Buy and Hold Deal with a Bigger Pockets Client, Partner and Friend.

[Humberto Valle]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $100,000
Cash invested: $60,000

I partnered with a BP member on this deal, Mike. I was able to negotiate the purchase of this property down from $150k against other investors. Home is rather large, in a corner lot and with an RV gate. The original plan was to split the home and do a dual rental where one portion would be an Airbnb and the other a regular LTR, but after completing the rehab we decided to have it fully as an LTR.

What made you interested in investing in this type of deal?

The equity potential of course, but mainly I was trying to solve two issues - on one end, the seller was struggling financially and needed to sell her home but investors were aggressively trying to take advantage. So I wanted to protect them, while on the other hand finding ways to creatively maximize their take home while keeping our risks low due to the potential upside of the deal.
Home had new AC, decent roof and large home and lot - besides that we had to gut a lot and throw down some wall

How did you find this deal and how did you negotiate it?

Came across my desk and I negotiated it the same I negotiate for my occupying buyers, investor buyers and even how I protect the equity of my homeowner sellers when representing the selling side. I'm locally known to negotiate like there's no tomorrow when given the opportunity. We financed the purchase through a local and trusted HML and partner, now friend and business associate, Mike, funded the bulk of the rehab.

How did you finance this deal?

This investment property was financed through a locally trusted and long time friend that's a hard money lender with an 8.5% rate .
I acted as negotiator, real estate agent, funded the purchase, and project manager for this rehab while partner was out of town working and kept him updated remotely.

How did you add value to the deal?

I negotiated the initial deal, brought it to a Bigger Pockets investor and then once we closed on it, I did all the project management and coordinated with the contractors as much as possible enabling partner to travel and be as remotely as needed. Once completed I then sourced the tenant and secured terms on that as well.

What was the outcome?

A beautiful long term property with an increasing equity in a nice neighborhood with tons of rental potential and or good opportunity for selling due to aesthetics and location.
The current value range is $210,000 to $229,000 and through its current rental term, it cashflows about $250 per month. I now deal with tenant repairs, and vendors.

Lessons learned? Challenges?

There were learning curves as always working with a new partner, we may have over rehabbed a bit but other than the deal and work went rather smoothly. We got hit with some covid related delays sourcing some materials but other than it was great!

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

No, just dealt with my partner, contractors, electricians, roofers, etc.