All Forum Posts by: Casey Charkowick

I also have a great agent I can recommend. I have a solid lender and attorney as well if interested. Let me know if you want to chat.

Hey Frank , thanks for the response. Waiting to hear back on our offer now! I wasnt entirely clear. $10k can get me to a point where all three units are rentable. Thats focusing on interior only. I plan to have it full by June 1 the latest.  $0 income in year one = putting all income back into the property in repairs, e.g. new siding, landscaping, shed repairs, etc. 

Hoping to get $1200 for each 2br and $800 for the 1br.  Current offer is $260. With 25% down payments will be  $1380. 

We're in Rhode island. Multi families in this area are a price worth consider are almost non-existent! 

Hey BP Folks!  

I've been VERY trigger shy over the last few years, and as a result missed out on a few good opportunities. I have one in my lap now that I think is a go, but still a bit paralyzed. It's a 3 family, two 2 br and one 1 br. List price $250K. The seller is a retired contractor who doesn't have it in him to do the reno and management. Place is FILLED with junk, which I am willing to keep to make the offer as clean as possible (I know I can make good use out of lots of it anyway). The listing agent says that the place needs $100K. I strongly disagree. I have a background in carpentry, with capabilities in electrical and plumbing as well. I think I can get all units rented with $10k and sweat equity. Exterior will eventually need $25K in upgrades, but not to get it rented initially. The property has an added bonus, there's a small, roughly 600 sq ft. "shed" out back. It is insulated and has power with a loft upstairs. This can be renovated and rented as a standalone cottage as well. That would be the last project. 

I have an investor who will front the down payment. I figure I can cash flow $2780 once all units are rented. Being conservative, I plan on $0 income in year one, then if I can keep it rented 9 months/year, $25K/year after that (full occupancy would be $33K). 

My biggest concerns are: 1. heat is electric, and this is New England; 2. no laundry in any apartments, and it would be challenging to add hookups; 3. exterior needs new siding, and probably lots of unknowns; 4. I can do all work myself, but I work full time so I actually cant - I do not have a contractor and would have to rely on unknowns if big issues arise. 

I have an offer letter in hand and this place will be gone within 24 hours, so I have little time to worry...

Any feedback would be greatly appreciated!

Thank you! 

Casey

Hi Caleb, that's part of why I am so paralyzed on this one. I am having a hard time finding good comps. Thinking I can refi for 370-390, but that's just an estimate based on what I know about the area. It seems like without a good handle on the post rehab value, I am taking a big risk. May have to pass on this one...

Sorry, asking is $389K...

I am trying to do my second deal and having trouble pulling the trigger. I'm doing this with my brother, who is going to put up 60-80% of the upfront capital. I will/am doing all the leg work, research, deal finding, viewings, management after closing, finding tenants, etc. We have looked at a few recently, and I put a low-ball offer on one. The sellers came back two weeks later asking if my offer was still open. I'm on the fence on that one. 

This recent one has got me in a pickle: 

Three family, all units rented under market value. Could get $1350-$1500 for each, currently at ($1200, $800 & $1200). Inside is in great condition, needs very minor updating. Exterior is terrible. Needs new siding, rebuild of two front porches, new roof, and replace/repair most exterior trim. 

Asking: $349K

Offer: $349K

Rehab: $50-$60K

Thinking of using Patch of Land, they offered 10% with 2.5 points for a loan on 80% of purchase price and 100% of reno costs over a 12 month term. These numbers seem high, but if the reno estimate and post reno value is accurate, it seems like we could refi and pay off the loan easily. Seems to me like a pretty risky one, but with lots of potential, so I am paralyzed!

Any thoughts would be super helpful! 

Thanks, 

Casey 

Thanks for the quick input everyone! After another day of thinking, we've decided to lowball on this one and make an offer of $250K because I know I can get 2400/month for both units, (same area/sq. footage/amenities as my other 2 family which has rented at 2400 with no issues for four years) but anything more is a guess. 

@Anthony Thompson

@Anthony Thompson Your advice is much appreciated, I was getting the sense that I was moving too fast on this one, and the fear of missing out was getting to me. With the lower offer, I feel much better about these numbers. If I lose it, then I'll just keep looking! 

@christiannachtrieb I set up an LLC, which will ultimately own the house, but to avoid a commercial loan, we are putting it in our names for now. We also will be financing ourselves, and expect things to be a bit messy in terms of separation of funds, so to avoid a co-migling/pierce the veil situation, we've decided to hold off on having the LLC own the property until after the reno is complete. Once it is done, we will refinance and transfer ownership of the property to the LLC for long term liability protection.

I am a corporate lawyer, so I am familiar with business entity structures/formation, but that said, anyone can set up an LLC online without much trouble. Just do your research beforehand. The thing that gets most people is not treating the LLC as a separate entity. You need to keep everything separate and maintain immaculate records. I'm happy to answer any more questions so feel free to reach out.

Rhode Island is a bit hot, but I can't imagine it's as crazy as Boston. There are a lot of good deals out there with many tenants available. I have had success with my one property thus far, and because I know my market, plan to stay local for the time being. It's worth a look down here! 

My brother and I are looking at a two-family in a town with a very reliable tenant base. Renting this property will not be a problem.

List price: 289K

Offer price: 275K 

Reno Costs: 30K

Expected Income: 2400 - 3000 (total for both units, garage has storage rental potential, but not considering that for analysis)

Monthly payment: 1600 (mort. tax, insurance)

We are planning to put 25% down to secure the mortgage, and finance the reno ourselves. With the expected income, it will take us 3 years to pay off the reno before we will start cash flowing. All the numbers look bad, aside from the longterm rental income and the potential flip value. 99% of all two family homes that sold in this town in the last 180 days sold at or above list price. 

We are thinking of putting an offer in tomorrow, but I've been dragging my feet for a week. I've been looking for my second investment property for over a year, and I know I need to take action, but none of the deals I've found are home runs. This one is the best I've seen and I suspect it will be gone by COB tomorrow. 

Thanks!