All Forum Posts by: Anne Keenan

Just made an offer with owner financing on a duplex (not a legal one). Didn't like how the inspection came back so I backed off. Looking for more to buy. Lots of opportunity out there with more to come as the market tanks. Golden Handcuffs are slowing the drop but MF is falling for the first time in 34 years or more. Those are continuing to drop so more opportunity for owner financing will become available.

Investment Info:

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

Purchase price: $385,000
Cash invested: $115,000

2 duplexes on one lot. 2 BR/ 1.5 bath units. built 1989. Stucco outside only 6 years old. Roof 3 years old. Windows shot- White couldn't see out them. Great desirable location.

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

Did a 1031 and need a property fast. This fit the bill. See 7th property for more info. Bought together.

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

Drove by it a lot and called the seller.

How did you finance this deal?

Conventional bank financing 1031 tax deferred exchange.

How did you add value to the deal?

Took out the half baths and added laundry. Tenants all stayed even though I shifted W/S to then and raised rents $200. Really hated lugging their laundry half an acre to a coin op laundry in another building. Changed out the windows. Didn't replace them just the panes. IT A LOT CHEAPER. $40K to replace. $9K to just do the panes. Put in Low E-glass Thermal panes. Tenants utilities a lot lower. Added solar screens and outdoor patios and all the safety items mentioned in deal 7.

What was the outcome?

Better quality tenants when you have laundry in the unit. They also stay longer. Rents have nearly tripled since 2018.

Lessons learned? Challenges?

Covid messed up obtaining need materials for renovations- Like Tubs! Keeping relationship with tenants is key. They all paid thru Covid- Early even.

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

Yes myself. Licensed since agent was not reliable.

Investment Info:

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

Purchase price: $400,000
Cash invested: $115,000

4 unit owned by a 76 year old man who didn't have the energy to care for it. Rented to anyone who came along so was evicting monthly. Place was neglected and unsafe (in my opinion). Stucco siding was only 6 years old and roof 2-3 years old. Exterior in good shape. Electric heat. Separately metered including W/S. Owner was paying Water/Sewer .

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

I was doing a 1031 Tax deferred exchange and had 45 days to find something to buy. There were only 3 MF properties on the market and I made offers on all of them. They all failed on structural grounds. I saw these for several years - not on the market. I called the owner and asked if he wanted to sell. He said yes but jacked the price for this 4 unit plus the one that abuts it $100K per building. At the time it was overly high for the market but I felt I could get them to cashflow in 2 yrs.

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

I drove by them alot. Used the realtor from my previous deal and she turned out to be dishonest. Both seller and we were NOT happy with her double dealing and lying. We ended up getting one property for $385K because it came in at that price. The Seller was angry.

How did you finance this deal?

Bank Financing 25% down.

How did you add value to the deal?

shifted water/sewer to tenants in 1st 30 days. Then raised rents $200 the following month. Tenants were angry until we told them how we would improve things. 2 eventually left. 1 Moved out of state the other we did not renew their lease. Rents are now $1400-$1600 with many improvement including new bathrooms, windows, flooring, appliances and energy efficiency items added.

What was the outcome?

Stable happy tenants that refer friends and family to us. They don't want to move.

Lessons learned? Challenges?

Low E-Glass windows make a huge difference in Tenants utility bills. Solar screens too. Making tenants feel safe (motion detector lights, fire ext in unit, peep holes in door, smoke detectors with battery back up in all BR's and hallway, renovated baths, extra storage and off street parking all help tenants feel cared for, safe and secure.)

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

Myself now. I got my license after the agent was so bad.

Investment Info:

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

Purchase price: $190,000
Cash invested: $45,000

4 unit with out of town landlord being mismanaged by property management company. 2 BR/1Ba units w/ 1 car garages. All utilities separately metered. Stucco siding, Aluminum windows. Built 1992.

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

It was the bottom of the 2007/8 crash for MF. Property had been on the market for a year for $240K. I low balled the offer at $190K and the seller said yes "as is". I took the deal. With rents being only $2000 a month total income it didn't cashflow well so I made an offer in which it would.

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

Realtor showed it to me. I told her what to offer. She did as I asked.

How did you finance this deal?

Conventional 20% down could have been 25% can't really remember.

How did you add value to the deal?

Renovated each unit and shifted all utilities to the tenants including water & sewer. It's on a cul-de-sac so I fixed up the yard, painted the outside and tiled the floors in the units as they became vacant. Painted the insides and upgraded the countertops or recovered them. Everything that can be is Natural Gas and the lights are all LED. Motion detector lights outside make everything safe for tenants coming home and lower my risk. Fire Ext in each unit and garage do the same.

What was the outcome?

Rents are now $1500-$1800 per unit. Long term stable tenants. Low utilities.

Lessons learned? Challenges?

Property management companies do some appalling things to cover up what they don't want to fix. Fix things right and permanently the first time and I won't have to do it again. Find single or two man shops to do work like Elec, Plumb, Paint, flooring. Their overhead is less so they charge less and still do a great job. Develop relationships with these people. Let them know you'll use them over and over- develop loyalty. Pay them immediately.

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

Yes- I went and got my license in AZ after she proved to be not reputable.

Investment Info:

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

Purchase price: $159,000
Cash invested: $150,000
Sale price: $365,000

This was a duplex with 5 BR 2 Bath on one side and 2 Br 1 Bath on the other. It was a hillside walkout. I renovated the downstairs and added 4 bedrooms and another bath, FR and Laundry. So now I had a 6 BR/ 2 BA and 5BR/ 2 BA. Home was built in 1959. Separately metered for all utilities.

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

Huge opportunity for Value add. We had tons of refugees coming in from Africa with 7-10 kids and no where for large families to rent. So I created apts for them to rent. The rents were high and long term section 8 tenants. I also saw the lot was huge for the area and that I could subdivide a lot off and sell that too without changing the value of the property. So I did that.

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

in MLS. I negotiated it. I went in on it with a partner.

How did you finance this deal?

Bank conventional with construction loan

How did you add value to the deal?

Added 4 Br and a bath

What was the outcome?

Got super high rents for 10 years.

Lessons learned? Challenges?

Construction costs more than you think it will. Takes longer than you think it will and contractors will bail without notice or not finish their job. Cities permitting process can be difficult. Make friends with the people in Zoning and code enforcement. Pick peoples brains.
Be inquisitive and polite and thankful.

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

Myself. Recommend today Brian Armstrong Keller Williams in S. Burlington, Vt. 802-488-3494.

Investment Info:

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

Purchase price: $215,000
Cash invested: $18,000
Sale price: $500,000

5 unit never been on the market. Bought from the Grandson of the man who built it in 1930. Top floor not rentable due to second egress needed but not cost effective to put in.

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

He came to me and offered me owner financing. He had just inherited it a year ago and didn't like being a landlord.

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

Owner approached me. I was going to Essex Rental to rent equipment to teach myself how to do renovations- I had no money to hire anyone. after 10 months of lessons from the guys there I developed relationships with them. He wanted me to have his families property.

How did you finance this deal?

Owner financing.

How did you add value to the deal?

I turned the 3rd floor into one unit making the stair issue a non concern and creating a 4 BR 2 Bath unit that had high rent. Improved all the units. They were separately metered. Vinyl sided the outside. I want maintenance free siding. Put new baths in, new windows, weatherized it. Low utilities means tenants will stay.

What was the outcome?

Rents increase. Sold it 7 years later for $500K

Lessons learned? Challenges?

Lead Paint! Encase it or remove it wood and all. This property had massive lead paint on the exterior siding. I encased it in vinyl siding to make it safe. Replaced the wood casement windows with vinyl clad, thermal pane, low-e glass windows which eliminated alot of the lead risk.

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

myself. I would recommend today Brian Armstrong Keller Williams S Burlington Vt.

Investment Info:

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

Purchase price: $164,000
Cash invested: $18,000
Sale price: $500,000

4 unit with 3 BR 1 Bath, separately metered utilities. Came with deed beach rights on Lake Champlain. Owned by a realtor who was mismanaging the property and just wanted out. Went in with friends on this one. built in 1928.

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

It was being mismanaged so I saw the opportunity for value add and shifting the utilities to the tenants. I like that the units were 3 BR so I could have higher rents and lower expenses.

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

I was in MLS. I offered full price because it was under priced she literally just wanted to dump it.

How did you finance this deal?

10% down conventional. Back in 2000 all you had to do was declare your gross income- which in rental property is significantly higher than net.

How did you add value to the deal?

Shifted all utilities to tenants including water and sewer. Raised rent. Rented to Section 8 tenants so 80-90% of rent was direct deposited into my account on the 1st of each month. Guaranteed I could pay the mortgage while I learned what it was to be a landlord. Got the tenants to sign up for weatherization and got the building fixed up for very little out of pocket.

What was the outcome?

I cashed out refied 3 years later and pulled $100K out and sent $50 K to my partners. They were then able to buy their first home. Sold it 4 years after than for $500K.

Lessons learned? Challenges?

Inspections don't show how may roofs there really are. Sign a contract with the roofer that is binding. Iraq war hit and plywood went from $11 a sheet to $35 in a day. The roofer had already agreed to install 95 sheets @$35 a sheet on 2 roofs. He lost money because the cost of the sheets had skyrocketed but he had to keep the price in the contracts. He also estimated 2 roof layers and accounted for 3 ton of waste to haul away. 4 roofs later it was 12 ton he hauled away.

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

Myself. I recommend today Brian Armstrong of Keller Williams in S. Burlington, Vt. He has many rental apts he owns and is a very effective professional.

Investment Info:

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

Purchase price: $174,000
Cash invested: $20,000
Sale price: $500,000

4 unit with 3 2 BR/1Ba and 1 3 BR 2/Ba. built in 1926.

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

Owner financing with only 10% down. Then easily flipped it to bank financing after improvements.

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

I was a realtor and had this for sale. No one would buy it even though it cash flowed $1700 a month. So I bought it.

How did you finance this deal?

Owner then bank

How did you add value to the deal?

Improved the units. Rented to Section 8 tenants. Had them apply for Weatherization. Got free weatherization for the building about $30K worth. Had to keep tenants rents the same for several years but then could increase them.

What was the outcome?

Rents increased, utilities went down for tenants. Got new vinyl clad thermal pane windows so eliminated a lot of the lead paint issues. Painted the outside, New roof, new flooring. replaced any wood that had lead paint. This allowed for higher rents.

Lessons learned? Challenges?

Filling up my properties with homeless women and children is NOT a good idea. Buying a property in VT with a flat roof also not a good idea. Siding was Asbestos. Paint it don't remove it.

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

Nope I used myself. If I was going to buy there now I would use. Brian Armstrong at Keller Williams in South Burlington, VT. He's an investor and has many units and is a great realtor. He also used to be a lender so he knows that side of things as well.

Investment Info:

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

Purchase price: $179,000
Cash invested: $10,000
Sale price: $480,000

4 unit built in 1885. Needed ton of work. 150K in renovations over the years.

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

It was a 4 unit I wanted to live in. I lost my health and needed to find a way to replace my income. I bought four /4 units in 2000.

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

I was listed on the MLS. No one wanted it and then the market shifted and it had 7 offers. I was lucky enough to end up with it. I offered full price and kept my fingers crossed. Totally didn't know what I was doing.

How did you finance this deal?

FHA

How did you add value to the deal?

I added Washer dryer in the basement for all to use. I renovated myself on my good days, I also rented to Section 8 tenants and got them to sign up for free weatherization. The state weatherized the building for free and increased rents as a result. I learned a lot.

What was the outcome?

After it was fully renovated I was able to increase rents and able to move out into another property.

Lessons learned? Challenges?

I didn't know what 16" on center meant or what knob and tube wiring was. LOL quite the shock when I went to renovate. I got a lot of education in this property. I also learned over the next 7 years to not own in states that have high property taxes. After 17 years my income was going backwards. Property taxes had increased 600% in 7 years. I sold three properties at that time and moved the money to AZ.

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

I was a realtor at the time. I was in the process of getting out of the business so no. Not in VT.