I just bought my first apartment building(8 units) very cheap.

Buying & Selling Real Estate
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I just bought my first apartment building(8 units) very cheap.

Account Closed
Bridgeport, CT · Member since 2017 · 19 posts · 8 votes

I just picked an 8 units aparment building for only 25k in cleveland. It needs quite some work but not too bad for me since I got a good reliable guy who will only charge me 5k to get it all rent ready. Any other company would ask me anywhere from 40k at least. It would be even less if I didnt ask him to add 1 more bedroom in all the units. Theyre all 1 bedroom now. I will just buy him the materials and he ll work. But, I plan to give him an extra 10k after I refinance this apartment in 1 year. No way would I just let him do all that work by himself for only 5k. And I need to add "no crappy work", this guy is a pro. I feel so lucky. The ARV is 170k. Its low because its a c class apartment. But, considering what I paid for it. This is a steal.

Wish me luck!

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James Wise
Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
8y
Originally posted by @Account Closed:

I just picked an 8 units aparment building for only 25k in cleveland. It needs quite some work but not too bad for me since I got a good reliable guy who will only charge me 5k to get it all rent ready. Any other company would ask me anywhere from 40k at least. It would be even less if I didnt ask him to add 1 more bedroom in all the units. Theyre all 1 bedroom now. I will just buy him the materials and he ll work. But, I plan to give him an extra 10k after I refinance this apartment in 1 year. No way would I just let him do all that work by himself for only 5k. And I need to add "no crappy work", this guy is a pro. I feel so lucky. The ARV is 170k. Its low because its a c class apartment. But, considering what I paid for it. This is a steal.

Wish me luck!

 lol, you bought an 8 unit apartment building for $25k & the guy you hired to "renovate" it is 6 times cheaper than everyone else.................What could possible go wrong here?

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  • Jeremy TaggartBusiness Member
    Real Estate Agent · Pittsburgh, PA · Member since 2014 · 850 posts · 646 votes
    8y

    @Account Closed he's charging you 5k to renovate the entire building?

    DHRE- The Jeremy Taggart Team590 Reviews
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    1Reply
  • Account Closed
    OP
    Bridgeport, CT · Member since 2017 · 19 posts · 8 votes
    8y

    @Jeremy Taggart, yep thats what I said. He wanted only 3k but when I asked him to add an additional bedroom in each unit, he said i have to give him 5k and i agreed. A very good man God sent my way. But, like I said I will not abuse him coz I know thats a 25k job at least. I sure will give him more cash when i refinance. Thats just me.

    0Reply
  • Caleb Heimsoth
    Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
    8y
    What are the rents? You’ve got an 8 unit apartment building That’s worth 170k when fully fixed. And you gave some guy 5k to fix it all? There’s something here that doesn’t add up. This would have to be in a total war zone
    6Reply
  • Account Closed
    OP
    Bridgeport, CT · Member since 2017 · 19 posts · 8 votes
    8y

    @Caleb Heimsoth Not at all bro. Its not a bad area but it certainly not a b, its a c. It used to rent for $475 1br but after I add this extra bedroom, it will easily rent for $600. This lady kept it for 5 years and she was about to renovate it and already started then decided to sell it. I grabbed it before someone did. Its all by the grace of God NOT a war zone.

    1Reply
  • Michael Swan
    Rental Property Investor · San Diego, CA · Member since 2014 · 1k+ posts · 2k+ votes
    8y

    Ok you got me.  What is the address and we will let you know the quality of the area etc...  Many of us on hear own upwards of 100 to 1000 front doors in the Cleveland area.  I own 8 apartment complexes and 4 single family out there and live in San Diego.

    Swanny

    2Reply
  • Thomas Hickey
    Real Estate Investor · Peabody, MA · Member since 2013 · 304 posts · 91 votes
    8y
    Those construction costs are impossibly low. He may be trying to get an up front deposit and ghost. Don't give him any money up front
    2Reply
  • Caleb Heimsoth
    Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
    8y
    If you say so but I’m with @michael swan. Give the address. What side of Cleveland is it on?
    0Reply
  • Brian Garlington
    Realtor · Oakland, CA and a Real Estate Investor with Multi-Family Units and a Self Storage Facility · Member since 2016 · 2k+ posts · 2k+ votes
    8y

    @Account Closed  This has got red flags written all over it.     Too many to list.  PLEASE don't give this person any money until you vet "him".   Not to throw shade on you but is this some sort of joke?  If you are hesitant to give people the address out loud then at least a street name or a zip code.    I only have 3 rentals in Cleveland myself but there are people on this forum that have many, many more than me that can save you a little heartache by giving you their expertise.

    1Reply
  • James Wise
    Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
    8y
    Originally posted by @Account Closed:

    I just picked an 8 units aparment building for only 25k in cleveland. It needs quite some work but not too bad for me since I got a good reliable guy who will only charge me 5k to get it all rent ready. Any other company would ask me anywhere from 40k at least. It would be even less if I didnt ask him to add 1 more bedroom in all the units. Theyre all 1 bedroom now. I will just buy him the materials and he ll work. But, I plan to give him an extra 10k after I refinance this apartment in 1 year. No way would I just let him do all that work by himself for only 5k. And I need to add "no crappy work", this guy is a pro. I feel so lucky. The ARV is 170k. Its low because its a c class apartment. But, considering what I paid for it. This is a steal.

    Wish me luck!

     lol, you bought an 8 unit apartment building for $25k & the guy you hired to "renovate" it is 6 times cheaper than everyone else.................What could possible go wrong here?

    7Reply
  • Caleb Heimsoth
    Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
    8y
    I sure hope this isn’t real because if you gave some guy 5k to rehab this you will likely be out that money
    0Reply
  • Account Closed
    CA · Member since 2016 · 145 posts · 53 votes
    8y

    @Account Closed

    please update in a few weeks with progress I'd like to know how this worked out for you.   If you wouldn't mind shooting me the address in a DM I'd appreciate it. 

    0Reply
  • Ryan Evans
    Rental Property Investor · Cleveland, OH · Member since 2016 · 653 posts · 769 votes
    8y

    Guys, I'll save everyone some time here. This poster is either full of it or just spamming the site. 

    For starters, there's no way this deal is legitimate. 

    Second, Lamy, you started a thread months ago about buying a 6 unit building and are now saying that this is your first apartment purchase. What's the deal here? 

    https://www.biggerpockets.com/forums/311/topics/48...

    And for the record, you posted about owning in east Cleveland, which most here would consider a war zone. 

    4Reply
  • Bob Prisco
    Specialist · Cleveland, OH · Member since 2018 · 1k+ posts · 666 votes
    8y

    There are simply no 8 units, heck not even 4 that you can buy for 25k that need only 5k  in work,  not even in the " hood " something is not making sense. Heck SF in good areas are 55k and higher.  I am an expert in the Cleveland markets, this is not possible. I just sold , 3 days ago, my 8 unit that will be fully rehabbed, sec 8 ready for 210k, with a 16% net cap, that is reality not 30k all in.  Do not pay that person, he will simply pocket the money and walk away. 

    0Reply
  • Bob Prisco
    Specialist · Cleveland, OH · Member since 2018 · 1k+ posts · 666 votes
    8y

    @Ryan Evans East Cleveland has its bad parts but also has its ok. I have an 81 unit on Terrance and a 24 unit on Coventry, not bad at all. But yes overall E Cleve, not great. Hey remember the days when all around the Clinic WAS a REAL war zone, now you cant find any bad props and good luck finding a good deal . People told me I was out of my mind, well, now ,....  All the best 

    2Reply
  • Account Closed
    OP
    Bridgeport, CT · Member since 2017 · 19 posts · 8 votes
    8y

    Guys, why would I lie about such a thing? I know its crazy but if u knew this guy, you wouldnt say all of these things. He s the kind of guy when he started working for u, no one can take him away from u. He s cheap and work everyday till he s done. He s done 2 atics for me before which bring me an addtional $1,000 in monthly income in 2 duplexes i own in e cleveland.

    I know and I know well that e cleveland got a bad name but u guys have no idea about the opportunities here in what u call the war zone. Ppl are calling everyday to rent in e cleveland--ppl gotta here somehow i guess. My tenants pay me well-- very low evictions and no vacancy for me. Very good cash flow on small investement. Yes, my apartment is in e cleveland but guess what? Theyre selling these 8 units for 200k here(check loopnet).

    After renovation, I will fill half of it up with section 8 tenants. I will not wait till its finish to start filling it up though. When its full, i will refinancing and take about 150k to buy other apartments in georgia or texas as down payment.

    Im so excited guys!!! E cleveland is working fine for me. Sometimes, i stay here for 2 months and i havent got shot yet. Very quiet area. If there are a lot of drugs here, then who cares if that doesnt affect u? No one has ever offered me drug here yet.

    1Reply
  • Bob Prisco
    Specialist · Cleveland, OH · Member since 2018 · 1k+ posts · 666 votes
    8y

    @Caleb Heimsoth  This post is just to grab attention and maybe build a buyers/ sellers list. This deal is not possible,, BTW, I just sold my 8 unit for 210k, in N Collinwood,  however it will be fully rehabbed and rents will be on avg 650, each,,,,, all the best 

    0Reply
  • Finny Chacko
    Investor · USA · Member since 2017 · 22 posts · 10 votes
    8y
    LOL, Looks like you don’t have any value to add in this community and don’t need anyone’s suggestions. You got a deal, good for you and stop bragging about it. Since you are not giving the address, I doubt you got any deal. Spend some time working on yourself and stop wasting others time.
    2Reply
  • Chinmay J.
    Investor · Northern, VA · Member since 2016 · 1k+ posts · 904 votes
    8y

    My offer to buy Trump Tower for $100K just got accepted. No repairs needed. Its turnkey. And they say the real estate is in prime location.  

    I think I got better deal than Lamy.... But his is nice too... Wish me luck..

    6Reply
  • Account Closed
    OP
    Bridgeport, CT · Member since 2017 · 19 posts · 8 votes
    8y

    @Finny Chacko Did my original post or any of my replies indicated that I was seeking advice? I said I already bought it and was happy with such a rare deal. If I was looking for advice, I would ask before I buy it. And, this is where we ask questions/seek advice but also share personal success stories. I didnt have to be seeking for any advice to share my success story here. No need to get jealous here bro. No place here for that. We cheer for each other here. We are all trying to get out of the rat race in America.

    0Reply
  • Account Closed
    OP
    Bridgeport, CT · Member since 2017 · 19 posts · 8 votes
    8y
    Originally posted by @Bob Prisco:

    @Ryan Evans East Cleveland has its bad parts but also has its ok. I have an 81 unit on Terrance and a 24 unit on Coventry, not bad at all. But yes overall E Cleve, not great. Hey remember the days when all around the Clinic WAS a REAL war zone, now you cant find any bad props and good luck finding a good deal . People told me I was out of my mind, well, now ,....  All the best 

     Thanks for sharing this. Like you, thats all I keep hearing in my ears but my success in e cleveland proved that all these ppl are liars. Im having success here in e cleveland. My apartment is in the best part of the e cleveland but the others are in the worst part which is ok to me. I make good cash flow here in the so called war zone.

    0Reply
  • Kristopher HanksPro Member
    Rental Property Investor · Davenport, FL · Member since 2016 · 593 posts · 382 votes
    8y

    @Account Closed Wrong date brother. April 1st is the correct date to post this. 

    2Reply
  • Bob Prisco
    Specialist · Cleveland, OH · Member since 2018 · 1k+ posts · 666 votes
    8y

    @Account Closed  I will pay you 100k as is if it really only needs 5k, ,and is really an 8 unit, heck 125k,  let me know, all I need is the address. You have my contact info, 

    thanks 

    0Reply
  • Michael DeVowe
    Hutchinson, MN · Member since 2018 · 38 posts · 14 votes
    8y

    You still haven't shared the address...

    0Reply
  • Jack P.
    Columbus, GA · Member since 2017 · 88 posts · 115 votes
    8y

    So as I grab my popcorn...

    Keeping in mind that this is purely for entertainment value, lets analyze the veracity of his claim:

    -$25k on an 8-unit.  

    -Turning 1 bd. into 2 bd. units

    -$5k total labor costs.

    -undisclosed material costs.

    First, the labor.  The dude is rehabing 8 units for $5k.  I thought to myself a scenario where this might be possible, and it may not be too far off.  

    -Find a guy who has some construction/handyman experience, isn't licensed, and doesn't have another job.  Maybe he's a felon and can't find work, or an undocumented worker.  Either way, he's willing to work for cash under the table.  I'd value his labor at $800/wk.  He's not paying taxes, FICA, SS, etc, so he's happy with this wage.  

    -Under that assumption, I would have about 3 days per unit (5 weeks) to complete the job within budget.  What can I do in 3 days? probably patch all drywall, paint, clean, maybe some other basic things like replace electrical outlets or basic plumbing.

    The value-add two bedroom:

    -assume again that the current 1 bedrooms are 12x16.  Put a wall up and split the room in half to make two 8x12 rooms.  Keeping in mind that my laborer probably only has 1 day to complete the job, it's probably not going to be the greatest-looking thing, non-textured, funny doorway (i.e. a sheet), but ostensibly it's another room.  

    Undisclosed material costs:

    -since he didn't specify, there's a blank check for materials.  So I'll assume that he spends out the a$$ on fixtures and appliances to compensate for the shoddy paint job, bedroom partition, old flooring, and other common area drawbacks of the apartment.

    Conclusion:

    While it's nowhere near legal, within code, permitted correctly, it may just be possible to rehab 8 units for $5k + materials.  I guess you have to cut corners somehow.  Plus, you have to work through the problem of the refi when the appraiser walks through and realizes what happened to this place, then alerts the county.  

    1Reply
  • Ryan Evans
    Rental Property Investor · Cleveland, OH · Member since 2016 · 653 posts · 769 votes
    8y

    I'm not even sure what's going on here anymore :0 

    0Reply
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