All Forum Posts by: Cody Barrett

Intense ! 

Bryan, @Joe Villeneuve pretty much knocked it out of the park for yah... If you were to follow that advice, my judgment is that you would indeed save lots of money, dodge lots of mistakes, and really set yourself up nicely for the next deal..  Most flippers I've spoken with lost on their 1st deal but that might be because they went ahead with limited tools in their tool belt.  Failing forward isn't bad, which is what jumping in might do....but you can do it in a way that won't be so costly if you were to make a simple/common 1st time flipper mistake where an experienced partner can say, "look out for that!"

You will do fine I am sure! Flipping can be tricky so definitely dive into the material and take some action with a mentor! I have never flipped before but these are some thoughts I'd have before diving in.   

Good luck with the purchase! Keep in mind some possible added expenses right off the bat once you go to reposition the property by raising the rents.  Might have to spiff up the units a bit to attract those higher rents with good tenants. 

Will the income from the current tenants be good enough for the rent hike or will that drive some tenants out?  That might be to your benefit so you can get in there quickly and update the unit and get a higher paying renter in there.  Hopefully you will have a healthy pool of solid applicants after the turnovers are complete so you meet your income projections.   

I did not read all of the above comments but noticed a Master Lease option.  If the property does need a lot of updates and repair to get those rents higher then make sure you can for sure purchase it later on when the option to comes up....because if you cannot then all that work, time, money and possible gained equity goes back to the seller if you cannot exercise your option to purchase when the time comes.  I have not done one before though but I'd be thinking about how you are protected as the buyer so nothing is lost on your end.  Good luck again, I will be following along to learn something new!

Cody B 

Confidence of what to do will come from knowledge of your state laws. Knowing what the state allows you to do will give you a few ways to solve the problem and an idea of how long it will take. Ideally you should ask what you want long term...If you think the tenant can meet your needs as a landlord while you meet your responsibilities to them then solve today's problem and set clear expectations along with regular follow ups going forward.. Might have to babysit these tenants until they're up to your standards.  Hopefully the return on that time investment is worthwhile. Good luck! 

Really great read. My 1st was a duplex but decided to live at home still to buy another duplex to live in the following year which I'm hoping to close on by 4-21! 13 months after my first purchase. After this year I'll have 2 yrs of experience as a landlord which should help as the article states. Hopefully I can snag a 5unit plus by the end of this year. We'll see! Great work @Scott Trench thanks for posting!

Very cool! The guides will be useful and of course subscribe to the podcast !! It is great to be in the know and hear how others are involved across the country in numerous markets.  I particularly follow the buy and hold strategy as I am trying to grow while limiting my mistakes.  So far I found that it is easy to mess up in this crazy market with so much happening and I am glad BP is around to help guide me through the maze.  I hope you too find it helpful, enjoy all the material!!

Cody B 

Indeed, what Michael stated.  With yours being a 4 unit they'll use comps of recent sales to weigh heavily on the value.  They might look at the income it produces but again they lean more towards recent sales of similar 4 unit buildings to comp yours. Was the 395k sale price a 4 unit building?  You did say that it was only 2 blocks away. 

Good posts draw lots of attention, gotta love it.  It also tells you that your are absolutely on to something.  The market is crazy and it would be smart to purchase in markets that appreciate organically from specific economic reason with some value add to run with as well to build safety...  You absolutely need one or the other, if not both right now...  If it is just value add then buying below intrinsic value is critical.  Maybe even schedule a 10 yr hold at this point just in case the market corrects and dips a bit.  This might give you more than 1 exit strategy if things do go south with the market.  1 being that you could fire sell it since you purchased below its value and maybe spruced it up a bit or 2 you can hold on with some lower rents to attract longer term stable tenants looking to save money...

But yea, the advice from others above is excellent.  Buy with value add and in markets that appreciate organically or are going to because of specific economic reasons.  Thanks for creating this post and causing the discussion!

Cody B

hey Nick! I agree, my buddy had someone give him a quote, 10k. I'm sure with a few quotes one could get it cheaper. Thanks for posting!

On my duplex, closing was 3500. I put away 10% for vacancy and economic losses from it. 480/yr per door for cap ex. Little less for repairs and maintenance. Lots of variable though. Any immediate capex, my home is 1930 so I put more away, tenant class can hint towards frequent maintenance requests or not. Quarterly inspections might save you money...