All Forum Posts by: Aaron Steeves

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $92,500
Cash invested: $65,000
Sale price: $255,000

Single Family Fix & Flip. 1218 SF, new aesthetics throughout, added a bath, cleanup. We hit the market just right with this on the purchase. The challenge with this property was the commercial zoning and the fact that it was abandoned and lost its grandfathered status. Once we overcame the ZBA challenges, this was an excellent project!

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

This was a bread and butter flip, but while everyone was running away going into Covid, we saw a major opportunity that paid off.

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

This was brought to us by a local agent. I made an offer based on ARV-cost of const-profit = MAO.

How did you finance this deal?

Cash

How did you add value to the deal?

New finishes throughout, added a bath

What was the outcome?

The market took OFF during Covid and we far exceeded initial ARV calcs

Lessons learned? Challenges?

First experience with a special permit for commercial zoning. We learned a lot about dealing with the ZBA on these issues. The major lesson is being thorough, open and honest goes a long way.

@Andrew Postell - super interesting post! Thanks! I've already bought all cash without the LLC, so I think I'll be stuck with the 6-month waiting period in this one. I will definitely consider that going forward though!

Some questions:

1. How much are you paying to create the LLC? Are you having your lawyer do it or are you filing yourself?

2. Once you refinance, do you transfer the deed back to the LLC and hold as such once it's fully refinanced and rented?

3. Thus far I have only found banks willing to cash me out at 70% ARV/appraised value. Do you know of any you can recommend that would be willing to do 75%? 70% is probably fine...but for good measure I would like to have the contacts if I decided to go 75%.

Thanks again!

@Jaysen Medhurst thanks. The property is in Fitchburg MA.

I am in the process of rehabbing a home in MA. Once I am complete, I am looking for a lender who will do 75% LTV on ARV (I bought the property 100% cash and I close May 15th). Does anyone have any recommendations on which banks or lenders do this type of deal?

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $108,000
Cash invested: $142,500
Sale price: $142,500

Buy & hold ~$700/month profit over four years

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

I was into buy/hold at the time, I owned the property next door and I got a good deal.

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

I owned the house next door

How did you finance this deal?

Investment loan

How did you add value to the deal?

Rehabbing 2 apts

What was the outcome?

Solid rental income and reasonable profit at sale

Lessons learned? Challenges?

Try to buy in areas you would live in yourself. Get competent property managers. File all court documents ASAP and play by the book.

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Fitchburg.

Purchase price: $180,000
Cash invested: $5,000
Sale price: $245,000

108 Daniels was originally intended to be a buy and hold, however we were made an offer we could't refuse by an investor in an adjacent house. During the hold period, we were netting around $900/month with minimal income, and we sold the property for a roughly $60,000 profit on top of that.

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

Great condition, larger 1st floor storage.

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

This was a word of mouth off market sale

How did you finance this deal?

Wells Fargo investment mortgage

How did you add value to the deal?

Very small repairs, we profited basically just because there was a rapid increase in the market.

What was the outcome?

$60K profit + 2 years of rental income averaging $900/month

Lessons learned? Challenges?

Sometimes you just get lucky

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

No

Investment Info:

Small multi-family (2-4 units) fix & flip investment in Fitchburg.

Purchase price: $105,000
Cash invested: $90,000
Sale price: $246,500

28 Phillips was a 2/1 that we converted to a 3/2. The property was beautiful, but it suffered a bit due to regression, the fact that it was located on a hill, and that the bedrooms were a bit small after dividing one to make it a 3/2. In the end, we sold the property and profited roughly $50,000. The flip should have gone quicker, but there was a manpower shortage and I was out of state. Luckily, the deal was cash, so we were not paying mortgage expenses or interest during the added downtime.

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

The low cost of the home compared to comparable sales in the area.

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

At the time, I was not yet an agent myself, and we used a local go-to agent. The property was bank owned and vacant, and the bank accepted our first offer.

How did you finance this deal?

Cash

How did you add value to the deal?

New kitchen, added 1B/1B, new roof and new interior finishes.

What was the outcome?

~50K profit

Lessons learned? Challenges?

Pay experts for their expertise ALWAYS
Only invest to the point of diminishing returns (i.e. do not put in a fancier kitchen than comps in the neighborhood
People are more scared of hills than they logically should be
Bedrooms should be >/= 15x15.

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

Giovanna Graves was my local agent

I am looking for advice on lead generation platforms for the Bay Area (or in general) that people can recommend. I am trying to build my database of leads for folks looking to buy new homes, and I would love to hear what the Bigger Pockets community of Realtors/Agents are using. Thanks!

@Dave P. - thanks for reading! More to follow, I just started filling this out. Now that I see people are actually reading it, I will try to get around to writing about the rest of my real estate adventures!

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Fitchburg.

Purchase price: $55,000
Cash invested: $120,000
Sale price: $245,000

151 Mechanic Street was the second investment property we bought. This was roughly one-year after I purchased my first 3-family at 86 Cleghorn Street, Fitchburg. We bought the house for $55,000 as a four family, expecting to have to do minor renovations....we were newbies! Low and behold, when we started chasing wires, we found orange home depot extension cords connecting the electrical panel to outlets. It was a COMPLETE GUT. I started the project prior to having my CSL...good idea? Nope. We dealt with the building department, the health department, architects, engineers, the court system, and everything in between before it was over. The building dept even shut us down because we didn't have a licensed GC...so I had to STOP WORK, study and get my license! We budgeted $10,000 for paint and cabinets planning to fix and hold the rentals, and ended up spending $120,000 over 2 years! We learned every real estate lesson the hard way on this one...

The good news: We were eventually able to refinance and pull all our initial investment back out. In 2018, after several years of rental income, we also sold the property and profited nearly $70,000.00. In the end, it was a great investment -- and we learned a ton.

That is 151 Mechanic in a nutshell, if you want a good nightmare story, get in touch with me!