All Forum Posts by: Patricio P.

Originally posted by @Derek Jones:

Do you care at all what type of neighborhood the home is in? In and around Sac you'd be looking at C/D neighborhoods for around 180k. 

 What are A/B neighborhood 4-plexs generally going for in the Sacramento area? Do they cashflow? What sort of Cap rate?

I was looking on loopnet at multi family homes just to get an idea of options in a particular area. What I found was quite a wide range of quality and cap rates. There was everything from 2% up to 9% which seemed like too wide of a range. What are your recommendations of figuring out generally what the going cap rate is in an area?

Originally posted by @John D.:

Hi @Quinten Jones. I do most of my real estate in the Grass Valley area -- picked up 7 rentals, a few rehab flips, some vacant land flips, over the past 18 months or so. I'd be happy to meet up and chat some time. If you have any non-MLS deals, I'm always looking!

I also have a contact in the area who has started an small informal REI group that I can intro you to, she's got an interesting mix of people and a bizarre and really wide range of opportunities.

re's
John

 John, you were the person I was thinking of. Great job on that flip by the way!

@Mohamed Hersi I assume you are asking because of the Islamic prohibition against Riba (interest/usury). There are a number for Islamic finance companies that specialize in home co-investing. They range quite a bit from being very similar to a mortgage all the way to a JV where the owner occupant pays market rents on the portion they do not own. There are many companies you can look into such as Guidance Residential, Ameen Housing, Lariba, University Islamic Financial, etc. I'm not sure if any of these provide investment loans, but its worth looking into it.

Other ways you can invest without borrowing money are to do joint ventures where you provide the work and sweat equity while someone else provides the funds and the profits are split at a predetermined rate. Wholesaling requires some money but you can get properties under contract and assign them to someone else in exchange for an assignment fee. 

Without being able to take on an interest based loan you will have to get a little creative but there are a lot of options for you and ways to make money in Real Estate. 

There's another guy from BP in your area (Grass Valley) that does flips. I can't recall his name but he posted not too long ago in the Success Stories showing off a very nice flip he did in your area. I recommend you find a local flipper, take them out to lunch/coffee and pick their brain. Offer your services in exchange for mentoring. Maybe partner on a deal with them down the road.

The concept behind estimating ARV is by using comps that are similar and have sold recently and then making the necessary adjustments. None of us can predict the future so estimating ARV based on a prediction is purely speculation. Instead, you should calculate ARV the traditional way and see what it would be worth now. If the numbers make sense now then go for it, otherwise its best to pass. You really can't depend on appreciation to bail you out of a bad deal. At the same time, even a great deal now if held for two years can turn south if the market tanks. Make sure you have multiple exit strategies in case things don't go as planned.

Originally posted by @Larry Turowski:

@Patricio P. You don't want to pay someone for every house you look at.  You should have an idea that it might be a deal.  So you go through first.  If you are not worried about the property being scooped up, bring your contractor through first.  Otherwise, make your offer and bring your contractor through while the inspection is happening.

Thanks for your response Larry. If you are someone who lacks experience in estimating rehab costs yet you can reasonably predict ARV and calculate the discount you want to buy at, is there a method for doing a rough estimate of rehab costs such as using avg. rehab cost per square foot for your farm? How common is it to get a property under contract and then drastically change the purchase price based on a more thorough analysis of the rehab costs during the due diligence period?

@Tim Soto Great job on the flip!

I'm curious how the actual numbers stacked up against the projections. As a REI friendly agent, have you dabbled yourself in REI? What are you future plans?

I'm sorry to hear about your loss Dave. Please keep us posted on the event. I think it's great that your company is tying your success to giving back to the community you live in. 

Dishwasher is what my intuition tells me but to make an informed decision you have to look at the comps and the competition.