All Forum Posts by: Aksel A.

Welcome to the Club @Jeff Brower

For what it is, it's a generic folklore estimate that's fun to look at. However, it can't be taken seriously by investors since it is grossly inaccurate, even more on non-single families.

For my multifamilies in the Boston area, it is off by over 50%.

Greetings,

I am interested in a multi-leg deal in Holliston, MA. MLS# 72292342

This is a single family rehab deal on an 8 acre property. The gentleman who landed the deal got the property under contract under his family LLC, and he is looking for a partner to complete the downpayment funding.

The 8 acre land is open to a big subdivision potential. The best case would be to divide the lot in 3, rehab the property and sell on its land, and then we can either sell the 2 other lots separately, or build on them and then sell the finished product.

The surveyor company, GLM Engineering Consultants, threw a bid for 30K. We have decent reasons to believe the subdivision strategy will succeed. If not dividing in 3, then at least in 2.

Current numbers:

- Expected purchase price: $385K

- Downpayment: 10%

- 100% Rehab cost financing

- Contractor bid: between 60K to 100K (30K + between 30K to 70K to fix the failed septic)

- Surveyors cost: 30K

There are 2 main issues:

- Deal structure: The property would fall under his family LLC, so we need to adjust the right legal structuring and contracting framework for me to enter as a foreign equity investor.

- Failed septic: At this time, it appears that the contractor is not seasoned of septic issues, and we do not quite have a good idea of the failure details.

Therefore, in addition to the whole subdivision ballgame, both issues above are fairly new to our ventures, so this will be interesting. Comments are appreciated.

Thanks

No answer here, so that seems to confirm the above (cannot get the 3 parties around the same closing table).

Now, to be creative, what if we come up with a mix of SellerFinancing and SubjectTo here:

- Rehab/Fix/Get tenants

- Refinance the short into longer term

- SellerFinancing/SubjectTo deal with a 3rd party.

- One time downpayment is paid to me (let's say 20% of the ARV).

  - Monthly payments (refinanced mortgage) paid to the bank.

  - Title held under my name

- Refinance again and transfer title to the 3rd party after a certain period (few months or years?)

If anyone has experience with this situation or can connect me with a renowned firm that deals with these, thanks for contacting me.

Thanks @Account Closed  

You inferring a 2-step process, which comes with a minor risk, and that's fine. This may or may not pass muster in our case.

Which, jumping to conclusion, implies that there is no standard way of "transferring" the loan directly, in order, having the 3 of us (me, buyer, bank) sitting at the same closing table and performing 1 atomic transaction. Correct?

@David Archer as you know, you can always move out of the property after 1 year and get it to fully cashflow with 2 rented units.

You haven't mentioned what your source of financing would be, hence this may or may not be financially feasible. I recommend trying as much as possible to:

- If you can afford it, get a 3 or 4 unit property instead of a Duplex. If you plan to use FHA loan, it will be MUCH easier to get a 2nd loan approved in the future when going from 3 or 4 unit to moving into a Duplex, as opposed to going from a Duplex to a Trip/Quadplex.

- Unless you find an amazing turnkey multi-family deal, capitalize on forced appreciation. The 203K loan can help with financing the rehab portion of the loan. If you're going to be house-hacking, and if you plan to manage it yourself, which you should, then you'd better know a thing or 2 about basic property maintenance. A Multifamily requiring minor to medium upgrades is a great way to get your feet wet and to build equity off the bat.

- Think big! You are going to face all the delights of both property ownership and landlording anyways. Therefore, as house hacker, you go all in. A few other tenants living within your space will barely cause extra headaches, but the cashflow difference is more than worth it.

Greetings,

This case may possibly be one of those classics, but doesn't seem to come as common, so I'm asking for posterity:

- I have an ongoing flip in terminal stages backed by an 80% rehab interest-only loan due in 3 months. The lender is able to execute to a long-term buy&hold refinance. I initially wanted to buy&hold, but now I just want to sell in order to jump to another potential deal.

- I have an interested buyer/investor interested in the property, but looking for an owner-financing deal and 20% down. His exit strategy is longer-term buy&hold.

The goal is to structure a deal where we perform owner financing on a property that has a backing mortgage.

I haven't talked to the lender about it, but was curious about whether, in this case, that was even possible.

I believe our vibrant community here can provide useful perspectives, and thanks in advance

Thanks @Charlie MacPhersonI noticed how my previous filter started to gradually show fewer properties as months went by.

Just to add some color for new investors: breaking even while occupying a property is a good house-hacking target goal. After vacating our Unit, projections are targetting a little over $1K/monthly cashflow.

Anyways, we are not ready to sell at this stage. Let's first see how the City Point Capital development project does http://www.bldup.com/projects/18-ericsson-street

We never invest primarily for appreciation, but in this case, the metrics appear to be in our favor, so we'll hang on.

As far as investing, you are right that the seller's market is very strong and we don't foresee any significant upcoming correction inside the competitive 495 belt. I have many friends looking to invest and partner, but we are consistently faced with prohibitive entries and less-than-ideal cash-on-cash returns here. Unless we happen to hit a motivated lead, we will move on to looking elsewhere or in other neighboring states RI, NH, ME.

Closing the loop on this rehab:

I am sharing a few past pictures of what a reasonably scoped rehab on a controlled budget on a 120 years old property looks like. It does not include several rooms and areas, but we get a good general picture.

As you may expect, the ups and downs encountered during this rehab are full of interesting surprises, and easily warrant an educational book on its own regarding what to do and what not to do. Let's humoristically call it "How to effectively graduate from the School of Hard Knocks University: the soft and hard tracks".

Some numbers (rounded):

All rents combined, the property is operating at $5000

Mortgage/PITI: $4500

Common utilities all paid by owner (single electric and gas meters on the entire property): $500

Conclusion: as a result of his ongoing house-hack experiment, the income matches the expenses.

Milestone complete. Time to take it to the next level.

Thanks everyone.

I need to gracefully restore the window exterior protective framing 

art (for a lack of better term) in the picture.

They are quite old (120 years), so at this point, I can try to:

- Salvage whatever possible, with a mix of scraping, painting and hacking

- Completely replace with brand new

Can you please provide references for similar window part frame parts at reasonable rates in New England? Appreciated.