All Forum Posts by: Bart Van Leijsen

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $40,000
Cash invested: $55,000

Fix and Flip. All in for 95k. 40k purchase and 55k rehab. ARV 200k

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

Off market

How did you finance this deal?

Cash and HELOC

How did you add value to the deal?

Complete renovation

What was the outcome?

Flip for almost 100k profit

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

I am an agent

Like what Austin said, I would use the BP calculator. Another important factor is to know the grade of the neighborhood given property is in. Speak to other investors who know the area well and ask them for advice. I can send you a graded map of Ohio! 

@Bart Van Leijsen I remember when I underwrote my first deals years ago it was overwhelming... I know the exact feeling you are talking about! 

The best thing I personally found that helped was to:

1. Choose one underwriting template spreadsheet/calculator (you can find many online, I see some in this thread have referenced the BP calculator).
2. Then take some time to write down the main metrics that will pertain to what you are doing. In some cases you do not need all of them at all. Some of these templates (that's exactly what they are... templates!) can be overwhelming because they include things like a "Monte Carlo Simulation" or "Sensitivity Analyses"... just get a grasp of the fundamentals like cap rates etc. and go from there.
3. Build your own excel spreadsheet. This is the best way to learn the process. I know some other investors like to delegate underwriting/use online templates but honestly, just building something basic and adding on to it will teach you how the numbers work with each other and what each term really means. There is no other way to learn the business as numbers/underwriting is one of the pillars of CRE.

Of course this will take time. Please understand there is no "overnight" solution and it is a skill set that will flourish as your experience as an investor compounds; which it sounds like you are on your way to doing!

Hope this is helpful.

Oh another bonus point: You can save yourself lots of time but not underwriting every single deal at high fidelity. Know your buy box and if a deal doesn't fit... why underwrite it? You can save yourself so much time this way. Also I would create a "back of the envelope" tab in your excel spread or as some other investors like to call it "Quick n' Dirty"... This is a very basic calc that will let you know if 15 minutes or less if a deal is a winner or not. If you are interested then it's time to dive in! 

Happy underwriting 🖊️

 Cincinnati fits all those boxes well! Big hospitals, a few big colleges, crime rate lower ( in certain areas, some aren't good. Just like all cities), etc

Hi guys! I've been working on a value-add multifamily project long-distance (~1000 miles away) since July, and had the pleasure of sharing an AWESOME update with my capital partner earlier this week. Wanted to share it here as well for inspiration, & to invite anyone looking into similar projects to message me if I can help in any way!

“MARKET VALUE: Big news here! We paid an effective price of $1,015,000 (purchase price minus seller credit) for this property just 6 months ago. It was appraised at $1,100,000. Right now we have 2 units that are vacant, ready, and being marketed, and with the 'asking rent' reductions we just did to try to fill them faster (it's offseason for leasing), the estimated market value of the building based on net operating income is now $1,542,500. We owe about $840,000, so we now have a total of ~$702,500 in equity, we are now only about 54% leveraged with our commercial loan, and we have a "machine" that cashflows a total of ~$3649/mo (once those two vacant units are filled). We have not yet reached our full cashflow or market value potential, and likely will not for another year (as most tenants are now in 1y leases expiring again in Dec), but we are in amazing shape with this value-add process.”

For context, the ‘day one’ true net cashflow for this property was about $800/mo, and the full true net cashflow potential with market rents is just over $6,000/mo. We got one of those two vacant units rented out a few days after I sent this email as well. All of this said, my partner has seen a ~41% internal rate of return on her investment, excluding tax benefits, in just the 6 months we have owned this property. This is strictly based on equity as we have not pulled out any cashflow from the property yet. Super pleased with how this project is going & I continue to be extra grateful for our property manager for staying on top of things! I stand by saying that having an AWESOME property manager in place makes or breaks a long-distance investment. I did interview ~30 companies during the closing process, and funny enough, ended up going with the very first one I talked to. What stood out to me was that the owner is a real estate attorney of 20+ years, which in a tenant-friendly state, was comforting. Plus, they manage ~1500-1800 units, and ~80% are owned internally, so their team is trained to treat every property as if it's their own. The owner also shared a ton of value with me on our first call, which he really didn't have to, so that stuck with me. 

Anyway, just wanted to share this win with the community, and if you're doing similar projects and I can help in any way, please feel free to reach out! Always happy to collaborate and help others reach their goals. Thanks for reading!

Stick with the plan, invest in multifamily properties that meet the model investment criteria.