All Forum Posts by: Seo Hui Han

A HELOC and a Home Equity Loan are the same thing.

I have an excellent residential mortgage broker who can help you with this, he's based in Orange County. I wouldn't recommend him for anything investment-related or commercial, but if it's just a HELOC on your primary, he'll do an excellent job.

Just don't go to Lending Tree or any of that nonsense.  I made that mistake once, the calls wouldn't stop for months.

What city/market is this car wash in?  I'm pretty familiar with car washes in the So Cal area, 5.5 (including land) is a bit on the high side here.  1.8 on the other hand (including land) is unbelievably low.  Even if you had to replace all the tunnel equipment, even with the very expensive express wash stuff, it couldn't have topped 1 million.  Why did the seller let it go for such a low price?  Was the original 5.5 mil appraisal way off?  

You may want to consider local banks / credit unions just because many of them will require or give you more favorable terms for things like HELOC's and other line of credit products if you have a deposit account with them.

Quote from @Jon Sidoti:

We've worked with a few brokerages and we got great deals on a few assets.

Shreveport LA - 2021 acquired Industrial Latter & Blum Nacitotches

Leland NC - 2022 acquired 20 units multifamily

Savannah GA - 2022, acquired Industrial w/Colliers International Savannah

High Point NC - 2023, acquired Industrial w/JLL

Savannah GA - 2022, acquired Industrial w/Avison Young Atlanta

 How would you rate your experience with Colliers?  Never worked with their brokerage arm before.   Just for an appraisal.  

Quote from @Wade Wright:

Hi,

I am building a fourplex in Central TN and since I live in another state, I want to hire a project manager.  The job is about 1 year, 3 months from start to finish.  How much should I pay this person to manage the project and hire subs?

Thank you,

Wade

 Are you sure you want project management?  You mention hiring subs, sounds like you mean a general contractor. 

Project management's job in construction is to basically keep the contractor in line.  For example, I have used TetraTech before.   They will evaluate the contract with the builder and the budget, make sure it falls within market median costs, and set milestones for draw requests.  They will inspect the project at those milestones and evaluate all the line items in draw requests before authorizing dispersal of funds.  They will not release the final retention of 10% until the project is complete.  It is a really good safeguard against contractor malfeasance.   For my project budget of 1.5 million, they charged about 10k.  Worth every penny.

Quote from @Steven Silbert:

At the end of this year, I'll be moving back to San Luis Obispo County, CA, and I have been a bit depressed looking at the housing prices. It got me thinking about new construction for single family with an ADU or multi-family, and house hack to offset the mortgage. I've seen that the average building cost for the state is around 495K, which is significantly less than the average home in SLO at over a million. I was wondering if anyone had experience in new construction and how their costs turned out to be. Especially with small multi-family, but SFH info would be great too. I can find plots of land around SLO for less than 200, in paces like Atascadero and Los Osos, so I'm very curious to see if this will actually work!

 Well besides the hard costs (construction, materials) and soft costs (permitting, architecture, fees, engineering) people often forget holding costs.  Remember that once you purchase the property you are paying debt service, property taxes, etc. before you are even shovel ready, and during.  

Quote from @Michael Smythe:

@Seo Hui Han onsite staff is there to mostly show the property and keep tabs on tenants and the grounds. Sometimes maintenance.

The PMC collects rents, although some may drop off at office, tracks EVERYTHING the onsite staff does and arranges maintenance of grounds and units. They will also handle nonpayment & evictions, marketing of units, applicant screening and much more. 

Almost forgot, the PMC also manages the onsite staff.

Thanks, that really clears things up.

I am under the impression that the owner is typically responsible for paying on-site staff.  Is that a hard and fast rule, or do some PMC's take care of that for the owner, billing the owner on top of their 4-6%?  And if the PMC manages the on-site staff, does that include hiring and firing as well?

Quote from @Drew Sygit:

@Seo Hui Han you're not going to get very far in this business if you don't start thinking through the nuts & bolts of how this all works! 

@Kim Meredith Hampton makes excellent points, but she shouldn't have to.

YOU should already be thinking these things through, so you invest wisely and don't get taken advantage of.

BTW - yes, BP is where you can post questions for answers, but ask BETTER questions!

Example: "what does a PMC do for their 4-6% that the onsite staff doesn't cover?"

 What does a PMC do for their 4-6% that the on-site staff doesn't cover?

And to people who run PMC's, I'm sorry if my original post sounded like I was complaining about having to pay for both, or being snide about the cost.  That really wasn't my intention.  I genuinely want to know if there are certain tasks and responsibilities that are delineated for the PMC, and others delineated for the on-site manager, and what those were?  

For example, who collects rent?  Who turns units?  Who screens new tenants?  Who handles maintenance requests?  I just want to know if there is an industry standard or convention in this situation for how these things are divided up between the PMC and on-site management.

I've been going through "The Multifamily Millionaire:  Volume 2" and in Chapter 13, they talk about property management ranging from 4-6%, on top of on site management that is on the owner's payroll, separate from property management, and that you should budget about 1 staff member for every 40 units.

If you (the owner) are already paying a property management firm, why do you have to have on-site management separate from the PM?  What does the PM do, and what does your on site management do?  Unfortunately, this was not clear in the book, which is unfortunate, since otherwise it is a very good and detailed read.

If the ADU you're proposing is the make-or-break between this deal penciling out or not, AND if it is pivotal for your plans that it be the height that you are planning, I would personally advise you to abandon this deal. Rick Garrido's advise is theoretically sound, but it could take months, possibly a year, for Edison's planning department to approve this. And you wouldn't be able to get it in writing until AFTER you purchased the property. You might be able to get some random Edison technician to say, "Well, I guess it would be okay," after eyeballing it, but that's no guarantee that after you buy the property, Edison or Long Beach or someone comes along and says you can't. Phi Tran is also giving you good advise about getting site visits (aka inspections) but no one will even let you apply for permits, much less grant them, until AFTER you purchase. So kinda a dice roll here.

And since you are planning to rent this out, and you need certificate of occupancy for that, you can't just go and build without a permit.  

Oh, and it wasn't clear in your post whether the area of the property you're looking at is LADWP or Edison, though to be honest it doesn't make too much of a difference.  Both are notoriously bad and slow.  

Also, you may want to check city records / land maps with the country recorder's office.  Often, the land UNDERNEATH power lines have easements on them, that go five or ten feet in both directions, sometimes more, which means you can't build anything.  It sounds like from your post that there may be an existing garage there currently, but the original surveyer screwed up.  You might be faced with the possibility, after purchasing  the property, of having an inspector come out, either during precon or during, or even after, then noticing the power lines, and being like "Whoops!  Gosh darn, there are power lines right above the structure, so you can't build.  Tear it down, boys."