All Forum Posts by: Corey Griffo

Investment Info:

Large multi-family (5+ units) buy & hold investment in Lexington.

Purchase price: $650,000
Cash invested: $1

We picked up a very exciting new 24 unit property on the North Side of Lexington.

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

It is a property that we believe has nothing but upside!

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

We found this deal from a direct mail campaign that we directed towards multifamily owners in Lexington

How did you finance this deal?

We purchased this deal with 100% hard money. 8% interest while holding the property to help with initial cashflow figures, and then a catchup to 12% when the property is refinanced.

How did you add value to the deal?

This property was rented substantially under market. As leases turnover, they will be gradually increased and as units become vacant they will be cleaned up and rented at market rates

Lessons learned? Challenges?

On this property, we learned that pest control should be calculated into our cash flow estimates.

I personally really like this menu approach idea. However I believe it is the way you go about it that @Greg M. thinks will insult the tenant. If you want to keep the tenant in the property, which in my opinion is always a good idea while still increasing the rent towards market, the menu idea serves a duel purpose of both helping justify (in your tenants eyes) the increase that would have happened anyway without upgraded facilities while starting to modernize your units. I personally have several units that I am starting to use this method and so far it has worked well. I would try to stick to a approach where the increase would be across the board and if they agree they can choose from A, B, or C.

Thanks @Jerry Padilla! You said it way better than I could. 

From my experience, It is all based on initial intent. FHA, wants to see that you intend to live there for at least a year. The loan office will not be checking that your mailing address is the same after a year to verify, but if you went in to do another FHA loan 6 months later it may raise some red flags.

Hey @Michael Tucker! Happy to have you in the group! I'm more Central, KY in Lexington.

Hey Rob! 

Where did this stat come from? Do you have a link to an article or anything?

Hey @Sydney Key!

When you are running your analysis, are you looking at current or market rents? Only Duplex's, or larger units like Triplex's and Quads? Most deals in todays strong market, will require a little TLC, so Even if you are not extremely handy, Having the vision for what a property can become, can put you way ahead of the crowd. I have personally house hacked for the last several years, however none of the numbers would have worked had I not renovated my units to demand above market rent. 

I also support what @John Warren said! With low skin in the game, and a low out of pocket monthly cost it still pays to look at it from the perspective of having your unit fully rented once you move out and hold onto the property. Long story short, its the art of the first deal. And to be able to get into a multifamily property, with a owner occupant (30 Year, low interest) loan is an amazing opportunity. It doesn't have to be a home run, just something to get the ball rolling that will set you up for future success. 

Corey Griffo

The Grifford Team, RE/MAX Elite

Lexington, KY

@Ben Leybovich Great Job!! This looks like a awesome portfolio addition! A $300/door increase across 164 doors sounds like the deal of a century. Can’t wait to hear what you end up doing with it!

@Calvin Smith I heard it once said in a BP podcast, in the beginning go as big as you can comfortably. Obviously that can be interpreted many different ways, but in Essence it is all going to depend on your level of risk tolerance as well as your capacity to take on work. It took me several properties to get comfortable enough and have the capital to get into multifamily investing, but now that I’m here I wish I would have figured it out earlier. As I’m sure has been mentioned many times steady, partnership with a seasoned investor may be a great way for you to mitigate risk, get the exposure to multifamily, and still accomplish your goals. Good luck with whatever you decide to do, and congrats for making the decision to start in Real Estate!

Thats awesome Jevon! Quite the first investment property! I definitely would like to hear more about the progress updates as time goes on! If you ever find yourself in Lexington checking up on the property, give me a shout!

Investment Info:

Single-family residence fix & flip investment in Lexington.

Purchase price: $25,000

Contributors:
Dave Alford

A Current Fix and Flip in the NOLI District of Lexington, KY that we have on-going.