Showing posts with label los angeles properties. Show all posts
Showing posts with label los angeles properties. Show all posts
Monday, December 29, 2008
Tuesday, November 4, 2008
Documents Make Or Break The Deal... What You Need To Have To Be Successful
When writing an offer, whether it is to a bank or to an owner, you want to prove beyond the shadow of a doubt that you are the one buyer who will have NO problems closing escrow. This is a winning formula of documents that leaves nothing to the imagination of the seller:
1: The bank/broker prequalification letter- probobly the least important document in these times, because banks constantly renig and change thier lending requirements. But people still want to see it and always will.
2: The earnest money deposit check- generally 3% of the purchase price and generally the total amount of money that is put at risk from the buyer defaulting on his responsibilities per the purchase contract
3: Proof of funds- in the form of a checking account statement, with the account number blacked out
4: The first page of the buyer's credit report- with the social security number blacked out
5: The bio- an often neglected part of the offer, telling about the buyers financial position and incorporating emotional elements designed to appeal to the person making the selling decision. Be sure to use any and all information to paint THE most positive picture you can.
Follow this formula and half the battle is won. The other half being that you must have the best price and terms out of all the potential buyers. Does anyone else have something to add or more details on any of these points?
All That Glitters Is Not Gold
Short sales stink. That is what I tell my buyers who are looking to buy a property to move into immediately.
The MLS is flooded with homes for sale that are not truly for sale. The owners do not have the authority to sell the home, because they owe more on the home to the bank than they can sell the home for. This is what we call a short sale.
So when I carefully select the homes that are immediately available, such as traditional sales and foreclosures, I am always dissapointed that my clients do not listen. Instead of selecting from this ample pool of homes, they go to an online search source and select 20 short sales that they want to see. And they don't even know that these homes are short sales.
Almost all search tools you will find on the internet do not offer the ability to filter or even identify short sales from your search results. So get a Realtor you can trust to do this for you. Generally, the fact that a home is a short sale is concealed in the "private remarks" section that is only available to Realtors.
Nobody truly cares about getting this home to change hands but you.
This is where the frustration begins to set in. They find that they would love to own most of these homes that are short sales. And of course, who wouldn't?! When a property is priced far below market value, it seems very enticing. Until you write the offers. And then you wait. And wait. And wait. And call. And call. And call.
Even the "approved" short sales do not respond to your offers when they are written at full price! This is because the "seller" is not the seller at all, just someone who wants to save a small part of thier credit rating in order to save the disinterested and unorganized banks some money. And the listing agent doesn't care either, because they know the game. These short sales only serve to bring them more clients that usually do not end up with the short sale they initially sought to purchase. By the end of any short sale closing, the buyer and buyer's agent have spent waaaaay too much of thier own time securing a home to save the bank a buck.
So the bank, the listing agent, and the owner of the property all do not really care. Why should you? In my opinion, you should not.
Share some success stories with us, readers. I want to hear from those of you "lucky" enough to take advantage of these great "deals". And tell us, was it all worth it?
The MLS is flooded with homes for sale that are not truly for sale. The owners do not have the authority to sell the home, because they owe more on the home to the bank than they can sell the home for. This is what we call a short sale.
So when I carefully select the homes that are immediately available, such as traditional sales and foreclosures, I am always dissapointed that my clients do not listen. Instead of selecting from this ample pool of homes, they go to an online search source and select 20 short sales that they want to see. And they don't even know that these homes are short sales.
Almost all search tools you will find on the internet do not offer the ability to filter or even identify short sales from your search results. So get a Realtor you can trust to do this for you. Generally, the fact that a home is a short sale is concealed in the "private remarks" section that is only available to Realtors.
Nobody truly cares about getting this home to change hands but you.
This is where the frustration begins to set in. They find that they would love to own most of these homes that are short sales. And of course, who wouldn't?! When a property is priced far below market value, it seems very enticing. Until you write the offers. And then you wait. And wait. And wait. And call. And call. And call.
Even the "approved" short sales do not respond to your offers when they are written at full price! This is because the "seller" is not the seller at all, just someone who wants to save a small part of thier credit rating in order to save the disinterested and unorganized banks some money. And the listing agent doesn't care either, because they know the game. These short sales only serve to bring them more clients that usually do not end up with the short sale they initially sought to purchase. By the end of any short sale closing, the buyer and buyer's agent have spent waaaaay too much of thier own time securing a home to save the bank a buck.
So the bank, the listing agent, and the owner of the property all do not really care. Why should you? In my opinion, you should not.
Share some success stories with us, readers. I want to hear from those of you "lucky" enough to take advantage of these great "deals". And tell us, was it all worth it?
Thursday, March 20, 2008
Los Angeles Rezoning Opportunity
5742 N. Elmer Ave, North Hollywood, CA
7250 square foot lot.
The Investment Strategy: Buy and Rezone
The property has multiple apartment complexes dotted along the street. The home was built in 1920 and is a prime candidate for demolition. Buy the property, apply for a rezoning to multifamily which would allow the building of an apartment complex. Then, either sell the property for a profit to developers or complete the construction yourself.
This is an advanced strategy and is not recommended for beginning investors. The profits for this opportunity are not easily quantified because the cost of holding the property before it is rezoned can be substantial. Additionally, construction costs and zoning compliance can be highly variable and are beyond my expertise. To minimize costs, the property could be rented out for at least the mortgage payment.
The Location: Right off of Lankersheim
Walking distance to many, many desirable renter-friendly businesses. This particular street has a ghetto feel to it, with multiple males standing around together on the sidewalk before 5:00 PM. There is new construction on this street and new businesses popping up within a short walk. As rental rates rise, the less desirable elements should be squeezed out. Available parking is sparse.
To view this property, call me at (818) 726-5982. You will need at least 10% down payment to buy this property ($42,500). To view more properties online, click here
Alternate Strategy: The property is currently zoned R1.5, meaning that the owner has a right to build a guest house on the property. To cash flow the property, build the guest house and rent it out for additional income while applying for the rezone.
Guest House Tips: There are 3 things you need to do to optimize the income from a guest house. 1) Create Privacy 2) Give each unit its own yard 3) Give each unit its own separate entrance. Do these three things and a full guest house (with kitchen and bath) should double it's rental value.
Entry Level Fixer
Image by simonov via Flickr6224 Denny Ave, Los Angeles (North Hollywood), CA 
What is your investment strategy? Fix and rent.
$398,000
The Numbers: 10% down ($39,800) with a monthly payment of approximately $2,200 per month with insurance, taxes, and cost of interest on the $40,000 down payment from a home equity line of credit included. Will rent for a minimum of $3,000 per month after recommended work is performed (I can find you tenants that will pay more than $3,000).
The Terms: The offer should be full priced, as the home is priced very well. A 3% credit back to the buyer will help cover closing costs and renovations ($12,000).
Your Profit: $800 per month minimum
The Location: North Hollywood is going through a revitalization. The NoHo arts district is close by, with hip restaurants and entertainment. Nearby 3+3 homes that are like new are listed for $750,000. North Hollywood is one of the few Los Angeles areas with entry level homes selling for under $400,000. This property is located just north of Oxnard, and is on the edge of a very desirable area. The price is right.
The home statistics:
| Beds 3 | Baths 2 | |||||||||||||||||||||||||||||||||
| Style Contemporary | Stories One Level | |||||||||||||||||||||||||||||||||
| ASqFt 1,310 | YrBlt 1943 | |||||||||||||||||||||||||||||||||
| ALotSize 7,379 | ||||||||||||||||||||||||||||||||||
About Privacy:
Property already has plenty of privacy, which is one key to creating value and getting premium rents.
Recommended work:
Cut back overgrown plants all over property: $200
Clean up pond, add gold fish and lily pads: $100
Plant new landscaping in a few, select places: $100
Remove old furniture, plant waste, construction debris: $300
Plant new grass seed in front yard: $150
THE Feature:
The pool is THE feature for this property. Creating a feature such as a fish pond, pool, jacuzzi, or other centerpiece for the yard is a key element to creating value and obtaining higher than average rents.
The pond is already present, but in unimpressive, small, and poorly situated. The pond cannot count as the necessary feature because of its shortcomings.
Tip for ponds: Use gold fish, not expensive Koi. Renters may not feed the fish, may let the pond dry up, or simply not take proper care of fish. Gold fish turn wild and adopt entertaining behavior when put in an outdoor environment.
Tile floors throughout 65% of home with neutral, durable tile: $3,500
Repaint entire interior with neutral, sand colored paint: $750
Other property features: Enclosed patio that adds value to the property, not included in square footage. 1 carport. Detached garage. TONS of storage.
Kitchen is clean, no needed work. New counter tops would add value for resale, but not needed for the first two years of renting.
Total Fixing costs of $5,100
To open escrow, you need to write a check for $12,000 from your savings or home equity line of credit as your earnest money deposit.
$40,000 down payment
+ $5,000 renovation cost
- $6,000 credit (closing costs already removed)
= $39,000 required for this opportunity
Foreign investors without a credit history will need 30% down, or $133,333 to get a mortgage.
View more homes in North Hollywood: http://realvana.com/california/los-angeles/north-hollywood.html
To take this opportunity or to look for similar investment opportunities, call me at (818) 726-5982
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