All Forum Posts by: Ashton Levarek

@Thuy Pham-Satrappe we buy 2-4 unit properties all the time and if done right they provide both cashflow, appreciation and equity. But to be fair we create the equity by purchasing distressed properties, adding value via repairs, raising rents, storage, etc. Then we rent at just below market value and refinance to get our cash back. But this creates equity and cashflow when done right. If that doesn't sound familiar then check out The BRRRR method and or anything by David Greene.

Additionally, like many others have said, if your current market doesn’t provide all three, or at least two of those (cashflow, appreciation, or equity) then I’d suggest finding a market that does.

Hope that helps.

Ashton

Investment Info:

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

Purchase price: $125,000
Cash invested: $2,500

Contributors:
Jesse Marinez

Duplex purchased through whole saler for $105,000. Built $20,000 of rehab costs into the HUD purchase price. Rented each side for $750 ea and refinanced at HUD value ($125,000). Cashflows at $431/month.

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

Purchase Price vs After Repair Value and Rental estimates for that area

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

Through our property manager and local whole-saler. Negotiated price basically by showing the seller the ARV and why we could not purchase it at the price he wanted. I believe he came down 10k after that.

How did you finance this deal?

Cash reserves and partnered with private money.

How did you add value to the deal?

Added central AC, new paint, some flooring, bathroom and appliances. As well as added a shed to protect water heater instead of leaving water heaters in master closet.

What was the outcome?

Ended up leaving about $2500 in the deal due to unforeseen costs. Cashflows at $431/month.

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

Christopher Levarek - Partner and Investment Manager... couldn't do it without him.
Jesse Marinez - great property manager, absolutely clutch for long distance investors.

@Scott Jensen- if you buy cash and underwrite the cost of repairs into the HUD then you can refi for 75% ARV or HUD price (whichever is lower) in under 6 months. Zero seasoning needed.

Example

PP - 100k

HUD Price says - 120k

ARV - 200k

Refinance in 1 month at 75% ARV = 150k or HUD price of 120K.

If you're trying to scale and using the BRRRR method then this is the model to use. At least, that's the model we use until we find a better one.

Best of luck.

Ashton

@Alexandra Fisher - Yes, the Carolinas have been good to us so far. But I'll try and answer each question individually -

Is Raleigh prone to hurricanes and flooding - Yes and no, historically (at least since I've been in the area) its too far inland to receive the brunt of those types of natural disasters but it has received strong winds and excessive rain due to storms passing up the coast. But thats not to say it can't happen, right. Additionally, there has been tornado warnings at times as a side affect of those storms. But I would recommend to just buy outside of flood zones.

Commuter cities - yes, those are all accurate. And if you want to stay ahead of the growth (and the price increase as more commuters look for nicer rentals) I would look into any smaller city along major roads leading to Raleigh Durham that support a 20-30 min commute. Can't give too much away though, thats our niche right? ;)

Winston-Salem - Seems like a good market, we don't own any property in that area but I know some other investors that do, and like it. I believe theres a college there as well, good for renting. Job growth is higher than the national average which is good, but unemployment is higher too. Truthfully though, we haven't really looked into that market because we just don't have a team set up there yet. For long distance investing having a good team on the ground is clutch. 

Best of luck, PM me if you theres anything else I can help with.

Ashton

@Alexandra Fisher yea we love the Raleigh-Durham area of NC. Job and population growth has exceeded the national average while unemployment has steadily remained below the national average, which is exactly what we look for. Raleigh was listed #3 in the world for quality of living and Durham is seeing an average of 20 new people moving into the area each day. This has made investing more competitive but if you just turn your attention to the surrounding commuter cities you can still score some great deals.

We primarily focus on multifamily properties and have been fairly successful thus fair.

Hope that helps, best of luck in your search.

Ashton

Great post @Shiloh Lundahl, and congratulations. 

First world problems, am I right?

On the other hand I would argue that 1 million, 10 million, 100 million, its all perspective right? I mean if you're spending all your time and effort trying to sustain that 1 mil of net worth, it just might not be "worth" it. Right?

And to take a page out of Timothy Ferris's book, "The 4 Hour Work Week" being rich isn't about money, or net worth, its about free time. A man that spends some 80+ hours each week working to make that 1, 10, or 100 mil a year is not as rich as that man that hustles for 2 months to make 100k and then be off for 10 months.  Ferris argues that the new rich create businesses, or investments, that run themselves and allow them to take 1-2 "mini retirements" each year. And I think I'd have to agree. 

But thats just me. 

Ashton

@Trey Knight You don’t need to sacrifice time now for some great dream of the future. Those that do are missing the point of financial freedom. If you’re not careful, chasing that dream of financial freedom will just become another job. Instead of working in your business, focus on your business, i.e. on how your business can work more efficiently.

To keep it short, recommend reading-

4 Hour Work Week by Tim Ferris

The E-Myth for RE investors Michael Gerber

The 1 Thing - Jay Papasan and Gary Keller

Miracle Morning by Hal Elrod

It’s absolutely possible, you just need to create the systems that allow your businesses to run themselves. And with all of today’s apps, online payment systems, etc it’s almost too easy.

Best of luck.

Ashton

For all investors out there - This guy is a Rockstar! His professionalism is only exceeded by his commitment to excellence. An exemplar property manager - he has been crucial to the success of our last project, and especially the rehab and renting of our two Durham Duplexes.  Could not have done it without him.

Thanks again Jesse, glad to have you on the team - and brace yourself, theres more to come brother!

Ashton

Welcome to BP

Check out "The Book on Investing in Real Estate with No (and low) Money Down..." for a great place to start @Sarah Thibodeau.  Eye opener for sure, lots of options out there if you are smart.

Best of Luck

Ashton

Welcome @Marlon Galarreta. 

Ashton