All Forum Posts by: Allison Adams

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $155,000
Cash invested: $6,500

I bought a SFH to live in. Then converted it into furnished housing for traveling professionals. I net approximately $300 a month (bills vary), and my cash on cash return is 55%.

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

I wanted to provide housing for traveling professionals. Providing furnished housing with paid utilities allows me to charge more rent. Additionally, since turnover is higher than long term tenants I assume more risk, which is also translated into higher rent. Given the location of my market, it was not suitable for Airbnb or vacation rentals. However, the location did make ideal for traveling professionals.

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

This property was located down the road from my duplex. It was previously a fix and flip; I bought it after the flip was completed.

How did you finance this deal?

I financed this deal with my own savings.

How did you add value to the deal?

I added value by providing safe, affordable, and comfortable housing to traveling professionals. Mainly those who work at hospitals.

Lessons learned? Challenges?

I definitely should have hired a real estate photographer for marketing. The first thing my tenant said when walking through the door was, "Oh this is way better than the pictures.". The challenge moving forward will be the management for the property. Since it is a short-term rental, more effort will have to be put into finding tenants. At this time this property is self-managed, but I would prefer to move to a more passive option.

@Jonathan Giglio

I ran into similar problems regarding multi-family in St Louis. Everything is overpriced and I can’t compete with the larger companies making all cash offers 10k over asking. So I’m switching up my strategy to Single Family Homes for the time being. My plan is to buy at least one a year and house hack. After 5 years I hope to be in a position to use a cash-out refi and begin trading up to multi-family.

@Allison Adams I forgot to mention I used an FHA loan. Perfect for first time buyers. Down payment is 3.5%, and you need a credit score minimum of 580.

@Cesar Gomez Though 5k isn’t quite enough to buy a turnkey rental, you don’t have to save up too much more. I bought a duplex in June to house hack. Between my renter’s and roommates payments I do not have to pay the mortgage out of my own pocket. All I have to pay is utility bills. I acquired my property for 173k in St. Louis, and I only paid $14,400 out of pocket. This included the inspections ($800), down payment (6.8k), and closing costs (6.8k). That left me with 6k leftover from my original 20k I had budgeted.

I thought about replacing it with french doors. It's a wider door that leads from living room to bedroom. I would rather get it fixed because all of my prospective tenants love the idea of having one.

I know! They're awful! My thought is try to repair it or maybe install french doors.

Does anyone know of a good contractor in the Stl-South area who specializes in pocket doors? One of my units has a rather large door that came off it's hinges. 

Thank you!

Investment Info:

Small multi-family (2-4 units) other investment in Saint Louis.

Purchase price: $173,000
Cash invested: $12,000

I bought a small multi-family home (2 units) in South St. Louis. I am living in half of it with a roommate, while renting the other half. Although this situation is causing be to barely break even, I am still living at no expense to myself. Once I move out and rent the other unit, it will be a positive cash-flowing property.

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

I've always been interested in creative finance and house hacking. I graduated college a year ago, and had $50 to my name with no debt (thank you Mom and Dad). After a year of saving 50% of my paycheck, I was enthusiastic about starting to invest and grow my money.

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

I found Dahila using Zillow. Due to my inexperience and a new location, I needed someone who knew the area. I shopped around for Agents and found one who had 10 years of local experience. He was able to point out foundation issues, old furnaces, mold and other concerns I was unaware how to identify. He was also able to refer me to a lender who specialized in FHA loans.

How did you finance this deal?

I used an FHA loan with the minimum downpayment of 3%. With closing costs, the total comes out to 12k, which leaves me 8k to update the kitchen and bathroom of the second unit before I rent it out.
Due to Covid19, the FHA 203k loans were put on suspension. That loan was my first choice, and because it wasn't available to me I wasn't able to do as much rehab as I would have liked.

How did you add value to the deal?

There wasn't much value I could add in this particular deal. This was a huge learning curve for me. However, I am building relationships with my agent and lender. I told them both I plan on buying more in the future and plan on working with them again (they were amazing). In order to cultivate our relationship, I'm considering taking them up flying (I am a pilot) to look at some of their real estate from above.

Lessons learned? Challenges?

Don't move in with your boyfriend in a city you're unfamiliar with. I feel like this is a given, but at the time I thought it was the right decision. That being said, I may have rushed through the process a little because I need a place to live. And although the numbers do work out for this property, I feel as though I could have done better. Next time, I plan on giving myself more time on a deal.

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

Chris Rosenhaler is an amazing agent who is very knowledgeable about the area he works in. He is an excel wizard and has a spreadsheet to keep track of all his deals. He's very organized and will let you know what he needs from you. Chris also has a tremendous amount of patience when I ask him loads of questions. I would without a doubt recommend working with Chris.