All Forum Posts by: Sebastian Marroquin

are you looking for other investments in the area? 

HP < altadena, Pasadena etc 

I won't be your realtor or in your area: so I won't. 

Interview 2 or 3 realtors : the good ones will have everything you need. Ie lenders, contractors, title reps, architects, escrow companies, and will walk you through the process. I don't understand going through here. What I can do is put you in contact with a realtor there from my network once you are ready for it. You should be talking to a realtor, your tax professional and a lender now if you plan to buy in 4 to 6 months. (Don't reinvent the wheel, don't go at it alone, and lean on the professionals bc that's why they will make money off of you (in other words, that's why you pay them). 

choose a realtor and have them refer you 1 to  3 lenders. 

Agree with everyone on here: 

Don't know your area: but I would say your property needs to be attracting multiple potential tenants, if it is not, then take a look at your listing, pricing, photos, marketing etc to see why it is not. 

Then for this or any other couple: figure out what scares your or concerns you about renting to them and look for ways to manage the concern. What can you put in place to make sure that if they get in a fight, that the remaining person will be good for the rent. Do you have a cancellation of lease clause that benefits you monetarily? and gives them a quick out that is manageable but that will cost them something? 

What concerns do you have about the mom? (can you put language in the lease that will protect you from anything the mom could say in the future?) etc 

We just had something similar happen: the mom was on the phone with the daughter in the initial phone call and she was a bit of a B**** so that was a red flag for me.  

Good luck 

Do not give him a specific price ever until you see it and assess it. 

You can give him a window of price: Based on my numbers, homes like yours are selling between 200k and $300k 

or $500k and $600k etc 

The first step is for me to walk the home and assess it visually: from there, I will have to walk the home with a contractor to make sure that I know what I am walking into. Would you buy a car with out test driving it, no... right. I think you can get in my shoes. What would you suggest to your daughter mr. seller. (let him answer). 

This is my first home purchase and I want to make sure that I don't make a mistake. You seem like a 'fair' and honest guy to me! and why I am doing business with you. I am as honest as they come also. :) 

Lets go for coffee so that we can get to know each other and feel comfortable with each other. 

While face to face: What's important to you? What is your goal? (aside from making the most money possible on this sale?) 

Get to his motivation: Give him options that work for you: 

1. Option one: lets do the right thing and walk the home: assess it: and then decide on a price ( I suggest the price to be: Price minus - Repairs minus - commissions (5%) ) 

2. Option 2: If we are not going to look at the home: then my best offer will be ARV x 70% : purchase price

The seller has to feel confident that you can close the deal, That you can pay, and that you know what you are doing. 

They also want to sell the home for as much as possible and they know you want to buy it for the least possible (so say that and address the elephant in the room). Its ok :) 

many times: you can give the seller what he wants (price ) and then do inspections and negotiate to a price that works for you or walk away. 

Many, many, many times I see buyers not wanting to spend on inspections, appraisals etc or not wanting to go through the long process and then negotiate a good price. 

If you meet 5 of these sellers: and spend on average $1k for inspections on each : that will be a total of $5k spent but you get one offer accepted for the price you want: will that be cost effective. 

I say yes! 

Let me know if you have any questions 

good luck 

I'm with Jason on this one. It is great to come on here and get perspective from many people, but you should have a buyer's agent advising you on all this. 

Make sure you have a contract prior to closing for the lease back period, check in with lender to see if everything ok (usually ok for less than 60 days depending on how you are financing and taking ownership, and I would do a 10k hold back). Sounds like a lot but there shouldn't be a problem if they are really going to leave. 

The lease back at buyer's PITI unless you don't have leverage.... (i.e. too many other buyers competing for it).

Honestly, all of this should have been planned out from the beginning and in writing. 

You can still clean it up. Is the listing agent "representing" you? 

That would put them in liability so they will be enticed to put you in a good position... 

Good luck 

I would look for an off market home: at around 800 to 1000 sq ft: 

Buy it and renovate it to increase the value; Home will likely be 2 bedrooms but cheaper. 

Save more money and add a master bedroom to it (500 sq ft) : increase the value by about $150k to $200k depending on price per sq foot. 

Save more money and do an ADU: rent it out for cash flow.

Then refinance it to get money out and rent it out, and move on to your next purchase and do it again. Or sell it for a profit to get something bigger and better location and do it again. 

Yes this will take some time... yes you need some money to do it... but you will make a great return on it, and it will position you in a great way for the future. 

Congrats! I still don't get why more contractors do not take advantage in the fact that they hold the biggest and best leverage out there.... 

If i were a contractor this is all I would do: Buy small and make bigger. (by the way, I have a buyer for you once you finish at around 750k to 800k :) ) 

Look for high price per sq ft and buy small and add 1000 to 2000 sq ft: the value add with your personal contractor price per sq ft to build is crazy. 

Unfortunately you will not get the value for the ADU (from a price per sq ft) perspective, but you will get a great value for the duplex. (For future reference as food for thought: if you have a building budget, look into maximizing the building sq ft for the main structure (obviously within the comps in the neighborhood and depending on your end goals), but you will get the price per sq ft on the main dwelling and a lot lower for the ADU.

Let's connect. 

I have seen several that have a great design and do everything you mentioned on here. The only draw back I could find is that they will be more expensive than building it out in a conventional way. 

The Pre-fab ADU will likely be around 10% to 20% more expensive + they do not include the grading and foundation: which will be around $10k to $25k depending on how big you go.

So something that could be $100k to $130k will be closer to $150k to $200k (for example). 

I did see that the timing is faster: 

Where the construction process could be between 3 and 6 months and the pre-fab installation could be as little as a couple of weeks. (and in that case you could start making rental revenue right away: and let's say that the rent is about $2k per month for the duration that you would be doing the construction (or 4 months) then the loss in rents would be: about $8k with this example). 

Put that in your numbers and assess all angles of your project. 

Hope this helps a bit! 

Hi- I live in pasadena and my tax person is really good. He has a lot of clients that own businesses, invest in real estate (flips, rentals etc).

Let me know with a private comment if you want his info.