All Forum Posts by: Astrid Cuas

Hello BiggerPockets,

Happy to report that after 8 months of research; three offers rejected and two realtors I finally got an offer accepted. Small multi-family in a nice area.

Asking price: 55K, Duplex, built in 1910, Needs a lot of work; smallest house on the block. Seems like it’s a lady that’s just ready to unload the property. A relative of the owner is currently living in one side, the other side is empty.

Area Comps: 120K – 150K; Average Rents $695 - $900 (2 bd/ 1ba)

Multiple offers situation. So I offered: 60K; I was approved for 100% financing from my Credit Union. I have 30K in personal saving that I plan to use for renovations. My rough estimate for renovations is approximately 23K.

The other offer was Seller Financing, but I was not given any additional details.

Problem: Patiently waiting for the appraisal to come back and I am extremely concerned that the bank will not allow me to use the 100% financing because the house is old and in serious need of repairs.

I really want to use my 100% financing on my first property so I can do the BRRRR strategy.

But I am trying to decide....

If my Credit Union refuses to give me the 100% financing should I walk away from the house and wait for one in better condition.

OR should I use part of the 30k for the down payment and risk less money for renovations?

I can only speak on my credit union, but that seems to be correct. I plan to be an owner occupant on my first deal. I have been working with my bank and I am in the process of purchasing a fourplex.

For rental/investment properties they offer 80% LTV.

Below is some information on the their mortgages

• 100% financing available for purchases and "no cash out" refinances of single-family primary residences
• Up to 90% financing available for purchases and refinances of primary residences
• Up to 90% financing available for purchases and refinances of a second home. Only one second home per member is eligible for financing.
• Up to 80% financing available for a rental property. Refinances are further limited to the existing indebtedness on the property. Each member can finance one rental property.
• Maximum term of 30 years
• Origination fee .75% of loan amount (cap of $1,500)
• No application fees or credit report fees
• Private mortgage insurance is not required

Jon Holdman

If by "in love" do you mean am I seeing dollar signs, Then yes I am. The property is in a C+ class neighborhood. Its transitioning slowly and I believe it has a lot of potential as a buy and hold. The city has been investing a lot in that area. Its not a big market and there are not very many fourplexes. This property is one of two fourplexes on the market. The other one is in a different B neighborhood and gets 450 per unit and they're asking 159,000. I can see why she may not be motivated. So what would you suggest; should I contact the PM directly in order to find out this information? What should I ask them for?

@Colleen F.!

More direct question is my solution; so I appreciate you giving me a few. Thank you. If you think of anymore please feel free to share them.   I'm not sure she bothered to ask the PM very many questions. While looking at the property with the PM she was not very engaged and I didn't want to steal her thunder. I thought that perhaps she was playing hard ball so I followed her lead, and assumed that once I told her that I wanted to proceed she would dive in, but no.  I have a clear understanding of what they mean by investor friendly Realtor. I could use one of those right now. 

Buying a Fourplex with existing Tenants

HELP ME PLEASE

I have been trying to gather information on a fourplex for several weeks. My realtor seems less than enthusiastic about the property and its location and it being a short sale. There was little to no information listed on the property and for some reason I expected my realtor would put something together for me. NOPE. Big Mistake. If I want this process to go faster I’ll need to do this on my own. Which I am fine with. Good learning experience. The property is being managed by a PM whose contact information I received while viewing one of the units.

I mentioned to my realtor that I wanted all the information she could find on the property including financial history from the PM; she said she would look into it. After some pressure my realtor sent me a text saying that there were washer and dryer connections in each unit, and forwarded me an email from the listing agent which listed the rent roll and agent notes.

In summary; 3 out of the 4 tenants are on a month to month lease paying and pays $385; all the tenants have been there for over a year. One receives a 65/month discount because they maintain the yard. Owner passed away, wife is just finding out about the property.

There were no attachments and no documents to support the information in the email. Very disappointing. For some reason I expected more guidance, more professionalism, more concrete information. At this point I feel like I have no use for her.

I understand that during the purchasing and negotiation I’ll need a realtor, so I plan to keep her for that, but do I need her for the research? I do not want to overstep my boundaries or create friction, but I cannot keep wasting time. She doesn’t seem to have many answers or perhaps she has bigger fish to fry.

So maybe someone here can help me please

Can I contact the PM company directly and request copies of leases and agreements, income and expenses. How do I find out if tenants are paying rent on time, and if there are any reoccurring maintenance requests? Is there a report that PM’s should have with this information? And when is it ok to ask for all this info, after I put in an offer, hopefully before. Are there additional questions that I should be asking or documents that I should be requesting?

May I ask, @Joel Florek

Why did you use a commercial loan instead of a conventional loan? I thought a 4plex was still considered a single-family.

I'm looking for my first 4plex now; thank you so much for sharing your story. I'm sure stepping into the situation with realistic expectations has made this an enjoyable experience. You seem to be handling everything like a pro. So excited for you. I look forward to seeing some of your pictures. It's a great money saver doing all that work yourself. The best part about it;  being a handy man now makes you the type of landlord that renters appreciate and will most likely recommend to their friends and family with little money out of pocket. You will have much success.  

Great job on requiring the tenants get renters insurance. I'll need to make that a part of the rental agreement.  Keep up the good work.

SOLD.

Paul Jamgotch

I am an infant compared to you. THANK YOU for taking the time and walking through the numbers a bit. You have given me so much to consider. Refinancing after the rehab sounds good, but doing it a few years later sounds even better. I do not need the cash flow to live on, but I will need the money to secure my next multifamily. If my first goes well I have every intention of purchasing another one 12-18 months later.

And since you put it that way, 29% annual return IS magnificent.  I'll need to make sure I set better criteria's moving forward and see if I can actually get that. I am still learning how to crunch the numbers.

I am sure I will have a lot more questions in the future, and hopefully some lessons learned as well as success stories. Glad biggerpockets is here to hold my hand along the way.

Thank you @Desi Arnaz and @Steve Babiak for sharing your story and an exit strategy.

I'll have to do more research on those. I really appreciate it.

I did ask about penalties for early payoff and there are none. Looks like I am off to good start.