All Forum Posts by: Karen Margrave

If  you're unfamiliar with Redding, CA and our area, I have included a website with highlights. Hope it's ok. 

Are there any members interested in a MEET UP in Redding, CA. If so, I will set up time and place. Open to all those wanting to learn more about investing in Buy/holds, ADU, STR, LTR, SFR, MFR, Land, Development, Joint Ventures. Speakers from a variety of disciplines that are important to investors. (Builders, Leners, Insurance, Tax/IRA/Trusts, etc. ) Experienced and novice are welcomed. Yes the market is challenging, but there are opportunities. Let's meet up and talk! Who do you want to hear from?

#Redding #ShastaCounty #Redbluff #Anderson #Cottonwood #PaloCero #Shastalake #Lakeshasta #norcal #truenorcal #reddinginvestors #Bssm  #sacramentoriver #mtshasta #burneyfalls #mtlassen #whiskeytown 

In CA land prices, regulations that push up costs to build, fuel prices that affect everything manufactured and shipped on trucks or trains, regulations imposed on employers that push labor costs through the roof, insurance costs, make it very difficult to build new. Unfortunately the politicians do not grasp that, and think builders can wave a magic wand and build for less. In order for new construction to happen, we as builders have to find great deals on lots, and do as much of the work inhouse as possible. For buyers, insurance and utility costs are huge factors. The cost of living is so high that food, and utilities are beyond what anyone imagined. So until we get some pro growth, reasonable people with knowledge of cause and effect into office, California will remain a challenge. Not impossible, but challenging. Also, there are some opportunities out there, but you have to think outside the box, and be ready to jump on deals fast. 

Quote from @Nathan P Tanner:

Thanks for the reply, I appreciate the help so much. all those questions make sense to me, the cool part is I had been looking for my first home in the past year and haven't stopped dissecting the market since and watching things unfold in the past year. I do need to spend more time on specifics like you stated above.

-Are prices dropping? = Yes

-Tight rental supply? = Need to look into this 

-Are rents high? = Not as high as covid 

-inventory of homes for sale? = Need to look into this 

Hearing you say this is the most challenging time to determine what is going on in the market, makes me happy to know im learning now at one of the hardest points. To me it just makes me think after I get threw these times and learn,  it's only going to get easier. 

Something I need to get better at is analyzing deals and finding more deals that make sense I think my next post is going to be about wholesalers and how to find off market deals. some homework I have is figuring more specific questions about what and why the market is doing what its doing.   Karen thank you for your advice I would love to stay connected. 

We used to build spec new construction in Redding, Orange County, and Bend, OR. Unfortunately Covid put an end to that, and things changed in the marketplace. However; in Redding, rents are still high, inventory is tight on homes under 450k. We also have had a big influx of buyers coming up wanting to retire in our area, as we are the crown jewel of northern California. Mountains, rivers, lakes, miles of trails, etc. Though building new doesn't work in the more populated areas, there are still some deals on land in the outlying areas, where 2nd homes, STR are purchased, etc. so we may do a few of them. 

Another option is investing in homes in the more established areas that have large lots, and adding an ADU, or doing some type of value add. 

I have a property in Anderson listed that has potential for creating more space, etc. It's on 2.5 acres and has a HUGE garage/shop. Half could be converted to more living space, and still have a 3 car garage, plus views. 

Sometimes you just have to think outside the box! If you're interested in discussing the market here, give me a call, or text. I have years of experience as Realtor, builder, developer, on everything from SFR, office/retail condos, small office parks, subdivision, etc. 

Unless you signed some type of agreement with the contractor, yes, you can get more bids. However; it's important to understand that in most states, home inspectors are NOT licensed contractors, and they usually will disclose that, and that you should have certain things looked at by licensed trade. Apparently the GC did that, and you don't like that they found more than the unlicensed inspector noted. You can shop around until you find contractors that will get on board with what you want done, or have a talk with the GC, ask if all the items are necessary, and if so, get more bids from other subs. Your GC can get the bids, or you. 

Quote from @Nathan P Tanner:

Thanks for the reply, I appreciate the help so much. all those questions make sense to me, the cool part is I had been looking for my first home in the past year and haven't stopped dissecting the market since and watching things unfold in the past year. I do need to spend more time on specifics like you stated above.

-Are prices dropping? = Yes

-Tight rental supply? = Need to look into this 

-Are rents high? = Not as high as covid 

-inventory of homes for sale? = Need to look into this 

Hearing you say this is the most challenging time to determine what is going on in the market, makes me happy to know im learning now at one of the hardest points. To me it just makes me think after I get threw these times and learn,  it's only going to get easier. 

Something I need to get better at is analyzing deals and finding more deals that make sense I think my next post is going to be about wholesalers and how to find off market deals. some homework I have is figuring more specific questions about what and why the market is doing what its doing.   Karen thank you for your advice I would love to stay connected. 

For someone new getting into the market, it's intimidating. Go to meetups in your local area if there are any. We used to build spec projects, but the past few years with pricing, etc. it hasn't made sene. I think materials costs are where they are, and are going to remain here, so it's our new reality.  Lot costs are high, and you really have to dig to find anything that makes sense for new construction. Our market here in Redding, CA is extremely demanding, as we've had a huge influx of people from other areas for a few different reasons. Our rents are high, (not compared to the bay area, but to our old normal) And homes that are priced at market are still selling (that's why it's important to know the market or have others that do, are prices dropping because of the economy or were they overpriced to begin with? Only experience gives you that perspective) 

My son and I were up looking in an area about 30 minutes out of Redding, where there are some subdivision lots cheap, and houses go for enough it may be a good opportunity. We may do some spec homes there. 

There's many ways to participate in real estate investing. There's people that find the deals, finance the deal, do the work, etc. There's also so many niches and different strategies. I've been on BP since 2009. I remember years ago watching the market and telling Brandon that I could see vacation rentals were becoming a thing, an we needed to start a forum! Here we are, and it became a HUGE thing! LOL 

Where in CA is the land? The first thing you should do is to go talk to a Civil Engineer in the area where it is located. They will be able to tell you the potential for getting a rezone, and tell you the entire process for getting a tentative map drawn to submit to the Planning Department for approval, and give you a list of every step that needs to be done to do that. You can also discuss costs from start to finish, and the costs involved. Once there's a tentative map approved, you can market it to a developer, that would then need to take it the rest of the way, through the State, etc. 

Depending on the parcel, it could involve a variety of governmental agencies. Army Corp of Engineers, Fish adn Game, Bureal of Land management, etc. 

Also, as Jay Hinrichs indicated, you haven't deducted the land that is needed for the roads, curb, gutter and sidewalk, nor the costs of installing infrastructure (water, sewer, gas, possibly cable, electric, etc.) 

All of those things cost a lot of money to do. Therefore; if you're selling the land before any of that is done, realize you need to price it accordingly, at wholesale price, because the numbers have to make sense for developers. You can text me with any questions.  

Of course! There are so many strategies. In CA due to the lack of rental homes, many people are doing shared living, which raises ROI higher than renting out entire house. You need to know the market where you are investing in order to understand what makes sense. Is there a tight supply of rental units? Are rents high? What is the inventory of homes for sale? Is there getting to be a glut on the top end? Are prices dropping? There is a lot that goes into determining what is happening right now in the market. It's one of the most challenging I have seen in decades. There are good deals, but you have to know your local market, and understand what is driving it.

Quote from @Henry T.:

If you're thinking of being a landlord it may be too late for you in your 50's. If you self manage it can be very stressful dealing with tenants, especially if you have no experience. Everything may start out great until its not, then what?  If you hire property management there goes your profits. Know the laws and know how to screen a property manager or you'll be sorry. It's complicated and not for the squeamish. But if you're gung ho, you can find rentals that offer good returns in some parts of the country, (not in Seattle) that hopefully pay a nice rent while also appreciate into the stratosphere..  Like others said, diversify and don't spend all in one place. Money market funds, t-bills, low stress and easy. Also,  research and find some stocks that pay a nice dividend. A little here, a little there.

50's isn't close to being old! After the passing of my husband, I was 63. I relocated from so cal (where we built spec builds) to Bend, Oregon and did a few fix/flips, and spec build. Then, relocated again to Redding, CA, and I'm now, at 72, focusing on working with buyers/sellers in real estate, and getting geared up to start building ADUS once rates come down and materials costs are lower. My son is doing the construction part. You're only old if you think you are. 

Quote from @Damon Bruceo:

What would you do with $400,000 cash?  My goal is to create passive income because my wife and I are in our 50's with no 401k savings.

What would you recommend for a passive income?

Not a private lender, way too much risk, and only experienced investors should consider lending money like that, there's too many things that can wrong, and unless you're in a position to right the ship if things go sideways, it's not a good idea. No matter how solid a project looks, there is always something that can go wrong. 

You are a rockstar!! So happy to see you being so successful.