All Forum Posts by: Chris A.

@Armando DeMarchi  

If you have a good team in place near your rental (property manager at least, and possibly a handyman ) then the distance does not matter as much to me.  I think having team members and good property management is key.  Another advantage to doing this is that it frees up your time so you can look for other deals and expand your business.  

If you are just starting out and want to self manage, then you have to make that call for yourself.  How far are you willing to go to check on the place and show it when you are leasing it out?  In this case I would probably go for 30 min or less, 1hr max. 

Calvin,

Initially I did not double CAPEX and Maintenance, not a wise move since there are 2 structures on the property. Fortunately for me there is enough room in the numbers I can to cover that. Hiring a property manager would put the cashflow in the negative but the rents I calculated are below market so it would not be in the negative by much when adjusted for that.

@Scott Price    @Rebecca M.

Any word on when the meetup will resume? I am currently on deployment and looking forward to coming back soon. Also would be happy to contribute to the meetup by talking about my experiences in investing part time while in the Navy full time. If you look at my profile I have updated it to reflect my current holdings. Not the most experienced investor, but happy to share my mistakes as well, to help others avoid them.

Chris

Do you have a payment collection system?  I use Cozy.co (learned of it through one of the BP podcasts).  For each property I enter the terms of the lease along with the tenant info, email address ect.  Once it is set up I don't think about it at all.  I get an email if they pay on time and a different email if they are late and the 10% fee is automatically added by the website via an email to the tenant and a reminder to pay.  I don't like for them to pay late and have to pay extra, but usually after one time it doesn't happen again, and they are incentivized to be on time.  

The site has many other features that I use for listing the properties, screening tenants.  It is free for landlords, and they make money on the credit checks and background checks ($20 each)  when someone applies to rent your property. 

@James Miller  I am using Cozy.co to handle payments and am self managing with the help of a local friend for the time being.  Never heard of RPM360 but I'll have to check it out. 

@Noah Zuniga  That is an excellent idea and I have been thinking of a few different ways to get a similar outcome.  It is on the to-do list to spec and price out over the coming months.   I would even consider renting out both houses and living in the MIL suite over the garage.  Plan to down size anyways, (except that I like woodworking and having a place to work on my truck). 

@Scott Price Thanks, I am looking forward to coming out to the meet ups once things settle back down with the virus. Going to local meetups in VA was a huge help for me to get where I am at today, so I would be happy to get back into networking and sharing ideas with like minded people.

Thanks for the responses,

Chris

Investment Info:

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

Purchase price: $457,000
Cash invested: $29,000

Was moving from VA to WA for work. Due to work schedule and COVID restrictions I was not able to see the property in person prior to purchase. It has two houses on one lot, I live in one and rent out the other. Mortgage is just under $2,500 and the rental house brings in $1,600.

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

It was a win on multiple fronts. I like that it is on a 2.5 acre lot, and with two houses it is financially equivalent to having a duplex but the houses are spaced out enough to provide plenty of privacy.

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

I found it for sale online, called the agent and asked for a discount if she represented both sides. She agreed and I received a 1% credit after purchasing the house.

How did you finance this deal?

Conventional with 5% down was the best option for me at the time. FHA was similar terms but PMI would stay for the life of the loan where conventional automatically drops once the payments bring the principle amount owed to below 80%.

How did you add value to the deal?

So far just some landscaping and a 10'x16'storage shed (since there is no garage). Long term I plan to add a garage and possibly more land from neighboring parcels.

What was the outcome?

While I prefer to walk it in person, technology is mature enough to do the transaction remotely. I still would prefer to view the properties in person for future transactions if available, but I still consider this a success and I do not regret the purchase at all.

Investment Info:

Single-family residence buy & hold investment in Bremerton.

Purchase price: $240,280
Cash invested: $500
Sale price: $255,000

4 bed, 3 bath house 1,482 sqft.
I bought this while stationed in Washington state and looked into selling but even after 3 years there was not enough equity without having to bring a lot of $$$ to the table to close. I then became a landlord and rented the house out. Initially it was negative cash flow, just under $100, I was able to refinance in 2014 to have about $150 in positive cash flow for the remaining years until selling. Overall a great experience and great property.

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

This was before I became serious about real estate, I just wanted to have my own house because it was a good 'investment', but I didn't truly become an investor until moving out in 2012 due to being stationed in California.

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

It was on the MLS, I used a retired military agent by the name of Ken LeMay. Negotiating was pretty easy

How did you finance this deal?

VA home loan 0% down

How did you add value to the deal?

while living there in 2011, I remodeled the bathrooms adding new vanity/sink, lights in the two downstairs units. Added wainscoting in the guest bath, and partially finished the garage, with custom built shelves. In 2017 I added fresh paint throughout the inside prior to selling.

What was the outcome?

Even though I wasn't the most savvy about the purchase and planning it as a rental from the beginning, I was lucky to be able to rent it out and have an ok property management team. I had a good tenant and there was some damage that needed to be repaired prior to selling, it was not much of a setback. I ended up getting positive cash flow from 2014 until selling it, and after all costs i got back about $15K.

Lessons learned? Challenges?

I would have taken a closer look at property management and considered self managing if possible. Always plan your purchases as a rental because you never know what the market will do. I started using a tax professional who asks the right questions to optimize deductions and plan for future years, well worth the $$.
I now regret selling this house but that was before listening to the BP podcasts and really reading up on ALL of the long term benefits of real estate, live and learn.

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

Ken LeMay was my real estate agent for the purchase and the sale. He did a good job on both sides of the deal.

Investment Info:

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

Purchase price: $215,000
Cash invested: $36,000

This was my first partnership and turnkey quality property. It just needed appliances and a fence installed.

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

I like multifamilly, and the partners are people that I like working with.

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

Anthony found the deal and put it together. I liked the numbers and we went forward with it.

How did you finance this deal?

Anthony carried the loan, AJ and I came up with the down payment.

How did you add value to the deal?

It was all based on expected rents in the area. It was a little bit of a challenge since the property was newly renovated, and not many properties in the area had been renovated recently.

What was the outcome?

It took a little while to see the cashflow, but that was because my partners and I decided to build up reserves prior to taking any distributions. Even with a newly renovated property we wanted to have a cushion available for emergent repairs.

Lessons learned? Challenges?

There were some difficulties getting the seller to fix some discrepancies with workmanship on the rehab. Stick to your guns on the close out inspections, and make the seller do what they are responsible for. It worked out in the end but it was a challenge for sure.

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

Melanie McDaniel. I would highly recommend her or anyone else from the Think Real estate team (also: Taylor, Erica, and Claudio)
Dan Grub from BB&T, lender. Highly recommended.
Shaheen Law Firm, Entity/LLC establishment and closing agent, highly recommended.

Hi Taylor, thank you.  

Initially I was all over the place and looking single family properties that needed light rehab, properties with mother in-law units, multi family, pretty much everything residential.  It was still a good experience though since I was able to walk through a lot of properties and get a better understanding of what the neighborhoods around here were like.  I even hired a contractor to come do a walk through with me on another property (that I had under contract but didn't get).  That was well worth the money since he showed me some of the things to look for in the future so I can do better ballpark estimates on my own and speed up the process of putting a good offer in.  

Once I got more focused on what I wanted and what the numbers needed to look like it only took a couple months. I ended up closing right before a yearlong deployment so that was a little bit of concern, but I had great people like Melanie helping to manage it so that made things go much smoother back home.  

Investment Info:

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

Purchase price: $141,500
Cash invested: $500

Duplex, VA Loan

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

Wanted to use the VA loan to house hack, live in half and rent out the other half.

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

MLS listing. I used numbers that reflected renting out both units and using a property manager since I am still in the military. Seller had to come down to meet these terms but it worked out. Doing a 0% down VA loan made this a little more difficult/ tighter deal but I am glad that it worked out.

How did you finance this deal?

VA Loan

How did you add value to the deal?

In 2018, rehabbed the kitchen prior to moving in current tenant in unit 2

What was the outcome?

Great rental property that produces steady cashflow.

Lessons learned? Challenges?

Had a tenant want to break the lease early to move away for a job shortly after purchase. I had him look for a suitable replacement, and I would release his financial obligation once the new tenant moved in. I had someone who was local (while I was on deployment) assist with vetting the new tenant and it worked out well. Having great people to assist, boots on the ground while you are out of area is really helpful.

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

Alex Winfield was my agent for this purchase, and I would highly recommend him.