All Forum Posts by: Chris Courteau

@Kirk R. see above. Sorry I forgot to include your name in the response. 

I talked to the tenants because they were paying $355 a month in rent, which is about half of what rent should be. It wasn't section 8 or anything, but I talked to the tenants and they were on a month to month lease so I gave them 2 months notice from the closing date and said it would be $450 for 6 months and then $500 the remaining 6 months. I told them that I wanted to fix up the apartments but that's putting money into the building. They stated that the owners for the past 30 years which was 3 or 4, just collected rent and were never around. They stated the lawn would only get mowed if the city sent a letter to the owner that it had to be done or there would be fines. I made sure to mow the lawn every two weeks and keep them aware of everything I was doing. At first they were not happy but I continued to be around the building and handle things. It wasn't easy at the start but I continued to show up and be there, for instance the oven stopped working in December before Christmas and I got a new one and delivered it to the tenant in 4 days when the big box stores were saying it would be about a month before one could be delivered. 

Investment Info:

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

Purchase price: $46,500
Cash invested: $12,000

It's a small duplex, 1 br 1 ba in upper and lower. There was a tenant in each apartment when I purchased it in June 2019. The upper had been in the apartment for 30 years and the lower 20 years, the rents were half of what market should have been but the house needed updates. I have brought the rents up to about 75% of what market should be. Continuing to provide updates and bring up the rent.

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

The duplex was priced so that I could use my own money and a private lender to pay for it. There were long term tenants already in place paying rent each month and I saw many improvements that could be made to bring value to the property.

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

My real estate agent found it and she was great dealing with the listing agent and pulling comps of what it was worth now and would be after repairs.

How did you finance this deal?

A private lender.

How did you add value to the deal?

Replaced windows, updated electrical, plumbing and many little things such as fixing broken light fixtures, doors.

What was the outcome?

I still have this property in my possession.

Lessons learned? Challenges?

The tenants when I looked at the property, I asked them what they would want improved and they were very informative. They were less appreciative when I told them the rents were going up because of the money being put into updating the property. While having tenants was a blessing in that money was coming in from the start, it was tough because they had ideas of what was important and I had a different priority list. A vacant property would be easier to update quickly and raise rents.

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

Donna Pease-Howard Hanna, I've used her to purchase my own home twice and this rental. She is very straightforward and helped me get a low price on the property. I would recommend her to anyone.

I just wanted to follow because I agree. I have a small duplex and it's tough when I'm getting pushed back to larger jobs for contractors. I understand they are taking the larger jobs so it's steady work and income. 

I am from West Seneca and I think the South Buffalo area is a good value as well. The taxes are a lot lower than West Seneca and many of the homes are upper/lowers. 

I went to the property directly after I closed and told the tenants I purchased the property and gave them leases. They were there when I first saw the home and when I did the inspection. There were on a verbal month to month because the upper was there 30 years and the lower was there 20 years. I gave them leases to sign that were effective August 1 because I closed in June so at least a full month notice. 

I would like to hear how your situation goes. My tenants are a little upset because they were paying way below market rent and the property needs work so I told them rents are increasing and the upper seems to be taking it as a vendetta because she wants to start demanding things since I am demanding more rent from her than the past 3 owners did a month. 

@Oscar Chirinos. I just want to keep tabs on this discussion because I want to know about a 6-8 month waiting period to refinance. I have purchased a property in June and have to do work but then want to cash out refinance to recoup my rehab costs and pay the original loan off so I can have it all under one, but the same as you, I have heard many differing answers such as I need to own for 6 months before I can refinance or such. 

@Michael Peters I am very interested to hear how this turns out for you. I am not quite in the same situation. I purchased a rental duplex with A private money lender which is listed on the mortgage. With some rehab, I am hoping to pay off the original loan and then take some money away to purchase a 2nd rental. My plan was to find a cash out refinance where from what I gather I could get 80% of the home’s value so I’d pay off the original mortgage and have cash due to the rehab causing an increased value. Would this work for you because you’re value would increase drastically because of your rehab?

If you do open the LLC. I found a local bank that did small business accounts with no fees. I would keep an eye out and ask friends if anyone knows of one around you.

I would love to join. I have one rental and am working on how to get the most value for the rehab part. Then I want to turn it into multiple rentals but then need to figure out the financial part for purchasing more. My fb  profile is under Christopher Courteau