All Forum Posts by: Wyatt Franta

@Alec Khlebopros

There's a lot to unpack here. Is a quadplex the HBU for the zoning & location of the land? Could you feasibly build a mixed use space to maximize returns?

To answer your question more directly...How do the local demographics look? Are there a lot of middle-class families, (3/2)'s? Lower-income families (2/2's or 2/1)'s? A young millennial work force (1/1)'s?

Build to suit the market.

Hey Torend,

Exactly what @Jaysen Medhurst mentioned.

The goal of an ARV valuation is to determine if the property, when renovated, will drive the same demand as surrounding comps, usually within a 0.50-mile radius. Zillow, Redfin, & all of the online algorithm sites are extremely unreliable. Get a Realtor to run comps for you.

Your deal seems to generate a very healthy return, which has me a little concerned your rehab budget may be too low, or Zillow is leading you astray with the property's estimated market value. Double-check your numbers, and if they're still accurate, you hit the jackpot here.

Good luck! (And keep us posted) 

Just as @Derek Harris Inquired. 

The price per door/building/sqft is only nominal. What truly matters is your desired ROI, CoC, IRR, etc.

If you want to make 8% on your investment per year, does this opportunity present that? Do you want to get in and out while making a nice return via renovating -> releasing at market rent -> selling? 

If you want to buy/hold and have a passive income with no real goal for the property long term, will this property allow you to do so? 

To negotiate with the current landlord, find his motivation. If he wants to offload all the properties as soon as possible, see if you can negotiate a discount for buying multiple properties at once. You save him a lot of time, he saves you some money in return.

@Myles Taccini

Hey Myles,

Welcome to BP!

Download the app Meetup for REI groups in the OC. Also, reach out to investors, developers, investment specialist Realtors, etc. for help.

BP is a great platform to get you more than comfortable with real estate investing as a whole.

Good luck in 2020!

@Raj G.

Hi Raj,

To pile on a little bit more as to what everyone above me have already mentioned:

1.) Signed contracts in EVERYTHING real estate not just remodels

2.) For term-based work (construction, renovations, additions, etc.) set completion dates, paid milestones, and if you can afford it, bonuses awarded for completing work ahead of schedule (with specific wording to make sure they complete work up to code, quality, etc.)

3.) Have Plan B's. If this guy can't do the job right, who can you call to step in?

Early lessons are great, make sure to learn from this them!

@Greg M.

Have you done this before? It's a fantastic idea I haven't considered previously.

Is there anything you need to tell the insurance company, or have the new tenants sign in addition to the lease agreement?

Hi John,

When you pay your "First & Last" month's rent when you initially move into a rental, that last month's rent is treated as a security deposit. Depending on where you live, your rental contract should also state this. 

The last month/security deposit goes toward renovating the property (exact renovations may vary state to state) If there is a balance remaining after renovations, you will receive that amount back.

That money is not considered paid-in-advance rent. 

I am so sorry for your eviction, usually, landlords handle situations like this much better. 

Welcome to the everyday struggle of trying to connect with agents who understand commercial real estate/real estate investing. The questions you're asking are reasonable, appropriate, and necessary. 

To screen agents, ask a few basic questions that should immediately tell you if the person you're speaking with really understands real estate investing:

1.) What is a CAP rate?

2.) What is CAPEX, and what is the general reserve percentage?

3.) What is rent escalation, and what is the average per year?

For area-specific questions:

1.) What's the average CAP rate MFRs are selling for around (Area)?

2.) How many doors can ($$$) get me in (Area)?

I'm not familiar with any agents up in the Bay Area, so, unfortunately, I can't connect you with anyone. But I hope you find someone who can help you lock down what you're looking for.

Good luck!

Regardless of the scenario, any promises made by either party must be put into writing if the benefitting party wants to reap the benefits.

Get an addendum signed which specifies what the current leasee will be doing, and what will happen to your old appliances and the new appliances during that period and after the expiration of the lease agreement. 

@Dave Foster

Great catch, thank you for the correction!