You don’t know how much I really appreciate your advices. I just spoke
to the builder and you were right…he does have unsold properties that
he had to take care of. He was just making promises that he’ll sell our
properties and even asked us to take out our sign so buyers would
walk to his office instead to ours. Lesson learned that I can’t really
trust some people.
We thought of leasing it and unfortunately, after much research, the
monthly rent that people are going to pay me is not even half of what
we’re paying. The monthly rent in Vallejo is very low but I guess it’s
just another thought.
It is a remote/coded gate so my next mission is to print as many flyers
as possible, with $20k credit to buyer. I can’t think of anything else
except to post to mls, newspaper, craigslist…i would really appreciate
your suggestions.
I enjoy reading this forum esp the lessons people have learned because it gives me an idea of what not to do and what to do.
Unfortunately, I didn’t read enough nor researched enough that I am now in a financial hole. You see, the books are just so overwhelming that it made us jumped on the RE investment without thinking twice.
We met a builder, broker, and investors - who at first we thought was a good circle of friends…NOT! WE WERE WRONG!
The builder showed us around the new community (phase 2) and said that within a few months the prices will go up with a since they are currently building new construction. These are high end properties $750,000 and up in California. The circle that I’m talking about seems enthusiastic because the’ve made $150k in equity.
Well, guess what? Everything went so quickly that next thing we know, we already own 2 properties for $850k. Now selling between $960-1mil
Yes, I know you’re probably saying - why did you do that? don’t worry - we’ve asked the same question. Anyway, our plan was to flip or lease/option. There was no down payment on these properties so we were confident at first. After closing, we posted the property right away but because it was getting close to the holidays - we didn’t get an offer.
6 months of calling buyers and open houses - we were out of luck. luckily we had put $$ aside for an investment. we’re not rich but we were ready to invest. This property’s monthly rent is too high so it’s really tough to rent.
One of the investors told us not to pay the tax because we should only pay that when we sold the house…is that right?
I don’t know who to believe anymore but I hope there are people out there who can help us and at the same time to those of you who are reading this - beware! It’s so hard to trust people and i wish this thing has never happened to us and I hope it won’t happen again to anyone.
It’s tough getting this info out. I appreciate any advice before we file bankcruptcy.
First of all when you become an investor you become the center of the universe and what you think counts, if someone is selling me something everything they say and do is suspect, investigate, investigate. If anyone says a property will be worth __ dollars in __ time have them put it in writing with no disclaimers, California courts have upheld such statements and one broker I know who such a statement in front of witnesses had to payout $75k, her “puffery” defense didn’t work.
The California market hasn’t tanked yet so it looks like if you aggressively market the properties properly you may get out even money or with a manageable loss and with a lasting lesson learned so don’t even think bankruptcy. Also don’t use the realtor that was involved, find a new one and get involved in the marketing too. Maybe if you post the area this is happening in, someone may have some suggestions for you.
As for renting high priced properties in California it’s generally not a good idea, there is an old rule for my area that midpriced homes for a area will not rent for more then one-half of one percent of the market value which is a good rule to remember and the percentage of value you can get for rent will go up as you go down the price scale, and will go down as you go up the price scale. Of course always verify actual rents in the area and use the rule as a guideline. Over time you can refine the rule for your specific area.
I don’t know which tax you were told not to pay but if it is the property tax and you need that money to make a payment to the lender, then pay the property tax up to date in escrow. It takes five years for a property to get to a tax sale in California.
I will congradulate you for doing something, you just beat out 99% of the wannabee investors. Don’t let this stop you, in fact investing is the way to recoupe your losses if you suffer any, and California is a tough place to learn on the cheap, so go back to the drafting board and revise, and keep studying.
Thank you! Thank you for pointing out such positive notes on my problem. It made me smile…knowing maybe it’s not a mistake after all…just lack of knowledge.
The builder is selling the property for me and as for marketing, I will be (correct me if i’m wrong as I do welcome suggestions) advertising via newspaper fsbo, craigslist, flyers in the neighborhood. Please do let me know if this is not enough as I will definitely market more especially now that the weather is getting better.
The property is located in one of the gated luxury community in Vallejo. It is surrounded with growing businesses - shopping, dining…etc.
I thought of doing a lease option/sale. Any thoughts?
When I first decided to be an investor - I know I was ready! I know I can do it and be able to get out of the 9-5 job one day and beat the economy. I realized it doesnt take months or a year to succeed but it takes failures to lessons to knowledge to succeed.
Yes I’m familiar with Vallejo, I did some rehabs there and in Benica. I actually sold one by handing out flyers at the SF ferry terminal in Vallejo.
I don’t quite understand the statement the builder is selling the property for you, doesn’t he have his own unsold inventory to sell? Is it on the MLS, don’t miss the selling season, remember holding costs can cost you 1% a month.
I do have another suggestion for you, you said it is gated, is there a guard to hand out flyers for you to visitors(tell him reward if you get buyer this way) or is it a coded gate. Plus send chose your neighbor letter to the current residents. And how does your price compare to the builders inventory? I have another suggestion but I would reveal it to you offline because it is one of my trade secrets and I have to think about it. Last time I revealed something to someone I had 100 competitors doing and saying the same thing within a week and I had sellers asking me if some kind of clone group just graduated from somewhere.
As for the lease option I dont see how the numbers would work for this price range, especially with the market flattening out.