All Forum Posts by: CK Hwang

Hi Anna, personally I would go to a lender first, see how much funds are available then start looking. Often, if the deal is good, you will need to act fast because there are other investors out there. And if there aren't, I would be very very careful with due diligence. If no one else wants it, there is probably a reason. 

Waffling around trying to get funding at that point would almost always means the seller moves on to another buyer. Unless the market is absolute crap..which at that point, you need to ask yourself if it is a good idea to invest in  a crap market it might be, it might not be. 

Like @Andy Collins , I personally wouldn't do condos as a long term rental unless i am buying the entire building. There can be legal issues pertaining to the HOA, corruption in the property management, too many outstanding liens etc which limits your ability to liquidate your investment.

Not to say condos couldn't do well as a rental (in fact i do have one condo as a rental), but from past experience, I think there are simpler properties to start with, like a mid size single family home in Mesa (preferably in a nice neighborhood without HOAs), where you can learn the ropes, not have to worry about getting your neighbors co-operation should any issues come up with the property and easy to liquidate if you find land lording is not for you after all. 

Also, single family homes tend to have better capital appreciation and if you want financial freedom as you had mentioned in another post, I think capital appreciation is important.   

Mike, the water intrusion issue isn't even that big of an issue as drainage can be put in pretty cheaply. It's only really bad where it has degenerated to the point where there is mold inside the drywall. 

Something to consider though, it might be worth a hundred bucks or so to hire someone to dig the garden for a bit and make sure that the crack isn't due to an underground stream running under the slab. The stream might be dry now, but come winter or spring, it might start flowing. Once again, this isn't a problem in itself as some drainage can help alleviate the problem and generally isn't terribly expensive but if you are holding long term, I would ensure the issue is resolved.  

Mike, from what i've observed, you couldn't call yourself a real estate investor until you've attended at least one Rich Dad Poor Dad session. It's like the rite of passage for every real estate investor. It's like the learner's permit of real estate investing. :D

Hey Stephanie, if you have never done this before, I would strongly urge you to consult a real estate attorney, because from some past dealings, it isn't just the sales agreement that is important, but all the disclaimers pertaining to abestos, earthquake zone, fire zone, landslide zone, visual inspection forms, smoke detectors etc etc, that shields you from liability and needs to be signed by both buyer and sellers. I am not sure if a FSBO requires it, but when I did an FSBO, the escrow company still had all parties sign these disclosure forms.

A question I would pose to you is how much capital do you have? If you have some capital, I would consider places like Nocal Bay area, San Diego, Orange County, Seattle, etc.

I know it sounds crazy because compared to other markets your ROI as a percentage is lower, but I look at it from a liquidation standpoint. In large urban areas with relatively concentrated housing, there are generally a large pool of ready buyers so as a flipper it helps to alleviate the risk of being stuck with inventory.

Of course on the other hand, it makes acquisition much harder. but I'm always more worried about selling than buying.   

Hi Mike, I've done a few houses with slab cracks and the general rule of thumb is that if the width of the crack isn't wider that a quarter, there is nothing to worry about. I would however pour in some waterproofing sealant on the floor to prevent upwelling of moisture. 

Also, if you had mentioned that the house is 50 years old? Often in these older homes, they might not have used rebars in the concrete when it was being laid leading to these type of cracks, but it's hard to tell from the photos

Being on an area of expansive soil would also result in cracks for sure. 

Personally, i think the water intrusion is a bigger problem to be resolved.  

Kimberly, personally, from experience and from what I hear form others, they type of vacation properties matter significantly as well. I generally avoid even thinking or looking at condo type vacation properties due to the crazy corruption that goes on in these investments and would recommend focusing on single families or multi families but in which you own the entire building. 

Here is one example a friend of mine who is currently struggling with his vacation rental. He owns a condo unit in a development that is primarily used for vacation rental. In the last 2 years, the property manager setup an acquisition firm to purchase condo units in this project that are being foreclosed on, the property manager channels the incoming vacation rentals into the units owned by his LLC (and or partners). This means that other owners are getting increasingly smaller returns, forcing them to either sell cheap or get foreclosed on, in which his LLC then continues to buy up the rest. It has reached a stage where his LLC owns enough of the development to control the homeowners committee. Sad to say, i think this is going to end badly for my friend.

Hi David, I am a full time fix and flipper and from what I've seen, I think it's not easy being solely a full time wholesaler. Most of the wholesalers I meet mix it in with some flipping or being a RE agent as well. 

Judging from the REOs the come on the market here in South Orange County, I don't think wholesaling REOs would be an option for me. 

Most of the REOs are being listed at or above ARV. Crazy. As such, these properties are languishing on the market but the banks don't seem in a hurry to cut prices. I find this especially true if the lender is an out of state lender.

Totally agree with Bob. One of my current tenants has a bad credit due to a bankruptcy as a result of medical bills. I rented the house to them and they have been early with their rent every single month. I think the reason for bankruptcy or bad credit is important as well.

But honestly, I would rather have a larger pool of tenants to choose from, so if I were in your position I would lower the rents slightly to attract a larger pool.