All Forum Posts by: Rick Albert

There isn't enough information. What are the rents? What are the incomes for #1 and #2? What's wrong with applicant #3? I like the idea of no pets and that is decent income (depending on what the rents are). Is the occupant looking for work? They are basically the same as applicant number one except there is an opportunity for them to make more money with the second person if they chose to work which means higher probability you will get paid on time. What does their savings look like? The credit score for all of them are decent. 

 I work with @Danny Gonzalez and been pretty happy. They get multiple quotes for work, provide honest feedback, and pricing is within line.

There are a couple of things to consider:

1. It's been sitting on the market and they want to offer only $70K less? That's not horrible.

2. Reputation is everything. If all you do is submit lowball offers, it could be your reputation as well as the investors. I knew a buyer who thought he was the world's greatest negotiator. I sent him a pocket listing of mine but purposefully told him $100K more than what the Seller really wanted. The result? His wife was so mad they lost the last house they offered full price on my pocket listing.

3. If you are lowballing, focus on homes that have been sitting on the market. Anything new to the market it would likely be a waste of time.

4. Presentation is everything. The other day an investor told me, "I need to buy this for the lowest price possible." My response, "Well my Seller wants the highest price possible, so we need to meet somewhere in the middle." I would be transparent and explain the numbers. That way you are justifying your lower offer. I have a property under contract with a house hacker for $50K under list and I just showed why. Got accepted pretty quick.

Good luck

You are basically building a new home on a piece of land. A couple of things to consider:

1. You are subject to new building codes. I don't know what market you are looking in, but in California that would mean solar panels, rain barrels, fire sprinklers, etc. It ends up being very expensive.

2. I would rather buy a property already built all day long and get it rented out immediately. If it takes 6 months to a year to build, that's tons of loss opportunity costs and carrying costs spent. 

3. Where is the land located? Again, not sure on your market but if the empty lot is so far out of town, then who would be your tenant pool?

4. What's your construction experience? This is a full time job to manage a project like this. That's why developers have project managers on top of the contractors. 

I'm not saying don't do it, I'm saying think it through, especially if you are new to this.

When we get stuck in analysis paralysis there are a few things that come to mind:

1. Is what you are looking for realistic? Are your parameters keeping you in analysis mode because nothing works? It might require a realignment of expectations. I've been submitting offers and not getting counters. So I asked my Realtor if my expectations are unrealistic. 

2. I know you want to get your hands dirty, but don't rush into anything. Not sure how long you have been looking but things take time.

3. What does your spreadsheet look like? Overtime, I've developed a spreadsheet that works for me. It allows me to analysis properties pretty fast.

4. Does it make sense to get a business partner? They analyze, you manage. You can provide some analysis. 

I always recommend starting out yourself. The challenge is if you don't have the personal experience, it can be easy for any property manager to take advantage of you. I've called out PMs in the past and that's only because I knew what they were doing wrong because of personal experience. 

There are wholesalers in Los Angeles. I've heard of some investors buying from them, but it is far and few between. Mainly because the numbers (at least for the ones that come across my desk) almost never work. Priced too high, rehab estimates too low, and they don't factor in the cost of selling (commissions and closing costs). 

If you want to get into real estate investing, I would recommend becoming a project manager for a developer. Not only will you learn different neighborhoods, how to manage people, and costs of construction, but they can get paid extremely well if you get good and know how to work with the City. Developers pay big money for great project managers.

Good luck!

 Typically lenders who would be willing to do 100% financing want actual ownership experience. With that said, if you have a lot of money in the bank some might go for it. Otherwise the ones I meet want you to have some skin in the game unless the price is ridiculously good.

Without seeing it, there is no way to really determine the costs. 

Here's what I do to get ballparks:

1. Have a vendor list to keep tabs on costs. For example I reach out to my HVAC guy to get updates on pricing for mini splits, etc. Another great example is flooring. Typically flooring guys charge a flat install per square foot and then more for stairs. Add on the cost of flooring and you are good to go. 

2. Find out what the daily labor rate is. For example, in Los Angeles, it is between $200-$250 per person per day.

3. Go online to Home Depot, Lowes, etc. just to keep tabs as to what's going on. 

This way, I can go through and calculate basic ballpark. For example, you want to add a wall to create a bedroom. I figure it might take two guys and two days. That's $1,000 plus materials. So maybe $2,500. 

 I don't think anyone here would suggest you quit healthcare to pursue this full time. What's great about investing is that it can be a side hustle since you outsource a lot of the help. I have clients in tech, pharma, entertainment, and more that do real estate on the side. It is a mechanism towards retirement.