All Forum Posts by: CK Hwang

Hi Shane, 

I'm not an expert in LA, but I have seen some deals come across my desk in the 180-200K price range. The houses in like the worst part of town though, like really bad parts near downtown LA, bad parts of Compton etc, so it's pretty much war zone investing. I take it those types of neighborhoods don't work for you?

Tried attending a few auctions, but the thing that confuses me isn't so much the title issues as much as how the buyers are making profit at something in which they are bidding up to 85-88% of market value. 

Personally, from my perspective, your job sounds more like a back end job i.e. office manager, rather than front end, leasing agent, property manager, in which I don't believe a real estate license is necessary but I am curious to know. I'd be surprised though because the back end office staff in my realtors office I am pretty sure do not have a realtor license. 

Hi everyone, I received a call today from a distressed homeowner. I'm not in the business of lending money, so I thought I would pass on this lead to lenders who work in the bay area. 

The situation is as follows

1. Borrower is facing foreclosure, estimated court sale date is September 2nd 2014. Borrower has been in default since 2010.

2. Estimated home value is $950K, estimated loan is $750K. Home is located in nice neighborhood in Berkeley. Buyer has lived in house for 40 years and wants to stay in house, hence, it is not a case I can take on as a fix and flipper.

3. Borrower is looking to either refi or do a second on the house for $160K to pay off amount in default.

4. Untile recently, borrower has been working for tech startups and hasn't been receiving a steady paycheck, however, the latest startup he is working for has since taken of and is now receiving a steady pay check. 

I'm not in the lending business so from my perspective, it looks like a really long shot that he will be able to get a loan, but I thought there might be some lenders on the BP forum that can work this case somehow with some form of unconventional loan. 

I'm not asking for any commissions, but if you do work out a loan for him, I would love to be able to interview you for an hour to just learn more about what is possible in the world of lending.  

If it is a case you can take on, please feel free to email me at [email protected] and I will forward your contact info to him. Thanks. 

From past experience, if you want to form a partnership in an LLC, never use a 50-50 formula. Do something like 49-51% formal. Someone needs to be in charge.

The reason being that if there is a conflict or some need to dissolve the partnership, a 50-50 split could mean litigation to no end since there is no primary owner of the company. 

If it were me, and the neighbor hasn't gotten into a litigious mood yet, I'd just pay the $750 or so to add a whole bunch of gutters to solve the problem. Once you bring lawyers into the equation, it's a whole lot of money, possibly even more expensive than the solution plus a whole lot of hostility that money can never pay off.  

Hi Monica, getting started is tough, but one of the first things I would do if I was in your position would be to go to a bank or a mortgage broker and see if you could get a loan, and if so, what type and how much. Without knowing, it's like shooting a gun without knowing how many bullets you have. 

Next, I second @George Maka  idea to start by wholesaling. Another thing you could do, is to go to a RE club meeting in your area and find cash or credit partners to do your first deal. Often the value in these partners is not only their cash or credit, but the knowledge that they have. 

If homes in your area is $85K, it shouldn't be too hard to find someone who is willing to take a chance and work with you if the deal is sweet enough and the partnership is clean.

"Net profit of 7% isn't profit. It's a loss if you account for all your expenses."

@Chris Martin , sorry, I don't quite understand why this net profit isn't net? what expenses would he need to account for if it's already the net?

I'm wondering because he already has a line item for $70K, which I assume is for realtor commission on the sell side, taxes, transaction costs and financing costs?

I've used Title 365 on several of my flips and have been pretty happy with them, but I've never challenged them with any particularly difficult title situations though.

Yes, totally agree with @Bill Larsen , the bidding contests have certainly slowed down and deals are starting to pop up far more regularly. Of course the anxiety now is being able to sell the flip projects. 

Don't think prices have gone down, but I'm not counting on them going up significantly either.