to REOs. For a while now in Atlanta, the bulk of the REOs are already "spoken" for by the hedge funds and venture capital backed groups that have been so active in atlanta. That part of the market is slowly down no considerably (IMO) as their model doesn't work. I try not to buy REOs that are listed but when I do, I try to steer clear of the big listing groups in atlanta. I prefer off-market and through wholesalers where I can actually make a deal and KNOW I've made the deal.

That's an awful lot of money to put up for earnest money. If you're smart, you send them a photocopy of a check and then provide the cashiers check or wire directly to the closing attorney once all docs are signed and originals returned to you. Don't you have an agent working on this for you? Let us know how it turns out!

First, take a look at your lease...did the lease require her to give you a 60 day notice? I'll guess that it did otherwise most tenants would give 30 days. If she was required to give you a 60-day notice than there is no need to return anything back to her. Is she asking for it? I don't know CA landlord tenant laws but this seems to be a decent primer for CA Landlords and Tenants: http://publichealth.lacounty.gov/eh/docs/housing/brochure/tenright.pdf

Hope it helps! It hasn't been updated in 4 years but there probably hasn't been much in the way of changes.

It's a great point and a good one to remember as we mix with various investor groups & REIs. I've come across so many people who have read every book and spent more on seminars collectively than it would have taken to actually BUY a house! Victory goes to those who do....not to those who merely contemplate it.

I mostly by off-market deals and have done enough of them that most come to me without an agent involved...usually wholesalers. I do have a couple of agents I use on the buy side when I find a deal on fmls/mls and have networked with several listing agents who call me when they get a new listing coming in that fits my profile. If you're buy agent has served you well, I'd stay with her and try to network with active listing agents handling the type of properties you pursue. Most agents in Atlanta just want to put you an autofeed system but the good ones will actually take the time to review the properties before I do. Finding a good wholesaler in your market will likely pay better dividends. Happy Investing!

If you are intent on staying with the 203 loan, which you absolutely should, make sure you get it cleared in advance to be able to use your Dad. Most lenders in this program won't allow it for a whole variety of reasons....they also don't allow self-help....and you will need a licensed GC who is a validated HUD contractor in order to use the loan program. Contractor bids will be higher for this program as it is a PITA for the contractors...actually a nightmare depending on the lender. My contracting company did tons of these in metro Atlanta and finally moved away from it unless the client was a friend. The holdbacks and paperwork make it hard for most contractors to make money with this loan....so the smart ones will price it higher from the get-go. If any of the repairs are structural, you'll need a licensed GC - rotted siding, roof, etc. If the repairs are all cosmetic in nature...paint, carpet, tile, appliance and the sort - you can go streamlined.

Most of us here are investors and many of us will find the lowest cost provider...which isn't really wise but it works for most flippers. I see the long term result of it all the time. Most of the work we do on our investment houses is done with a 3-year warranty on most of it and 1-year on some. We do it this way to protect the end buyer to some extent. Our quality of work is higher so we charge more for it. What you'll find in repairs, if you check references for quality, you'll get what you pay for in most markets. Keep chipping away at it!