All Forum Posts by: Scott Raley

Are you a real estate  agent or an investor/wholesaler? If your an agent, build a network of go to investors when you have a good deal. Same goes if your a wholesaler. Build a network of prequalified buyers / investors,  ( yes, that means credit scores, financials and verified  funds to close)  so you can place the opportunity with multiple buyers who can perform. He or she,  who steps up with the best price and terms to the seller.....hopefully wins. You do not necessarily  make alot of money on every deal........but if you help other people make money, a just  reward will come back to you. It comes down to helping people get what they want and understanding what your goals are on each deal. 

Play the next hand.  Think of this first effort as a lesson and not a failure. 

In my opinion, the NW within the Redmond / Seattle market looks very promising  to invest in the next 5-10  years. 

A very critical questions is how long you  plan to be living in that area. If you plan to be there 3-5 years, I would look to make a purchase. 

I like this area for the following reasons:

Good job market, pacific rim access for new  immigrants and investors funds who like west coast investments, still affordable housing relative to other west coastal markets ( Bay Area, LA, San Diego, Sacramento, Phoenix) The fact  that its  a cool (no pun intended) place to live for millenials make this a huge positive play. This is a long term growth area as people flock to both jobs and quality of life. If you invest in Seattle proper, understand about 75% of the homes were built before 1960 , so be prepared for lots of potential repair issues. 

This was a very creative,  insightful and tragic movie. I'm interested to learn from those who have seen it, what impact this movie had on them. 

For myself it is the fact that only one trader was convicted and went to jail out of the thousands of Jr. and Senior executives at the banks and securities firms who caused this calamity. Make no mistake, Wall Street set the  underwriting guidelines for  the lenders to  follow. Our Department of Justice,  under the leadership of Special Prosecutor Lenny Breuer  and FBI, failed to bring to justice these greedy, self serving people. 

AND  guess   where Lenny Breuer now works? He's back in private practive representing the very same companies he could have prosecuted with a nice 4 million a year salary. That's the way it works now in Washington. The fats cats are on a free ride...............so be prepared for their greed to cause more havok one day when we least expect it. 

A big part of a good answer   depends on your timeline. If your dead set on getting a place in the next 6-12 months I would recommend a tandem approach. First, make sure  EVERYONE  you know, understands that your looking for a SF  or multi family unit  to buy..... right NOW.  Before you write an offer, make sure your financing plan is rock solid, so you can move forward with confidence should someone give you a lead or you meet the right seller. You must know your numbers in order to make an informed decision to go forward or pass.  Knowledge is power !

Second, working in tandem with your personal seach, it will cost you nothing to build a relationship with a real estate agent who specializes in finding great deals on properties in the areas your most interested in. Just be very transpartent up front and discuss your goals. Make it crystal clear that if they show you a property, and your buy it, they will represent your interest in the transaction. You can also communicate clearly, that your also looking on your own and may find and act on an opportunity yourself, without needing the services of an agent. Most agents know that investors are actively looking and if they bring you an opportunity, you will utilize their services. Look for an agent that is both a realtor selling and buying on behalf of others but that is also an investor who is active in finding off market opportunities. Do some homework, get some references of other investors this agent has helped. Interview a few different agents and then go with someone you like with a solid reputation and great negotiating skills. A word of warning, tread carefully as off market transactions can be very tricky ! There is often a reason they are not listed on the MLS.

Good luck James. Now go there and kick some A** 

One overlooked way to find great potential opportunities is for your team realtor to seach daily for "back on market" better known as TFT transactions ( transactions fell through) This is where the transaction or sale of a home, for a multitude of reasons, falls out of contact and comes back on the open MLS market. If your dialed in with your financing or better yet ALL CASH, you have a great chance to step in and take control of the property. This take some leg work up front, meaning your agent needs to keep a steady watch of the properties on market/short sales and build relationships with the listing agents ideally before some of these deals fall apart. That means reading available inspection reports and requesting offer instructions, etc. The fewer contingencies you ask for in your offer the better. But, I highly suggest you leave yourself, at a minimum, a short property contingency to do your due diligence. This provides you with a "back door" to exit the deal if you find major issues or surprises.

One of the best oppotunities is when a transaction has TFT'd and needs an all cash buyer before the property is foreclosed on. These are often highly motivated sellers, especially if there is  equity in the property and  they need to get the bank to work with them to craft a solid deal. Often the bank will extend the  foreclosure sale date if  a solid offer with few contingencies is back on the table. If it's a short sale or foreclosure , you as the second or perhaps the third offer, have much better leverage to extract a better sale price. Ideally if no inspections have been done, you get your own inspections,once your in contract, and squeeze the bank on costs for  necessary repairs, especially section 1 work. This can turn a good deal into a potentially great deal. Remember, you  can make a good percentage of your profit on the buy side. If you pay retail....your not protected if the market should turn down and your not prepared to buy and hold. 

As others have stated, you might want to expand your search area. Have you considered the downtown area of San Jose?

Your goal of buying a duplex as a first time investment and living in one unit is sound. You can use 85% of the rental income of the other unit to help you qualify for the loan. If your cash poor, you can go FHA with as little as 3.5% down plus closing costs but it will be very challenging to find a deal that will give you positive cash flow even with renting the other unit. Another option is to partner with another investor who has some cash to invest. 1/2 of a pie is better than nothing. Starting off I would recommend you build a solid team before you get too far along. That could consist of a realtor who specializes in off market opportunities, a creative and tenacious lender, and contractors/subcontractors in areas where you area not skilled.

Yes, you can take on one or more of these roles yourself  but with 3/4 million $$$ at stake you need to make all the right moves.

Good Luck,

This is my 30,000 mile high in the sky overview of real estate investing.

I tend to look at investing in real estate like a  high stakes poker game, especially in the Bay Area. It's very important you stay patient and be ready to play the right hand when it comes up. That means becoming an expert  on an area, having a well seasoned team in place to act quickly ( realtor, lender, title and contractors) and having some balls to execute on the  right transaction. Ideally, you have the big 3 in place; your buying at a discount to retail, your confident you  CAN AND WILL  earn 2 for 1 dollars spent on improvements and #3, your buying in a market that is trending higher. If all 3 are in effect you will hit a home run. If 2 OF 3 work out for you, you will  still make some money either short  (flipping) or long term  (buy and hold) 

If however you pay retail, you overspend on improvments and your market goes down, your in trouble. Cannot stress enough about building a great team around you. So, stay calm and rational  but   be prepared to beat the bushes to find the right deal.  As a new investor, you have to relentlessly pursue  opportunities. Everybody you know and  everybody you meet has to know your a serious investor looking to create win-win transactions. 

Love the fact so many Cal grads are on board here ! Go Bears !

Scott Raley    Realtor- Investor

President Raley Real Estate Group LLC / CSR Real Estate Services

408-218-9860

Hello Fellow Flippers,

What is your ROI (return on investment) target on properties you flip ? My goal is at least 10% or a minimum of 40K. I'm investing in the Silicon Valley area and our purchase price is at least 500K here for SF home. I'll usually want more if the project takes more than 6 months and/or involves adding living space.

What are your ROI goals and what areas are you investing the get the returns you want ?

I don't believe your idea is "horrible" but it is, in my opinion,  naive. My recommendation is you find a great mentor/business partner with a solid track record of profitable deals, and start investing with them. This arrangement may work best on a deal to deal basis  under a partnership agreement. That way your not joined at the hip long term. Concerning your concern for the poor, I would set aside a % of your profit on each deal and then donate those funds  to a  non profit serving the housing needs in  your community like Habitat for Humanity.  They do all the prescreening, and have a very effecitve, time tested  model. Its a win-win by providing  for and preserving quality time for your family and helping those in need in your community. Invest wisely !