All Forum Posts by: Alex Smith

Hi!

We currently have 9 units and thus far have done all of the renovating ourselves, however, what we hope to be our next project is a little too big for us to take on ourselves. The building is essentially a shell, down to the studs and will be 4 units when completed. It needs everything including exterior work, plumbing and electrical. Has anyone worked with any contractors in the South Jersey area on a project this big? Trying to find someone to walk the property with us and give us some rehab numbers...

Any guidance is much appreciated!

Thanks, 

Alex

 Hey Jake! It came in lower than expected, but I believe it's because of my area. There aren't many duplexes and the ones that are in town have been owned by the same people for years. The appraiser said as he was walking through that there "weren't many comps" and in that moment I knew my appraisal was going to come back under-valued. I was disappointed, but it didn't really matter too much. At least it doesn't right now. I wasn't planning to leverage the property or anything, I was just curious. 

Hey hey!

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $55,000
Cash invested: $15,000

Contributors:
Dawn Curry

Made settlement yesterday on our 6th unit! it’s a 3 bed, 2 bath single family home. We bought this one with a construction loan. We put 25% down on the purchase price (55,000) and were able to incorporate almost 20,000 in the loan that we will take out in draws for the renovation. When Reno is complete, it’ll be rolled over into a conventional loan totaling $61,000. Getting in and out of this one quickly because we already have a tenant lined up to move in November 15th :)

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

One of our current tenants who we really didn’t want to lose was looking for a 3 bed. We didn’t have any 3 bedrooms available so we started searching for one for him. This one popped up in the neighborhood I grew up in.

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

MLS....family friend owned it.

How did you finance this deal?

Construction loan. Will roll into conventional. Used Business line of credit to fund down payment. Previous deal was done with cash and when we complete cash out refinance we will take out a little extra to pay back the business line of credit.

How did you add value to the deal?

Solid house in need of some updating. We got a great deal on it considering the situation and relationship with seller. Plans are to just do cosmetic updates inside...paint, carpet...that sorta thing. Also replacing roof and converting heat to gas.

What was the outcome?

Just getting started but should have tenant in there in the next month and property should cashflow $250-$300/month which fits our criteria.

Lessons learned? Challenges?

Almost overlooked this one because it isn’t our typical buy. Taught me to always run the numbers. Doesn’t take long and could end up being a great deal. If it doesn’t end up being a deal that fits our criteria, then that’s fine...always something to learn.

@Bruce Lynn it’s weird because the old owner is a company...

Hi BP!

We put an offer in on a cheap house nearby that we were surprised hadn't sold yet, but we just figured maybe it didn't sell because there were no pictures online and it looks pretty bad from the outside. We went through, were happy with what we saw, but decided to offer $10,000 less than asking. Low and behold, it looks like they are accepting our offer, however, this was the response.....

"Seller acquired this property through a tax lien foreclosure Property is vacant but old owner can, if they make an application to the courts, try to redeem property for up to 1 year from when my client took title. Which was on 7-2-19. Therefore when your buyer closes there will be an exception in title that will expire 1 year from above date. Keep in mind that the old owner will have to prove hardship which will be difficult since they have abandoned the house. Please advise that your client understands and they are willing to move forward"

I somewhat understand, but then again I don't. If we were to purchase this house, would it be too much of a risk to begin renovations and place a tenant? Would it be a situation where we would just hold it until next July and then begin renovations? Have you ever been involved in a situation like this? What would you do...assume the risk? Or say ..."nahhh, not worth it."

Any guidance would be greatly appreciated!

Hi everyone! Do you think I can get away with a "basic peril" policy rather than a broad peril policy? Almost everything is new now.....thoughts?

@Kenneth Mims when purchasing the property it was only considered a 1,000 sqft property. There was an attached garage...it looked like a garage without actual garage doors...we finished that off and thats where we added the 2 bedrooms.

@Jaron Walling We bought it on May 29, 2019, so we have owned it for almost 4 months. It's been rented for a month ($1,500/month). It'll probably appraise for 140,000, but I'm looking to cash out about 85-90,000. 

Good Morning BP!

So I previously posted about our recent rental that we bought and rehabbed with cash. We found a lender that we planned to refinance with in 6 months, but on that thread where I previously posted about this property, someone recommended setting up the refinance so we can settle in exactly 6 months. I asked my lender about it and he said that the application process can't even begin for 6 months. 

Any lenders out there that would consider a cash out refinance in less than 6 months or that would consider starting the application process now so that we are able to settle in 6 months ( last week of November/first week of December)?

Thanks!